Q2 2024 Li Auto Inc Earnings Call
Speaker Change: Hello ladies and gentlemen, thank you for standing by for Li Autos 2nd Quarter 2021 earnings conference call. At this time, all participants are in listen and remote. Today's conference call is being recorded.
Janet: I will now turn a call over to your host, Ms. Janet Zhang. Investor Relations Director of Li Auto, please go ahead, Janet.
Janet Zhang: Thank you, Kelly, good evening and good morning, everyone. Welcome to Li Auto, second-quartered 2000 and 24 earnings conference call. The company's financial and operating results will publish in a price release earlier today and it will host it on the company's IR website.
Speaker Change: On today's call, we will have our chairman and CEO Mr. Xiang Li and our staff home, Mr. Johnny Tilley, begin with prepared remarks.
Speaker Change: and Senior Vice President, Mr. James Dian Junzo, we'll join for the Candidate Discussion.
Speaker Change: Before I continue, please be reminded that today's speech session will contain forward-looking statements made and the deceased have a position of the U.S. private securities that the Education Reform Act of 1995. Forward-looking statements involve encouraging risks and entities.
Speaker Change: At such, the company's actual results may be materially different from the wheels expressed today.
Speaker Change: for the information regarding risks and uncertainties is included in certain couple of feelings with the U.S. Securities and Exchange Commission and the stock exchange of Hong Kong Limited.
Speaker Change: The company does not assume any obligation to update any forward-looking statements except as the required ender of like below.
Speaker Change: Please also note that Li Autos earnings press, press release, and this conference call include discussions of unordinated U.S. cap financial information, as well as unordinated non-gap financial matters.
Speaker Change: Please refer to Li out of this code document on the AR section of our website, which can tell a reconciliation of the unauthentated 9-gap measures to comparable U.S. GF measures.
Speaker Change: Hello, I'm Li Jiang. Welcome to the restaurant. Today, we will talk about it.
Speaker Change: Today, 7th of September, China's economic growth rate is about 50%
Speaker Change: Everyone, through this long-term task, the National Security Council, and the National Security Council, we will talk about the situation of the President and the President of the National Security Council. The President of the National Security Council is a very important part of the situation.
Speaker Change: arjiru j guan y ofpadgoian womantary jon hu cha herji su shaah yaah k hian eijo chanin kun jjook waschoa hugo su arbana toin hunah an jah uda
Speaker Change: Li, Qi Chou, at 20,000 yuan以上, Jing Nan Qi Chou,至 2,000 yuan,从 1kg to 13,6kg, Qi Chou to 20kg to 14.4kg. Li, Qi Chou, at 20kg, Qi Chou to 20kg, Qi Chou to 20kg, Qi Chou to 20kg.
Speaker Change: [inaudible]
Speaker Change: [inaudible] I've been working on a lot of business. I've been working on a lot of business. I've been working on a lot of business.
Speaker Change: Li, Xia'er, 9, and Zhang Zhiyun, who is the only one who can be used for his life.
Speaker Change: So, this year, 4th and 8th of June 2016, Sheng Chen and Jiaochu, Pa Ko Wenjian
Speaker Change: [inaudible]
Speaker Change: Xinqi, we have been working for a long time, and we have been working for a long time.
Speaker Change: 6月21日, Li Zhangqi Chen Lei Ji交付突破80,000 liang, Chen Lei,首各達成這一里程為的中國新設立品牌 7月,我們的交付量達到了5.1萬 liang,創下越交付量的歷史新高
Speaker Change: 8月21日, and I would like to introduce you to the news that the news is not only in the past, but also in the past.
Speaker Change: Zhang Zara, China, Hao Hua Chou, Xi Chou, Pingpai, Xin's Li Shi
Speaker Change: In this way, I want to thank you for your support and support and support.
Speaker Change: 22 years old, we've been talking about the number of people in our country in 371 years. From the point of view, 10.6% of the population, the number of people in the country is 9.5% of the population.
