LI AUTO-W (02015) Q4 2025 Earnings Call Transcript

Hello, ladies and gentlemen. Thank you for standing by for Lee Auto's fourth quarter and full year 2025 earnings conference call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Janet Zhang, Investor Relations Director of Lee Auto. Please go ahead, Janet.

Thank you, operator. Good evening and good morning, everyone. Welcome to Lee Auto's fourth quarter and full year 2025 earnings conference call. The company's financial and operating results were published in a press release earlier today and were posted on the company's IR website. On today's call, we will have our chairman and CEO, Mr. Xiang Li, and our CFO, Mr. Johnny Tie Li, to begin with prepared remarks. Our president, Mr. Donghui Ma, and our CTO, Mr. Yan Xie, will join for the Q&A discussion. Before I continue, please be reminded that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in certain company failings with the U.S. securities and Exchange Commission, and the Stock Exchange of Hong Kong Limited. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that Li Auto's earnings press release in this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to Li Auto's disclosure documents on the IR section of our website. which contain a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures. Our CEO will start his remarks in Chinese. There will be English translation after he finishes all his remarks. With that, I will now turn the call over to our CEO, Mr. Xiangli. Please go ahead.

Hello, my name is Li Zhang. Welcome to today's business conference. In the past few years, it is a very important strategy. 随着公司规模的扩大,我们也重新审视很多基础能力,其中一个非常核心的就是销售。 我们过去最大的问题是在用经销商的管理方式来管理一个职用的体系,而职用体系最应该做的是应该以边面为核心进行运营管理。 没有经销商帮我们管理店面 而这应该变成我们自己的责任 自去年三季度以来 我们一直在探索如何更高质量的开店 如何管理好店面和激励好店长 如何对团队进行有效的赋能和培训 这一切的出发点都归结为一个核心 命题 怎么用直营的体系把车卖好 为此我们以结构为导向 以销量和人均产出为衡量标准 进行了一系列有效的改变 首先是分工的优化以人员的集中 我们通过门店派换解决选址不好的问题 将分散在人流下滑的二线商超的销售力量集中到更有潜力的市场 包含一线商圈和汽车的中心链 This is the product of the company's sales and sales. At the same time, we also have a successful development of the company's sales. We also have a successful development of the company's sales. In the meantime, we launched the company's sales team. The company's sales team became the main business. The company's sales team has a real business and share share. From the traditional sales team, it became the real business business. 今天汽车销售体系普遍不赚钱的大环境下 我们希望培养出来每年大量的收入超过百万的店长 让优秀店长的收入达到行业的三倍 也从销售能力层面确保公司订单量和交付量稳定在高端车第一梯队 产品方面,今年二季度我们将正式发布理想R9系列,凭借全面升级的动力系统,智能驾驶和底盘技术,我们要与竞品拉开显著的体验差,重回旗舰SUV的领先地位。 理想R9将标配800V和5C超充技术 同时搭载我们新一代全弹自然的增程3.0系统 实现更高的发电效率和更大的发电量 凭借NHU化和我们首创的EPR低温启动技术 理想R9可以提供V美纯电车的静静性与价值体验 以及更好的冬季能耗表现 我们还将全球首发的AI智能机油保养系统 实现三年或三万公里的超长保养周期 售价55.98万元的理想R9 Lewis版本 则继承了我们对巨身智能旗舰SUV的深度思考 理想R9 Lewis将配备全球首个量产全线控底盘主 和800V的全主动悬架系统,提供顶级的舒适性和操控性以及悬架质感,转向制动与悬架讲应速度和安全性也大幅提升,为高级支架和聚身智能提供必要的执行基础。 另外值得一提的是理想R9 Lewis将搭载两颗车轨级5纳米理想自研的马赫100芯片 有效算力达到了索尔优的6倍 并通过数据流架构和自研制价的模型更好的适配 实现真正的自研模型和自研算力的软硬一体 理想R9的换代成功将直接决定了整个R系列的市场上线 如果说上一代理想R9的竞争力主要来自于精准的产品定义 那么新一代理想R9将在技术层面构建起核心竞争的壁垒 我们的纯电车型也在持续上量 首先通过与供应商的持续努力 理想R6的供应问题逐步得到解决 我们会继续提升产能 争取让大家的提车周期更短一步 以此同时我们一直看到随着车主使用里程的增加体验上的然后体验上的赏愧驱动了理想i8 NPS增长超过20% 在年初捷蓝路发布的新年汽车品牌健康度研究中理想i8的NPS也被居中发型SUV的榜首 单随这样的NPS的表现 然后三月份以来理想i8的订单 然后就要一月份有了三倍以上的增长 理想i6与理想i8共同务实了理想纯电产品的市场根基 共同夯实了理想纯电产品的市场根基 我们的目标是彻底解决之前的各类问题 让我们的纯电产品真正占了市场 此外 回顾去年理想i6在发布后面临的首销政策产能提升和购置税补贴政策退缩周期带来的多重挑战 让理想i6的毛利率承受压力 但也为今年毛利率的改善预留了足够的空间 2026年下半年 我们还将推出一款全新的纯电旗舰SUV理想i9 进一步丰富我们的纯电产品矩阵 满足多元用户的需求 2026年是理想汽车进化为巨身智能企业的关键一年 面对竞争加剧的新年汽车市场 我们将致力于拉高技术护车盒 繁城从智能电动车向巨身智能企业的跃迁 以确立下一个阶段的竞争优势 2025年公司研发投入达到113亿元 其中AI相关的投入占50% 我们将在2026年延续这一投入战略 继续航实聚身智能企业的核心能力 对理想起来而言 AI主要涉及两个方面 一个是创造AI 第二个是如何使用AI 创造AI就是为产品赋予真正的生命 使用AI是提升我们的工作效率 在创造AI方面 我们全面重构了研发组织 真正以寄生智能公司的方式运行 造产品就是在造人 在推理芯片 机座模型 软件本体 硬件本体方面 建设相应的组织能力和培养统建的人才 在产品层面 我们视汽车为具有生命力的智能体 而AI是赋予产品活力的关键 相信一座新一代的技术平台 大家将陆续看到我们的产品的变化 它们不再是传统汽车或者电动车的简单延伸 而是具有生命力主动性 并体现在我们日常的高频生活体验上 在效率层面 AI正在逆转公司规模夸大 带来的信息流转以角色效率的下滑 通过引入Agent的协同工作 我们的迭代与进化速度开始重现创业公司的高效移植 这一变化在今年的日常运营中已初步体现 可以说AI不仅带来了生产工具的革新 更催生了更具活力的组织形态 最后我想强调 Now translating for Mr. Li Zhang.

