Chinese electric vehicle manufacturer, Li Auto, released its Q1 financial report on May 10th. The report revealed a revenue of 18.79 billion yuan ($2.71 billion) for the quarter, indicating an increase of 96.5% year-on-year and 6.4% compared to the previous quarter. Additionally, Li Auto‘s vehicle sales revenue in Q1 was 18.33 billion yuan, which represents a year-on-year increase of 96.9%.
Li Auto‘s revenue growth is primarily attributed to the increase in vehicle delivery volume and average selling price, which was driven by L-series models. In Q1, Li Auto delivered 52,600 vehicles – a YoY increase of 65.8% – thanks to the success of L-series models. The company aims to deliver between 76,000 and 81,000 units in Q2. Recent data indicates that Li Auto delivered 25,700 new cars in April alone; therefore, it is expected that monthly deliveries will remain above this level for May and June. During an earnings call, CEO Li Xiang stated that sales would gradually climb throughout Q2 with a target of achieving monthly deliveries of 30,000 units by June.
Li Auto achieved a net profit of 934 million yuan in the first quarter of 2023, compared to a net loss of 10.8666 million yuan during the same period last year. In the fourth quarter of last year, Li Auto‘s net profit was 265.3 million yuan. Notably, Li Auto is now the first electric vehicle manufacturer in China to achieve consecutive profits for two quarters.
However, Li Auto‘s vehicle gross profit margin declined year-on-year and quarter-on-quarter in the first quarter. The gross profit margin for the quarter was 19.8%, compared to 22.4% and 20.0% in the same period last year and the fourth quarter of last year, respectively. Li Auto attributed this decline mainly to differences in product mix between the two quarters.
In terms of research and development expenses, Li Auto invested 1.85 billion yuan in R&D during Q1, which is a YoY increase of 34.8%. However, it is lower than their investment of 2.07 billion yuan in Q4 last year.
The price of lithium carbonate, a raw material for batteries, has sharply declined since the beginning of this year. During a conference call, an analyst inquired whether Li Auto had any plans to reduce prices in response. In reply, Li Xiang stated that they have no current plans to lower prices as they had already established pricing decisions for each vehicle model based on its level during detailed long-term planning.
Li Auto plans to expand its product lineup by 2025, which will consist of one flagship model, five extended-range vehicles, and five pure electric models. According to Li Xiang, the company is set to release a new pure electric model in Q4 of this year. The vehicle will be available for immediate delivery upon its release.
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