Speaker Change: Li Xiang'er Liu's Chang能達到穩定狀態,配合我們各本,配合我們各項降本燈小措施的實施,我們有信心,你想其他的經營業體,將來下班年進一步提升.
Speaker Change: Chang Min交付只是七點,失去通過 OTA的升級,我們不斷別在新功能提升星期
Speaker Change: and Yuhu Hong Kong.
Speaker Change: [inaudible] We can share the same energy and energy in the UK and the UK.
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Speaker Change: 7th, we want to discuss 24-year-old AD Max in Europe, which is the most important thing to do, not to be considered to be the main character of the U.S.
Speaker Change: Can't forget the history of Yu Xian Yanxi, and the real做到全國都能開,全國都好用
Speaker Change: Our Wu Tuowei said that the use of the Guangxiang River is the most powerful and powerful. The Wu Tuowei is also the type of person who is in a difficult situation. It is a difficult situation. It is a difficult situation. The OTP6 is a difficult situation. It is a difficult situation.
Speaker Change: Chu Jun Cheng is the first to be released in 2013.
Speaker Change: Gets目前, a long-term home use-home business trip, including 99% of the population. A long-term business trip has been passed, and it's a good job. The home use-home business trip and ADM-GD, will be in the future.
Speaker Change: I want to remember that it can be done, so it's easy to do it quickly.
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Speaker Change: Ping Jun Yonghu, Zhihuo, Chao Gua Lan, Xixi
Speaker Change: Chi Bai, our ancestors were born in the city of Chiang, the city of Chiang, and the city of Chiang, and the city of Chiang, and the city of Chiang.
Speaker Change: [inaudible]
Speaker Change: and the police. We are going to discuss the situation in the past. We will discuss the situation in the past.
Speaker Change: RG2.
Speaker Change: Tong Guo, Jiang Beibu, Zhang Chang, Dian, Zihuan Wei, Tao Gu Qi Chuan Cheng's, Zhong Xin Dian
Speaker Change: Ye, you're a 5th year.
Speaker Change: Yijing, Shengji, Jian Yong's Shang Tang電的方式,中心電的戰比,已經提升日, 31% 文變,展位數量還比提升,超過13%
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Speaker Change: Zuo Wei Cheng長劇動情的企業,你想其他將持續達到超越用戶需求的產品和服務
Speaker Change: Tong Shi, Xiang Hua Li, Xiang Jinghai,在 Xin Nanyuan和 Hoha Ji Tuo Shi場的影響力,我們被接受用戶價值,經濟打磨產品,預計在2025年上半年,發布全新的唇麵自由威車型,服務更多的家庭螢幕.
Speaker Change: Next, we will welcome you to the Taiwan National University of Taiwan.
Speaker Change: The NUV penetration rate in China in July was approaching 50% indicating higher adoption of electric vehicles versus ICU vehicles.
Speaker Change: As consumer increasingly favor leading brands with strong sales and substantial user-bases, we expect the Indian market to further concentrate around top brands.
Speaker Change: In a complex and rapidly changing environment, in the second quarter, we achieve strong sales performance by focusing on user value and operating efficiency.
Speaker Change: We delivered more than 108,000 vehicles in the second quarter representing an increase of 25,.5% year over year.
Speaker Change: In the R&B 200,000 entire TV market, our larger share grew from 13.6% in Q1 to 14.4% in Q2, ranking first and on domestic auto brand.
Speaker Change: Since June, we have remained the top-selling brand in the R&B 200,000-thier SUV market in China, across any of you, and I see you vehicles.
Speaker Change: In terms of performance by models, all the auto models remained leaders in their respective market segments.
Speaker Change: In Q2, BL7 and Li, I'll explain the top two spots in sales in the RMB 300,000 and over large SUV and EB market. Li, I'll now continue to be up top sales full-size SUV among users.
Li Jiang: Additionally, production and delivery for Li, I'll say for continued ramp-up sentence launch in April.
Li Jiang: Driven by its compelling comic features and precise market positioning, Li all six monthly sales deliveries, monthly deliveries have consistently exceeded 20,000 units since June.