Thank you for joining our earnings call today. Over the past year, Lee Auto has been going through an important period of strategic adjustments. As we scaled, we've reassessed a number of core capabilities, especially how to sustain sales efficiency and organization vitality in a direct sales model. The problem that we've identified is that in the past, we have used a dealership mindset to manage our storefront. However, for a direct sales model, the key is really managing each storefront. And therefore, without dealers, we need to figure out how to manage these storefronts effectively on our own. Therefore, since the third quarter of last year, we've been focused on improving store rollout quality, strengthening day-to-day store operations, and upgrading incentives, training, and enablement for our teams. Ultimately, it comes down to one question. How do we sell well? With sales volume and productivity per salesperson as our key metrics, we've implemented a series of targeted changes. First, we optimized division of labor and consolidated our sales force. By closing and replacing underperforming locations, we addressed site selection issues and moved sales teams from lower traffic, second-tier malls to higher potential locations, such as prime Tier 1 shopping districts and flagship stores in major auto hubs. This has directly improved store productivity and sales per head. To further enhance our frontline sales, we also upgraded our operating mechanisms. In March, we launched our store partner program, making each store the basic operating unit. Top store managers now have real operating decision power and profit sharing, shifting from a pure management role to true store operators. At a time when profitability is challenging across the auto retail industry, we want to develop store managers who can earn over RMB 1 million per year and enable our top performers to make three times the industry average. Just as importantly, this strengthens our frontline capability and helps keep our orders and deliveries firmly in the top tier of the premium segment. Turning to products, we will officially launch the all-new L9 lineup in the second quarter. With comprehensive upgrades from powertrain, autonomous driving, to shaft technology, we aim to create a clear step change in user experience versus competing models and regain leadership in the flagship SUV segment. The new Li-L9 will come standard with 800-volt architecture and 5C ultra-fast charging. It would also feature our next-generation full-stack in-house developed range extender 3.0 system, delivering higher generation efficiency and greater output. With further MDH improvements and our proprietary EGR low-temperature start technology, the new Li-L9 offers a cabin quietness and drive-in experience comparable to best. along with improved winter energy consumption we will also debut the world's first AI powered engine oil maintenance system enabling long service intervals of up to three years or three 30,000 kilometers our top the line the L9 Divis prices R&B five hundred fifty nine thousand and eight hundred reflects our vision for a flagship SUV in a mirror of embodied AI. It will feature the world's first mass-produced fully drive-by-wire chassis along with an 800-volt fully active suspension system, delivering best-in-class comfort and handling. Response speed and safety performance across steering, braking, and suspension are also significantly enhanced, providing the execution foundation for autonomous driving and embodied AI. In addition, the L9, the L9 Livis will be powered by two in-house developed five nanometer M100 chips delivering six times the effective computing power of 4U. Together with our data flow architecture and an in-house intelligent driving stack, it enables end-to-end integration of our algorithms and computing platform. The success of the new L9 will directly determine the market potential of the entire L series. If the previous L9's competitiveness was driven primarily by smart product definition, the new generation L9 will build its core advantage through technology. Our BEP models are also continuing to ramp up. With sustained efforts alongside our suppliers, the supply constraints on the I6 have been gradually easing. We will keep increasing capacity to further shorten delivery lead times. Meanwhile, as owners put more miles on their vehicles, positive real-world experiences have driven the LEA-I8 NPS up by more than 20%. In the NEV Brent Health Study recently released by Land Roads, the LEA-I8 also ranked number one in NPS among all large SUVs. Improved experience and satisfaction are now translating into a recovery in order and sales. Since March, Lee I-8 orders have increased 33% versus the same period in February and 179% versus January. Together, the Lee I-6 and I-8 are strengthening the market foundation of our BEV portfolio. Our priority is to fully resolve the issues we encountered earlier to ensure our FEP offerings establish a solid foothold in the market. Looking back at that last year, the LEA-I6 faced multiple timing-related headwinds after launch, including initial sales policies, the production ramp, and the phase-out of purchase tax subsidies, which pressure grows margin. At the same time, these factors also set the stage for margin improvements this year. In the second half of 2026, we'll be launching the Lee i9, a new flagship BEV SUV, further expanding our BEV portfolio to meet a wider range of customer needs. 2026 will be a pivotal year in Lee Auto's evolution into an embodied AI company. As competition intensifies in the NEV market, we'll continue to strengthen our technology moat and complete our transformation from a smart EV company to an embodied AI company, positioning us for the next phase of the competition. In 2025, our R&D spending totaled R&B $11.3 billion, which approximately 50% was allocated to AI-related initiatives. We will maintain this investment strategy in 2026 as we continue to build the core capabilities required of an embodied AI company for Lee Auto AI has new two main dimensions creating AI and applying AI bring our products to people to life while improving efficiency across the organization on the create AI side we have rebuilt our R&D organization from the ground up to off to operate the way and embodied AI company should we're developing capabilities and attracting top talents across the interface chips foundation models software and hardware at the product level we see the vehicle as an intelligent agent with real vitality and AI is what brings that vitality to life building built on our next generation technology platform our products will evolve in ways you will see over time there will not be mere extensions of traditional cars or EVs instead they will be proactive and increasingly lifelike and how they to learn and improve, and that will be reflected in our high-frequency experiences in daily lives. From an efficiency standpoint, AI is helping reverse the slowdown in information flow and decision-making that can come with scale. By integrating AI and work alongside agents, we're regaining the speed and agility of a startup in our iteration and evolution, and we're already seeing early results in day-to-day operations this year. In other words, AI is not only reshaping our tools, it also is enabling a more dynamic, high-velocity organization. In closing, I want to emphasize that we will convert the capabilities and systems we built from the VL9 launch in 2022 to today's broader automotive and embodied AI technology stack into real user experience and measurable business value. this will serve as the cornerstone of our long-term competitive positioning for the next decade we look forward to your continued attention and welcoming you to experience our next generation of products with that we will turn it over the call to our CFO Johnny to walk you through our financial performance oh thank you Lisa hello everyone given time has changed my remarks today you'll be

