LI AUTO is making a full-on push towards the big three.

The image shows Li Auto's Chairman, Li Xiang.

Author: Cao Anxun

Editor: Chai Xuchen

After achieving the outstanding performance of delivering 376,000 vehicles in 2023 and surpassing 50,000 monthly deliveries, Li Auto has solidified its position as one of the most successful new forces of the past year with its earnings report.

On February 26th, Li Auto released its 2023 earnings report. In 2023, Li Auto achieved its annual revenue target, reaching a revenue of 123.85 billion yuan, a year-on-year increase of 173.5%. This makes Li Auto the first new force in China to exceed one trillion yuan in annual revenue. The net profit reached 11.81 billion yuan, marking Li Auto's first full-year profit since deliveries began.

This achievement has made Li Auto the third new energy vehicle company in the world, following Tesla and BYD, to achieve profitability at the fastest pace globally.

Chairman Li Xiang stated that 2023 marked the best financial performance in history. As a result, as of 10:00 AM Eastern Time on February 26th, Li Auto's stock price rose by approximately 15%.

In the fourth quarter, Li Auto set new quarterly records for delivery volume, revenue, profit, and cash flow, providing strong support for the annual performance.

According to the financial report, in the fourth quarter, Li Auto achieved a delivery volume of 131,805 vehicles, a year-on-year increase of 184.6%; revenue of 41.73 billion yuan, a year-on-year increase of 136.4%; a net profit of 5.75 billion yuan, and a record high free cash flow of 14.64 billion yuan.

By the end of 2023, Li Auto had a cash reserve of 103.67 billion yuan, while many new forces were facing production halts, delayed wages, or financial pressures.

Li Auto's strong cash flow supports increased investment in research and development.

In the fourth quarter, Li Auto's R&D expenses were 3.49 billion yuan, a year-on-year increase of 68.6%. The total R&D expenses for 2023 reached 10.59 billion yuan, a historical high, with a year-on-year increase of 56.1%.

While most new forces are still struggling for survival, Li Auto has emerged victorious. However, Li Auto must remain vigilant as it faces escalating price wars and intense competition from companies like Aito.

To address this, Li Auto has unveiled its most comprehensive annual product plan in company history.

During the 2023 earnings report meeting, Li Xiang announced that 2024 will be an unprecedented year for Li Auto in terms of product launches.

Specifically, in March, Li Auto will launch the family tech flagship MPV - Li Auto MEGA, along with the 2024 models of Li Auto L7, L8, and L9. In the second quarter, Li Auto will release Li Auto L6. In the second half of the year, Li Auto will introduce three new pure electric SUV models. By the end of the year, Li Auto's product line will include 4 extended-range and 4 high-voltage pure electric vehicles, totaling 8 models, fully meeting the diverse needs of family users.

With the intensive launch of new models, Li Auto will face unprecedented delivery challenges.

Chief Engineer Ma Donghui stated that the factory's production capacity planning, worker recruitment and training have been completed ahead of schedule. They have also ensured the supply chain and conducted risk analysis, confident in ensuring the stability and timeliness of production and delivery.

In 2024, Li Auto aims to deliver 800,000 vehicles, achieving the goal of becoming the top-selling luxury car brand in the Chinese market. In the first quarter, delivery is expected to reach 100,000-103,000 vehicles, with March deliveries surpassing 50,000 vehicles.

Furthermore, Li Xiang mentioned a significant increase in research and development investment to enhance capabilities in areas such as intelligent driving and smart space, thereby improving market competitiveness.

For example, in the second quarter of this year, Li Auto will achieve nationwide coverage of imageless intelligent driving, expanding beyond city limits, and will upgrade all AD Max vehicles through OTA.

This signals that for Li Xiang, surpassing a hundred billion in revenue may just be the beginning. He is already planning how to achieve trillion-dollar revenue, even competing with global tech giants.

Li Xiang predicts that by 2030, capturing one-third of the Chinese household market above 200,000 RMB will generate over a trillion in revenue for Li Auto. With good performance overseas, by 2030, Li Auto could achieve revenue close to that of the global iPhone market solely in the household market above 200,000 RMB.

In Li Xiang's view, this niche market is a huge gold mine. Li Auto has only tapped into a small part of this gold mine, so there is no need to diversify efforts. Therefore, Li Auto will adhere to the high-end product line and will not produce models below 200,000 RMB in the next five years.

This also indicates that as a leader in high-end new energy vehicle companies, Li Auto will continue to compete in the high-end new energy vehicle market.

Li Xiang believes that competition in smart electric vehicles will concentrate on the top players. By the fourth quarter of 2024, the top three companies in the new energy vehicle market above 200,000 RMB will secure nearly 70% market share.

After surviving the "life or death" line of scale and profitability, Li Xiang hopes to live longer and share in the scale feast belonging to the top three giants in the new energy wave. 2024 will be a crucial battle, and Li Xiang is ready for it.