Li Jiang: VL6 ranked second in sales in the RMB 200,000 and higher passenger vehicle market, including both NVB and ITB's code. Only short of Teblamol y.
Li Jiang: Li, we reach multiple delivery milestones. On June 21st, our two months of delivery exceeded 800,000 vehicles, making us the first emerging new energy auto brand in China to reach this milestone ever.
Li Jiang: in July. We set a new monthly delivery record of 51,000 units per month. On August 21st, our cumulative delivery surpassed 900,000 units. And I'm interested at achievement for Chinese for the premium auto brand.
Li Jiang: I would like to take this opportunity to express my gratefulness to each member of Li Auto and for their hard work and also my gratefulness to all of our users for their recognition and support.
Li Jiang: In the second quarter of 2024, we recorded total revenues of RMB 31.7 billion.
Li Jiang: 10.6% year over year, while maintaining a healthy growth margin of 19.5%.
Li Jiang: for confidence that our operating performance will improve further in the second half of this year, as Li also completes its production ramp up and cost reduction in efficiency improvement efforts come to fruition.
Speaker Change: The vehicle delivery is the only the beginning of a typical user journey. For frequent OTAs, we continually add new features and optimize our user experience, allowing the auto vehicles to grow with our users.
Speaker Change: In July, we released OTA 6.0 and OTA 6.1 to all mega and our series users.
Speaker Change: and introduce in major improvements across autonomous driving, smart space and smart electric drive features.
Speaker Change: I would like to highlight the substantial progress we made in the Thomas drive. In July, we rolled out our HD map list NOA 2 over 240,000 lead 80 max users.
Speaker Change: This version is no longer dependent on prior information and therefore can operate on almost all rural across all cities in China. Our H.D. map list N.L.A. is very well received which is also reflected in our accelerating order in tech.
Speaker Change: Center feature with intros, introduced to beta users in May.
Speaker Change: The production up in the L.A. test rise has nearly doubled.
Speaker Change: following the rollout of OTA-6.0, the daily user engagement rate of city annoying has nearly grown, has increased nearly date fold, and the average NLADMAT mileage per user have almost tripled.
Speaker Change: As of now, over 99% of users use our autonomous driving features regularly, with cumulative of anyway mileage, the passing 1.1 billion kilometers.
Speaker Change: Additionally, user satisfaction and 80 max take rate are both increasing steadily.
Speaker Change: and I'm going to introduce our Thomas Riding System, continue to iterate quickly. On our Thomas Riding Summer Launch event on July 5th, we introduce the industry's first dual system automatic autonomous driving solution.
Speaker Change: Intergrading an N-to-N model for EVE within Vision Language Model or BLM. We rolled out the new solution to approximately 1,000 data users by the end of July.
Speaker Change: The EDD and BLM models fought much stronger conflict resolution and reasoning capabilities to our time-and-striving system.
Speaker Change: The one model approach also facilitates rapid iteration.
Speaker Change: are early bird beta testing version, he iterates three to four times a week with an average daily user engagement rate up over 70%.
Speaker Change: Additionally, we developed in-house reconstructed and generated more models for training and validation purposes.
Speaker Change: This new dual system architecture has many benefits including more efficient inference, faster model iterations, and more human-like group planning and better overall user experience.
Speaker Change: To cope with our growing product portfolios and greater number of vehicles on, we continue to upgrade and expand our sales and servicing networks.
Speaker Change: In Q2, we upgraded existing shopping mall stores and replaced some lower performing ones with new sales centers located at major auto parks.
Speaker Change: The proportion of failed setters have increased to 31% with a total number of stolen displaced spots increasing by over 13% of the last quarter.
Speaker Change: As of July 31, 2024, we had 487 retail stores located across 146 cities, and while at the 4th and 11th service centers, and the author authorized Body and Paintchops, offering 222 cities in China.
Speaker Change: Look at our charging networks. As of August 27, we had 733 charging super charging stations in operation with 3,428 charging stops.