limited to fourth quarter financial highlights. All figures will be quoted in RMB unless otherwise stated. For further details, including the corresponding U.S. dollar amounts and full year financial results, we encourage you to refer to our earnings price release. Total revenues in the fourth quarter were R&B 28.8 billion, down 35% year-over-year, and up 5.2% quarter-over-quarter. This included R&B 27.3 billion from vehicle sales, down 36.1% year-over-year, and up 5.4% quarter-over-quarter. The year-over-year decrease was mainly due to lower vehicle deliveries. The sequential increase was mainly due to the increase in vehicle delivery, partially offset by lower average selling price due to the different mix following the commencement of the I6 deliveries. Cost of sales in the fourth quarter was R&B 23.6 billion, down 33% year-over-year, and up 3.3% quarter-over-quarter. Gross profit in the fourth quarter was R&B 5.1 billion, down 42.8% year-over-year, and are 14.8 percent cost over quarter. Vehicle margin in the fourth quarter was 16.8 percent versus 19.7 percent in the same period last year and 15.5 percent in the prior quarter. The year-over-year decrease was mainly due to different product mix. The sequential increase was mainly due to the estimated LEED mega recall cost booked in the prior quarter, partially offset by lower average selling price due to different product mix following the commencement of the I-6 delivery. Gross margin in the fourth quarter was 17.8% versus 20.3% in the same period last year, and 16.3% in the prior quarter. Operating expenses in the fourth quarter were R&D 5.6 billion, 5.8% year-over-year, and down 1.3% quarter-over-quarter. R&D expenses in the fourth quarter were R&B 3 billing at 25.3% year-over-year and 1.4% quarter-over-quarter. The year-over-year increase was mainly due to the cost related to AI and other programs to support product portfolio expansion and technology advancements. SG&A expenses in the fourth quarter were R&B 2.6 billion, down 14% year-over-year, and the 4.4% cost-over-quarter. The year-over-year decrease was mainly due to decreased employee compensation. Loss from operations in the fourth quarter was R&B 442.6 million versus R&B 3.7 billion income from operations in the same period last year, and R&B 1.2 billion loss from operations in the prior quarter. Operating margin in the fourth quarter was negative 1.5% versus 8.4% in the same period last year, and negative 4.3% in the third quarter. Net income in the fourth quarter was R&B 20.2 million versus R&B 3.5 billion net income in the same period last year, and R&B 624.4 million net loss in the prior quarter. Diluted net earnings for ADF attributable to ordinary shareholders was R&B 1 cent in the fourth quarter, versus R&B 3.31 diluted net earnings in the same period last year, and R&B 0.62 diluted net loss in the prior quarter. Tending to our balance sheet and cash flow, our cash position remains solid with a year-end balance of R&B $101.2 billion. Net cash provided by operating activity in the fourth quarter was R&B $3.5 billion, versus R&B $8.7 billion provided in the same period last year, and R&B $7.4 billion used in the third quarter. Great cash flow was R&B 2.5 billion in the fourth quarter versus R&B 6.1 billion in the same period last year, and negative R&B 8.9 billion in the prior quarter. At the end of 2025, we had a total of 30,728 employees. And now for our business outlook, for the first quarter of 2026, the company expects the delivery to be between 85,000 and 90,000 vehicles, and the quarterly total revenue to be between R&B 20.4 billion and R&B 21.6 billion. This business outlook reflects the company's current and preliminary view on its business situation and market condition, which is subject to change. That concludes our prepared remarks. I will now turn the call over to the operator to start our Q&A session.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. For the benefit of all participants on today's call, please limit yourself to two questions. And if you have additional questions, you can re-enter the queue. If you are a Mandarin speaker, please ask your questions in Chinese first, then follow with English translation. Your first question comes from Tim Sao with Morgan Stanley. which is the GDU.

We also have seen some news in the 2nd, which is the GDU. It's a new project, and has been closed 100 different companies. I also have a question about the GDU. The GDU is the GDU. The GDU is the GDU. The GDU is the GDU. The GDU is the GDU. The GDU is the GDU. The GDU is the GDU. So my first question is about the channel. I think the management just mentioned that Liotto now plans to optimize the sales networks and reportedly close up to 100 stores. What are companies' plans and progress regarding channel optimization? Separately, could you elaborate a bit more about the store partner mechanism the CEO as mentioned, in addition to the incentive program to the store manager, any further implementation details you can share with us, and when should we expect it to show positive results?

That's my first question. 销量目标的低效门店进行正常的一个态患 主要是解决过去门店选址不佳 商圣流量下滑的问题是属于正常的经营优化 今年我们取到的核心思路是更看重的话质量而不是数量 今年我们还会新增门店 新增门店的话将会优先去选取的话头部的商场 优质的汽车城来提升品牌的影响力和优质的客流 然后在城市的布局上目前低线的城市已经相对的完善 那后续呢伴随我们纯电车型销量的提升 我们重点会加密高线的城市 那同时呢我们也是在不断去提升消负的体验 包含门店的接待 试驾和这个消负的体验 以及在节假日高速的超充专员职守 用户的满意度和好评在持续的提升 另外借此机会我也想介绍一下公司在三月初正式推出的门店合伙的机制 核心的话是我们将门店作为基本的经营单元 去希望走出一条具有理想特色的汽车直营的模式 首先我们肯定会坚持指引 指引的话来保证服务体验以及全国的价格政策是统一的 同时通过下放经营的决策权和利润的分享权到店长来激发团队的经营意识和活力 经营决策权包含获客的自主权 经营的自主权和团队的管理自主权 从以往对店长的单一考核销量变成店长真正要对于本店的经营结果负责 是希望店长把店当成自己的事业的话来做 那我们也是希望这套机制能从根源上去解决过去盲目开店 扩门店外展等问题 并且未来的话新店选址 会由店长全程参与的话评估 全折法定道人 从源头去提升门店的金融质量 而公司也会通过财务的支持和数字化工具全力去赋能一线 我们是希望力争在Q3能够看到明显的销售金融的改善和提升 最后我们始终认为销服体系的健康和效率是保证销量的和市场地位的核心

I need to first start with a clarification on channel optimization. The rumor about closing 100 stores is false. In reality, we've always conducted routine optimization of our stores, facing out a small number of underperforming stores that cannot reach their sales targets. And this is simply part of normal operations to address past issues like poor store locations or declining foot traffic in certain shopping districts. Our core channel strategy this year is very clear, quality over quantity. we will add new stores this year new stores will prioritize top tier shopping malls and premium auto parks to strengthen brand presence and attract higher quality traffic as our city coverage our footprint and lower city tier cities is already fairly complete complete and going forward we'll focus on increasing store density and higher tier cities aligned with our ramp up of sales meanwhile we continue to improve sales and services experience service experience covering in-store reception test drives delivery highway super charging stations staff with attendance during holidays as a result we've been seeing user satisfaction and positive feedback keep climbing well we're on the topic let me also share a bit about our new store partner program officially launched on March 1st. We're treating each store as a core business unit and building a direct sales model that's truly unique to Leo. First, we remain fully committed to direct sales. This ensures consistent service quality and a unified national pricing strategy. Meanwhile, we're now delegating decision-making power and sharing profits with store managers to really motivate our front-line teams and enable them to think like real business operators. In terms of store operations, store managers now have autonomy in three areas, customer acquisition, day-to-day operations, and managing their own teams. And we've changed how we evaluate them as well, no longer just on sales volume. Now the performance is measured on operating results of the stores. The goal is to make every store manager feel like they're running their own businesses and be fully accountable for the results. This new model also helps us solve past problems at the root. like opening stores without thinking through and other issues on store expansion. Going forward, store managers will be involved from day-to-day site selection with clear ownership and accountability. This way, we raise store quality right from the start, and the company will back it up with financial support and digital tools to empower our frontline team. We aim to see significant sales and operational improvements from Q3. ultimately we believe a healthy efficient sales and service system is the foundation of strong sales and market leadership since last August we've spent seven months to systematically recalibrate our direct sales management framework this includes high quality store expansion refined operations and store manager incentives as well as frontline training all is to build a truly sustainable competitive sales and service network for the long run thank you My second question is about the product, the new product for the upcoming OU-L9 and the L-9 levels.

Could you please shed light on the launch timeline, pricing strategy, product competitiveness, and the crowded ways in the repo profitability?

Thank you. 大脑 还有本体三个维度 然后进行了整个技术的重构 我觉得第一重要的其实先讲的是本质 那无论是这个智能驾驶 还是今天的俱身智能 那本质上一个最大的挑战 相当于其实我们在通过看视频 然后来学习 然后来进行训练的学习 然后以及通过看视频 然后来进行其实对车辆的控制 那本质上 然后这个已经大家都在用的一个技术体系 其实并不真正的理解物理的世界 而是通过一种模仿学习的这个方式 那在感知方面 然后我们将突破 然后今天的摄像头 2D摄像头和激光雷达的方案 对 然后升级到3D VIT 然后真正的像人一样的 然后去感知和理解这个理解物理世界 而不是只是通过看视频的方式 我觉得这是一个重要的突破 这就要求我们从视频编码器到整个模型的研发 以及为编码器和模型提供强耳力的计算 也就是芯片层面 然后联合进行设计进行突破 我觉得这个将是无论是自动驾驶还是居身智能 我认为今年会发生一次全球范围的最大的重要突破 that's the truth and I think this is the real way which will turn into real way and line the space is not just a complete but there's nothing the line is just like human to feel like this and think of it and this is a really important change and then the power of the that is the big change and the whole body will have a big change. In R9, we have a complete system of the system. It includes the system of the system, the system of the engine, the system of the engine, and the system of the engine, and the four-way power-downloads of the engine. This is the safety of the car, and the safety of the car is far from the traditional cars. And also, there is also a very important thing, which is not to use the traditional MCU, but to the other control machine MCU to control it, and it can be used by the model, and to the control machine, and to the output. I think that this kind of a system is the future of the whole vehicle and the new technology. We will all be able to display the new design on the release of R9.

So first, to your question about products, this year in Q2 we will be launching our all-new Li-L9 Livis equipped with our in-house developed Mach 100 chips. And the reason we call it an embodied AI robot is really because we've completely revamped to the technical stack from a sensing brain and body from all these three dimensions. So first of all let me start with the autonomous driving In the past the technical paradigm is really to drive, to have the machines to learn to drive through watching videos. They're not really understanding the physical world but rather they're just watching videos and trying to to imitate human behavior from these videos. However, as we've conducted our R&D, we've identified that the most efficient way is really to understand the physical world. So when we say VLA model, we're really trying to use the language to understand and behave, and understand how the world works as opposed to just simply interpreting the video. So as we move from two-dimensional cameras to three-dimensional vision transformers, we can really understand the 3D world much better. And that requires a revamp of the full stack from video encoder to the chips to the algorithms. How we can enable compute directly from a large model to actually enable physical behavior. And I believe this will be a major technological shift across the world, across autonomous driving as well as physical robots, happening this year. So as I mentioned earlier, this is going to be real VLA. The language models really understand and thinks about the physical world before it makes the decision to move. So that's on the sensing side, perception side. And then next on the hardware itself on the execution side, VL9 as we released earlier will be equipped with a fully drive-by-wire system which includes drive-by-wire steering, four-wheel steering, electrical mechanical brake, 800 volt fully independent active suspension where we have pumps powering each suspension, each wheel independently, what that all combined will do is that it will provide us with the level of agility that's never achieved before in a vehicle. And beyond that, all the signals and the decision making doesn't happen through an MCU, which was the paradigm before, but rather we have large models to directly process these inputs and the outputs goes directly to the actuators as opposed to going through a much less sophisticated MCU. So that's what we believe is the real smart car is going to be like, and we believe that L9 is going to be the beginning of all this. Thank you.

Your next question comes from Paul Vong with UBS.