Speaker Change: Wang said on going build out of our own supercharging stations, we collaborated with a number of premium partners to launch the first batch of what we call lease election supercharging stations in July.
Speaker Change: We will continue to expand the coverage and increase the density of our supercarging network.
Speaker Change: This improves the charging experience of our users, allowing more families to choose Li products with no concerns.
Speaker Change: Look in the chat to the third quarter of 2024. We expect vehicle deliveries to be between 145,25,000 to 155,000 units.
Speaker Change: As a growth-driven company, we're committed to creating products and services that exceed our user's expectations while strengthening our brand and the new energy of premium card market.
Speaker Change: In the first half of 2025, we expect to launch our battery electric SUVs to serve a broader range of family users.
Speaker Change: with that, I will now turn it over to our CFL Johnny to walk you through our financial performance.
Johnny Tilley: Hello everyone, I will now welcome to some of our 20-24 second quarter financials.
Johnny Tilley: You took time since French. I will address financial highlights here and encourage you to refer to our earnings price release for further details.
Speaker Change: Total revenue in the second quarter will arm be 31.7 billion, or fall for a feeling U.S. dollar.
Speaker Change: Act 10.6% year over year and 20.3.6% cultural record. It included R&B 30.3 billion or 4.2 billion US dollars from vehicle sales.
Speaker Change: of 8.4% yearly year, 25% culture will call her.
Speaker Change: The year when you're in Chris was mainly actually called to the increase in vehicle delivery. Actually, outside, by the law, I'm really studying Chris.
Speaker Change: Manlei Diu to different products makes and pricing strategy changes.
Speaker Change: The sequential increase was mainly due to the increase in vehicles delivery.
Speaker Change: Hushley, Offsite, by the law of reciting rights as a result of different products.
Speaker Change: Cost of sales in the second quarter was Army 25.5 billion, all 3.5 billion US dollars.
Speaker Change: I'm 30.8% real year and 25.3% health care will call them.
Speaker Change: God's profit in the second quarter of the war of R&B, 6.2 billion, or 800.
Speaker Change: Ficti, meaning U.S. Donald.
Speaker Change: Dong Li, on 9% year or year, and up 15.9% cultural color.
Speaker Change: We're promoting in the second quarter of a while, 18.7% worth is 21% in the same period last year, and the 19.3% in the prior quarter.
Speaker Change: the year of the secret, what made you two
Speaker Change: Difference for that makes and pricing strategy change it.
Speaker Change: has a real off-site by a call to reduction.
Speaker Change: The sequential secret was mainly due to different product mix.
Speaker Change: Group marketing in the second quarter of war's 1995%.
Speaker Change: Worse is 21.8% in the same period last year, and 20.6% in the prior quarter.
Speaker Change: Operating exercises in the second quarter were RMB 5.7 billion, all.
Speaker Change: 785.6Mg.
Speaker Change: 23.9% yearly year, and down 2.7% cultural culture.
Speaker Change: R&D expenses in the second quarter were R&D 3 beating.
Speaker Change: or 416.6 million US dollars.
Speaker Change: 24.8% year or year and down 0.7% cultural culture.
Ingrid: The yellow year Ingrid was primarily due to Ingrid expanded.
Ingrid: to support the expanding product of follow-up and technology as well as increase employee conversation as a result of the growth in the number of staff on a year or year basis.
Unknown Executive: 24-Earnings Conference Call. At this time, all participants are in listen-only mode. Today's conference call is being recorded.
Speaker Change: The sequential decrease or the ceremony due to decrease and for accommodation.
Speaker Change: Office by increased expanded to support the expanding product for volumes and technologies.
Unknown Executive: I will now turn the call over to your host Ms. Jiong Zeng, investor relations director of Li Auto. Please go ahead, Jiong. Thank you, Kelly. Good evening and morning, everyone.
Speaker Change: FBNA expanses in the second quarter will be 2.8 billion or 300.