My first question is about the goal of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year. 对我们二六年的销量目标是怎么制定的 更加重要的是就是说我们怎么看待这个目标 在量和力的一个平衡之上 我们把这个销量的目标看得多么的重要 So my first question is regarding the 2026 sales volume target based on the current environment And the more importantly is how shall we balance the volume and market share target versus our own margins how important the volume target is in our overall balance of the development. 而今年大盘的增量比较有限 所以综合这两个因素 我们对今年的目标

是实现相比去年20%以上的同比增长 要想实现这样的一个增长 我觉得我们是一个三加二的策略 我觉得第一个是一定要把销售体系管理好 我们坚信直营体系 有效的管理将会成成我们长期的重要竞争力 so this is the thing the second is the L9 the L9 the success and then how to how to the third is the and then 都要做好的 我觉得第三个重点是我们的纯电 然后要稳定的上量 无论是i6 i8 还是mega 还有在下半年推出的E3 i9 我们希望我们的纯电的销量 彻底解决了 供应的问题 还有 过去的时候遇到的各种的发布的问题 以后 能够让我们的纯电在中方端市场 然后稳稳的赞助 我觉得这是我们讲的三个 然后核心的策略 我觉得加二的一方面 其实是我们过去几年 在这个智能化的投资 包含芯片模型 然后以及各种的研究方面的能力 我觉得会在近年 会体验出来完全不同的产品体验 而且最重要的 这个产品体验是priority的 然后是主动的 然后是高频的 也是用户每天无事不合同能收到的 I think this is the second time of the world. And there is another one that's in the States, which is also in the US. And it will be a very clear time for a lot of presidents to come and開拓. This is the fact that we have been in the US in the US but I think this is the event of our long-term agenda. We can leverage our our credit from this program in the US.

The Q&A will need to know, So 2026, as you all know, is going to be an important year from a product perspective as we release the third generation of products. While we're very confident about our products, we also noticed that this is going to be the most competitive year to date. this year you will be seeing more cars released more new cars released in the 200,000 RMD and above market than all of the years previously combined but at the same time the overall growth of the market is very limited so considering all this our goal our total goal is still to reach a 20% year-on-year growth for all 2026 and to support all of this we have a three plus two strategy first starting on the three the three pillars to support our sales the first one is the sales system we will continue to be committed to our direct sales model and as we've implemented new mechanisms we will start to see benefits this year of the direct sales model. And the second pillar is the L-Series launch, starting with the L-9. This new generation of L-Series will really be a key pillar to our sales this year. So we will make sure that we get every detail right from the product release to product, to supply, delivery, to sustain, to ensure the success of L-9 and upcoming L-Series models. And the third pillar is BEV ramp-up, which includes I-6, I-8, I-9, and mega. In the past few months, we've addressed the supply constraints. We've also fixed issues around release, sales, and marketing. So this year, as the year goes on, we believe that the volume on our BEV products will be steadily ramping up, which is going to account for a very significant market in the premium market. Now moving on to the two. The first one is AI-related investments. In the past year, we've spent billions on chips, on models, and this is going to be the year, I believe, that all these investments start to bear fruits, meaning that they will provide a very differentiating product experience to our users. And to summarize, these experiences will be proactive, will be high frequencies that every consumer can feel and benefit from in their everyday life. The second of the two is our overseas strategy. This is going to be the first full year where we officially run our overseas markets, But through the years of accumulation before, and we believe that this year is going to start to see results and support a long-term growth, and overseas remains what we see as a long-term growth opportunity.

Thank you. 其实有一些什么样的措施可以应对是通过供应链来消化还是会转载一部分到车架里面去。 So my second question is regarding the impact of raw material cost inflation, including the metals, memories, and batteries. What would be the strategy for the company to face this challenge? Shall we absorb it within the supply chain or shall we pass this part of the cost inflation to the downstream? 还是要强化和供应伙伴的一个协同 一方面是稳价格 另外一方面的话还是要保供应

然后在成本上的话 我们和相关的核心供应商都签了长期的LTA的协议 然后把关键的原材料啊 然后零部件的价格提前锁定 来对重的话短期的波动 然后在供应上 尤其是说最近存储之类的话智能化的话不仅比较紧张 我们也提前和核心供应商锁定了份额来保障新车的上市和生产 另外的话有合同有调价机制的我们会严格按照合同来执行 然后没有约定的我们也坚持和供应商共担成本一起来扛周期 实现的话 互利供应 这里呢也非常感谢 所有供应链 伙伴长期以来 对于理想其实的一个支持 那第二个的话呢 就是强化 这个端到端的降成本 包括从产品研发 制造物流 甚至质量 全量条的话 去挖降本的空间 然后同时通过平台化的研发 来提高零部件的复用率 把规模效应的话 take care with how much DE Specs can take care of CUTS andON-COND or DO billion and AMA they can help how much 去控制成本 那还有一点就是说 新车型定价 会更加的合理更加的稳健 那今年的新车型我们会 综合考虑原材料的波动 技术投入以及用户价值 然后保证 公司到他健康 可持续的盈利能力 让新品的毛利率回到健康

正常的水平 总体来说的话我们是有信心 通过雇用链的协同 we believe the current cost pressure is still largely concentrated on key components like batteries and memory chips which has indeed had some impact on unit vehicle costs in response we've already put in place the following measures first we are strengthening supply chain collaboration to stabilize pricing while securing supply on the cost side we've signed long-term agreements with our core suppliers to lock in both pricing and volumes from key raw materials upfront this helps us hedge against short-term market volatility and on the supply side especially for AI related components like memory chips we have been tightly we have been tight recently we're continuing to work with key suppliers and to secure dedicated allocation ensure priority support for production and new model launches where contracts include clear clear pricing terms and adjustment mechanism we strictly adhere to these terms and where there's no such agreement we work out of hand with suppliers to share the cost pressure and navigate the cycle together aiming for mutual benefits in the long term we We'd like to sincerely thank all of our supply chain partners for their ongoing support for And secondly, we're driving end-to-end cost optimization in the meantime. We're identifying cost-saving opportunities across the entire value chain from products to R&D, to manufacturing, logistics, and cost quality. At the same time, we're maximizing economies of scale through platform-based development and higher parts commonality across models. This allows us to absorb as much of the external cost pressure internally as possible. Our in-house developed and manufactured range extender, electric drive units, power modules, self-developed and contract manufactured, the main controllers, silicon carbide power chips and 100 autonomous driving chips and battery packs, all of this is helping us to better manage costs. Third, we're taking a more rational and steady approach to new vehicle pricing. For our 2026 models, pricing will reflect a balanced consideration of raw materials, volatility, R&D investments, and user value to ensure the healthy and sustainable profitability. Our goal is to bring gross margins of new products back to normal, to a healthy range. Overall, we're confident that by combining supply chain collaboration, long-term agreements that lock in key costs, platformization, proprietary technologies, and rational pricing, we can effectively contain the impact of raw material price increases with a manageable range and maintain stable growth margins and operational quality. Thank you.

Thank you very much.

Your next question comes from Jing Cheng with CICC. 好的,感谢介绍我的提问。 I think this is not a media report about a media reporter at Weibo. As a dual-world primary listing company, both in the U.S. and Hong Kong Stock Exchange, we recognize that share is one of the ways or tools we should consider for enhancing shareholder value. And with respect to Share Repurchase, currently we don't have additional information need to be disclosed. Thank you.

So my second question is about R&D expense. So what will be our guidance for the R&D expense in 2026? And also last year, we spent almost half of our R&D related to intelligence or AI-related areas. So what is the portion guidance for this year?

Okay. Thanks for our question. This is also Johnny. We expect the R&D expenses this year to remain around R&B 12 billion, with AI-related initiatives accounting for about half of the cost. This includes the investment in AI infrastructure, such as in-house chip development and computing power, as well as R&D for AI products like autonomous driving system and Li-Shang-Hong-Hue in the last several years. Just to clarify, we don't see the automotive and the AI as different as an independent business. We invest on the R&D side to build the AI capability and put it in our company as a whole business model. We monetize all the R&D investment through our current business model. It's not a separate business model.

Your next question comes from Fei Xingao with SciTix.

So my first question is about I-Series. So could you give us some details about IA and I6, other sales, and especially about the ramping up production of I6? And how do you evaluate thin water battery safety and its cost reduction contribution? Thank you.

In terms of experience and performance, we also have to continue to increase. Now, the NPS has over 20% increased. In the春节, the 5C超充 and the OTA8.3 The升级 is the highest level of use. The NPS has reached the highest level. In the year 2025, 上半年调研当中理想i8也是在中大型SUV当中NPS是排在第一 然后凭借良好的口碑i8的订单呢也在稳步的这个回升 那3月份订单相比1月份的同期提升了180% 市场的需求啊持续的向好 那关于理想i6的话我们已经跨过了最艰难的产能爬坡期 正式进入了稳定的交付阶段 IDO的产品力也得到了充分的验证 凭借外观造型 空间 能耗 还有操控能力 精准的满足了年轻家庭的需求 上市之后订单强劲 同时供应链的瓶颈已经彻底的解决 此前电池供应的短期波动带来挑战 通过我们和核心的供应商协同 提升了供应的产能 另外我们也及时推出 购置税补贴 以及延期的交付关怀政策 这里也特别感谢 理想i6用户的理解 和等待过程当中的坚爽 后续我们i6的月交付能力 会达到两万台水平 在手的订单 也会在未来一到两个月内 高效的交付 更重要的是i6的成功也证明了理想的品牌势能 不仅仅是正常产品 也成功延伸到群电的市场 然后关于电池的政策呢 我们始终是坚持开放合作的战略 与行业头部的合作广泛合作 但是呢我们要掌握主动权 从整车的性能需求出发 去主导电池的方案设计 然后层层去把关的话品质 就不管电磁是哪一家 它的性能质量安全 都必须要达到我们统一的理想标准 用户实际使用起来 体验完全一样 不会有任何的差别 那另外呢 也想说一下 2026年理想汽车所有的车型 都将搭载两种品牌的电池 一个是理想品牌 一个是那么多时代的品牌 这也意味着我们和核心伙伴的合作会进入更加深层次的融合阶段 那也请大家相信理想汽车本身这个品牌 因为理想的品质从来不是靠单一公共商决定的 而是由我们全战自然的技术 严苛的品控体系 还有长期坚持的价值观共同定义的 选择理想就选择了最可靠的保障 谢谢 now let me start with me I hate since its launch in July last year user

satisfaction has continued to rise as owners accumulate miles on their vehicles and they're satisfied particularly with driving charging experience and autonomous driving the MPS of I 8 has risen by over 20% compared to the early post-launch period during the Chinese New Year holiday our 5c ultra fast charging and OTA 8.3 autonomous driving upgrade received strong user acclaim, pushing NPS to an all-time high. In Land Road's second half of the 2025 survey, VI-8 ranked number one in NPS among all large SUVs. Filled by the strong word of mouth, VI-8 orders have steadily rebounded. Daily orders in early March were up threefold, over threefold, sorry, over nearly 180% versus January. This clearly upward trend reflects strengthening market demand. And now turning to Li-I6, we've successfully moved past the most challenging phase of production ramp up. We are now in the stable delivery phase. Li-I6 product strength has been thoroughly validated with its distinctive exterior design, spacious interior efficient energy consumption and agile handling it precisely meets the needs of young families it experienced strong order momentum since launch and at the same time all the supply chain bottlenecks have now been fully resolved we used to face short-term volatility and battery supply but we worked closely with our core suppliers to scale production capacity we also introduced a purchase tax subsidy and extended care policy I'd like to thank all of our LEA-L6 users for their understanding and patience. We expect LEA-L6 to sustain a steady monthly sales of around 20,000 units, and we're on track to efficiently deliver the current order backlog within the next one or two months. Most importantly, LEA-L6 success clearly shows that LEA Auto's brand appeal has successfully extended from the era segment into the best segment moving on to our battery strategy we will commit we are committed to an open partnership approach while working closely with industry leaders we retain control in all these partnerships when it comes to the vehicle performance we let battery architecture design and rigorously control quality at every step regardless of which partner supplies the cell all batteries must mean the autos unified lease standard for performance quality and safety to the user the experience is identical there are no differences whatsoever additionally starting in 2026 all the auto vehicles will be equipped with batteries from only two brands the auto brand and CATL this marks a deeper level of integration with our core partners. We ask for your continued trust in the Li Auto brand, because Li Auto's quality has never depended on any single supplier. It's defined by our full-stack in-house R&D, our rigorous quality control systems, and the core values we've upheld from day one. When people choose Li Auto, it means they're choosing the most reliable assurance. Thank you.

So my second question is about the in-house chip Mark 100. So could you give us more colors about this chip? such as mass production timelines, and where can we see the cost savings and efficiency is. In addition, how should we understand the company's software and hardware integration, and when we will see the gap between different automakers because of this integration.

Okay. This is the end. Let me answer your question. And M100 will deliver with L9, a new series, and we already started mass production. And for M100 itself, with the same silicon area, M100 delivers significantly higher effective compute, giving our VRA algorithms much more design space. For example, we can run a VRA model with about six times the parameters and 10 times the compute of the previous generation. are still achieving higher frame rates and faster inference. More importantly, as our in-house models, compiler stack, and the operating system evolve together through co-design, we are beginning to unlock the real potential of a full self-developed autonomous driving stack. The performance gains we see today are important, but the bigger impact is that this system level integration will significantly accelerate how fast our autonomous driving capabilities improve over time once the system is officially deployed we expect the pace of capability improvement to increase substantially m100 also works closely with halo os and vehicle by wire system enabling tighter coordination between autonomous driving compute cavitation pre and post processing and vehicle control this shortens the end-to-end latency from sensor photon input to vehicle actuation to around 200 and to 300 milliseconds directly improving the driving experience. The higher local compute also allows us to deliver more intelligent capabilities beyond autonomous driving. Over time the car will behave more and more like a robot. some of these capabilities will first appear on the new L9 and we will continue expand them in the future and and more M100 also brings significant cost advantage first the bottom cost per chip is much lower than external solutions and second we removed the XAU controller using the previous generation platform. By replacing it with M100 combined with the Halo OS virtualization, we save over 1,000 IMB per vehicle. Third, thanks to our data flow architecture and code design of model and chips, we achieve higher runtime efficiency today and maintain much greater header room for future performance improvement. When we started developing our own chip in 2022, We believe that around 2025, the industry would move into a new phase where models, ships, and operating systems have to be designed together. That kind of vertical integration creates real differentiation in performance efficiency and user experience. Over time, the gap between companies will start to look like the gap between Apple and Android in software more. Once you achieve full-stack hardware software integration, the advantage becomes structural, and it keeps widening. Thank you.

Your next question comes from Tina Ha with Goldman Sachs. 一个落地形态和节奏,包括比如说在汽车, 车车和连行机器人之间这些不同产品的一个战略优先级是怎么样的。 Thanks for taking my question. So my first question is regarding embodied AI. So for the next one to two years, wondering what's the strategic plan from Liato? What kind of products are we expect to see? And then also the progress or timeline of these products. Also, in terms of the strategic priority, how do you decide between EVs, RoboTaxi, as well as a humanoid robot?

This is the technology that we have to do with. It includes the I think this is what we will all agree with, and think this is the most important thing in the world. In the real business and product, we will be careful. We will be able to look at it. We will be able to look at it. We will be able to create a way to create a company. This includes AI眼鏡, And it includes our machine learning objectives. And we avoid making a big deal of big deal of companies. And we choose a real way to create such a product. So this is our strategy.

So in terms of the embodied AI strategy, first of all, on the technological and product front, we believe that there is a lot of commonality, regardless of what kind of product, physical product we're talking about. So this is an area we will be investing heavily in because we believe that all these investments will be shared across different product shapes and forms. This includes the device side inference chips, foundation models and operating system as well as the entire data training workflow. In the meantime, on the commercial side, we will be very careful as we invest and explore. We will be adopting a startup model in areas like AI glasses and robots.

Instead of using a traditional large company approach where we invest heavily in a verified direction, We will work more like a startup company to start these new initiatives and wait our way through. 好的,我第二个问题是想请问一下目前咱们对这个智能化研发的一个调整,工作是否已经结束,然后在这个新的分工之下,咱们支架的进展目前怎么样。 So my second question is regarding our R&D restructuring, so wondering if the restructuring has been completed, and also under the new structure, how is the progress regarding our autonomous driving?

I think in this year, we had a better adjustment. It was the development team. From the power of hardware and hardware and equipment, and from different functions, and become the creator of the people, and the creator of the people, and the creator of the people. For example, the body of the people, and it includes our brain cell, and the data knowledge, and the brain flow. and the brain flow. and our cognitive systems, We insbesondere our core systems. The second part is our system. We also include our system system and we link the information We can do those with our lbs on the internet and схемza. And we can do all the tools in the entire system. There are no real tools to work, just OPS can do all of these. We have an ability to use a hard-sh CAM system. It is the same as OpenAI and Astrobiters. We have our own system and Kubernetes. Because it has a hardware and hardware, we call it a hardware and hardware. It has to build a system and agent. It includes all of the software and software development, such as MCP, such as how to build an agent, and技術系统, and skills. It also includes our system and system. So we can really do the job and do the job. It's not just a simple conversation, or to give out some results on the paper. I think this is our platform platform. And our platform platform needs to be able to improve. Use good skills, use good記憶, and also be避免. Actually, in the past, many of the traditional companies at the same time, every one of the people of the people of the world all want to go to a phone call or call it a phone call, or call it a phone call, or call it a phone call, That's not what we need to do. And then, we have to prevent the body being able to get a little bit to get a little bit of the brain out of the brain. And then, we have to get a little bit of the brain out of the brain. I think this is the main part of the body. On the other hand, the hardware also happened a lot of change. It became a... It is to implement these systems in the future of a new system, and to make a complete design for the product. And a huge component of the energy INTC, and state NFC, and state NFC. These systems are not just per se at the same time, but we do this training mission. Through MCP, through MCP, and through MCP, 然后对所有的执行器进行控制这样的一个方式 对然后 这个然后从而我们能够让团队 然后真正的然后联合在一起 然后来打造 然后这个不同的 然后就是跟以往的传统的硬件两件 然后不同的 然后数字人归基龄的 这样的一个组织模式 和绵发模式上来 对我觉得这是我们今年 然后一月份做的很重要的一个建议 我们在做这个变化的时候 然后很多团队 最开始不太明白 但是我们实际能看到效率非常之高 然后我们的支架的模型的整个的训练的效率 然后会从过去的时候基本上两周到接待一次 现在基本上变成了一天接待一次 那我也另外一方面 然后团队之间的协作也完全不一样 然后过去然后还有部门强的各个团队 We went through a major organization change in January, where we've completely revamped our hardware and software functions.

All this has a shared goal, which is to build a silicon based digital human being or a smart human being that's our overall goal and in order to achieve this in reorganization we've basically reconnected across of our businesses and regrouped the functions by the specific part of the human that they were responsible for as opposed to previously dividing by the so-called business units or the product so this organization or the specialization happens in three areas the first one is what we think of as brain and this includes like data sets which is comparable to human lungs at the chips which is comparable to the the heart and operating system compared to the newer system and then all of these are organized together so that we can work through pre-training and post-training and infrastructure together and think of these as the brain and my rule for these teams is that they cannot touch applications because in many companies the fundamental research team are tempted to work on applications but in case the brains should not have their own hands but they should focus on building a very robust brain that can be used across different hardware and software applications and then on top to bring team we have will be called the applications team or in our language we call it the soft the core software team this course software team includes software tools like MCP there include teams that build agents, includes teams that focuses on skills, and teams that focus on memories, and all of these different components are designed to work with a shared operating system. That's how we can organize all these different components of software to actually do things for us as opposed to just become a conversational robot, so it can actually strategize and execute tasks that are given by human beings and then so everything I mentioned above is software which includes skills memories and again here we avoid the team set to the temptation to act to want to build their own brains we don't want the body to have its own little brain but rather we want them to fully utilize the powerful brain that was built by the previous team that I mentioned so this team focuses mostly on the body the applications and then finally we have a hardware team this is about building dedicated hardware for AI for embodied AI which includes an energy team and electric drive team and the controllers team and when I say controller teams we don't necessarily use actual controllers like the one seen in automobiles in the past because we've now we're now working with a model where we build MCPs for the different components so that the large model can directly talk to these MCPs and control these different components which is make which makes them a lot more intelligent and more efficient and when I put these three teams together the major benefit that I see is that they're able to work together across different products because they enable each other's work, as opposed to the silos that you see with the traditional models. And that's how we can deliver products that are also differentiated from the traditional products. So after we've made this reorg, many people at the beginning didn't understand or understand why we were making this change, but over time, very quickly, they're starting to see the efficiency gain in the workflow. For example, for the autonomous driving team, they used to iterate their models every two weeks, but after the change, they're now able to turn out an iteration every one day, which is a 14-time improvement. And again, as I mentioned earlier, this is partly thanks to the collaboration across different teams. They all sit in one room and work together as opposed to having different departments talk between silos. That's how we believe we can really build an embodied AI that we will see very soon.

And because of the fact that they've been working on a very important part of the company, and they've been working on a very important stage. So we can see that there are some of the key companies that have been created. It's also very good to receive the investment in the market. I think this is one of the key companies. 因为我们自己的这些核心的骨干,然后成为了然后受市场欢迎的创业者,对,然后我希望每一个然后能够出去然后能出去自己创业的,然后理想极致的骨干都能够表现的越来越好,然后成为市场的主力,对,市场竞争的主力,我觉得另外一方面,然后这个在公司内部也真正给了一些年轻的然后技术管理者,对,和然后这个业务管理者非常好的机会,所以无论是 机组模型 人心机器人 产品界 无论是 业务的一号位 还是下班的核心管理团队 这一波大量的出现了 90后 95后 胜任一号位的角色 也给整个团队 往未来的神剑去看 and it has a strong foundation and a strong foundation, and a strong foundation. I think this is a very good opportunity for the design of the design. This is a very good opportunity for a new generation. So I would like to talk to all my friends about this. Please be careful. We are the young young people who can be very good to join them on a year, and build a good foundation for the future, and to meet more of the challenges in the future. Especially the most important技術 and the most important skill. We can see that in our technology team, in the past 95 years, and in the past three years, There's one important thing that I want to add.

Around the beginning of this year, we've seen many important managers, especially in the R&D field. We've seen several major departures, many of them have been with the company for over five years, which is something I believe you've also noticed in the market. These leaders, in many cases, they're first in line of their business. They went through the entire zero to one cycle with V-Auto in a starter mode, and they've been very well received by the investment community and many of them have had major funding and we've seen on the news already so first of all I wanted to congratulate these former colleagues for getting good reception in the market not just funny but also overall reception and we I really wish all of you good luck in to compete in your respective markets and wish your business to develop well and for you to have a success in your new venture and at the same time I also want to point out that this change has really given rise to a very exciting change within the company it has enabled many of our young leaders across technology in business units and foundation models product vehicle product lines in embodied AI it has embodied new in able new leaders in these areas of many were born after 1990 or 1995 to really take the spot and take the burden and there's really we're starting to see a full bench of very talented and motivated colleagues which is prepping the companies really for the next decade I believe this overall is really a win-win situation for us and our employees and really ready us for the new decade of development so I want all of you investors and those who care about the company to rest assured that this young generation is taking over very well and they're building on the solid foundation that's built by their predecessors and have turned up yielded some really really good results especially in some key technical areas for including some of the thesis and key research problems our post 95 generation has made a major contribution and even some newly fresh graduates. Many of them were born after the year 2000. They made some major contributions to our products, to our technology, and are at the forefront of our research R&D. So this is a really exciting time. I'm really excited to see all this and also makes me very confident about the next decade that's to come. Thank you.

As we are reaching the end of our conference call now, I'd like to turn the call back over to the company for closing remarks. Ms. Shannon Tsang, please go ahead.

Thank you once again for joining us today. If you have further questions, please feel free to contact Liotto's Investor Relations team through the contact information provided on our IR website.

This concludes this conference call.

You may now disconnect your line.

Thank you.