Jiong Zeng: Welcome to Li Auto's second quarter of 2024 earnings conference call. The company's financial and operating results were published in price release earlier today, and it was 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. Jiong, Tie Li, begin with prepared remarks. Our president, Mr. Donghui Ma, and senior vice president, Mr. Jiong Zeng, will join for the making statements made under the safe harbor provisions of the U.S, private securities, the Decation Reform Act of 1995.
Speaker Change: 87.4 meaning U.S. order.
Speaker Change: 21.9% year will year and down 5.5% call the rule culture.
Speaker Change: The year-long year in Korea was primarily due to the increased employee conversation.
Speaker Change: and the result of the growth in the number of stuff as well as...
Speaker Change: Inclusive rental on other experiences.
Speaker Change: Associated with the expansion of sales and everything network.
Speaker Change: The sequential sequence was only due to the sequence marked the end promotion activities.
Jiong Zeng: For the making statements involved in current risks and uncertainties. As such, the company's actual results may be materially different from the rules expressed today. Further information regarding risks and uncertainties is included in certain company's selling 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 price release and this conference call includes discussions of un-audited U.S, gap financial information as well as un-audited non-gap financial matters. Please refer to Li Auto's disclosure documents on the IR section of our website which contain a reconciliation of the un-audited non-gap measures to comparable U.S, gap matters.
Speaker Change: and Samjali Commandation or Coder or Coder Business.
Speaker Change: and income from operations in the second quarter was RB 160-8 million or 64.4 million US dollars. What is income from operations of RB 1.6 billion in the same period last year?
Speaker Change: and a lot from our creations of R&B 500, thank you.
Speaker Change: Wang, fall on 9 million in the prayer corner.
Speaker Change: are facing marketing in the second quarter months, one point five for that. Worth it.
Speaker Change: 5.7 in the same period last year, a negative 2.3 in the prior quarter.
Speaker Change: Nacking Ha, in a second-cauter walk, R&B, one-fun-one-bearing.
Speaker Change: of 151.5 million dollars.
Unknown Executive: Our CEO will start his remarks in Chinese. There will be English translation after he finishes all his remarks.
Zhang: Zhang 52.03% every year.
Zhang: and pop.
Xiang Li: With that, I will now turn the call over to our CEO, Mr. Xiang Li. Please go ahead. [inaudible][inaudible]000,000,000,000,000,000,000000,000,000000,000,000,000,000,000000,000,000[inaudible][inaudible] first season of the Jiong Shao. The Jiong Shao will be held at the first season of the Jiong Shao. Co. As consumer increasingly favor leading brands with strong sales and substantial user basis, we expect the NUV market to further concentrate around top brands. In a complex and rapidly changing environment, in the second quarter, we achieved strong sales performance by focusing on user value and operating efficiency.
Zhang: 86.2% cultural culture.
Speaker Change: that looked at net earnings per share for ADS. I should be able to honor the shareholder. What R&B 1.05 or 0.01.
Speaker Change: for U.S.R. in the second quarter.
Speaker Change: Workday Rmb 2.18 in the same period last year, and Rmb 0.56 in the prior quarter.
Speaker Change: and turning to our fellowship and Christ's law.
Speaker Change: Our tax position remains strong, and the student at R&B.
Speaker Change: 18-97.3 billion.
Speaker Change: 13.4 billion US dollars as of June 30, 24.
Speaker Change: Next, NetCash Youth in Operating
Speaker Change: Activity, in the second quarter, was R&B 429.4 million, or 59.1 million US dollars. What is net-type provided by operating activities of R&B?
Speaker Change: 11.1 feeling in the same period last year, and net-pass you in operating activities of R&B 3.3 feeling in the prayer-corder.
Speaker Change: 3 cash flow was negative 1.9 billion on negative.
Speaker Change: 224.9 million US dollars in the second quarter, worth its positive R&B.
Speaker Change: 9.3 billion in the same cherry last year and next year.
Speaker Change: R&B 5.1 dating in the prayer quarter.
Speaker Change: and now for a revision of look for the third quarter of 2024. The company expects the delivery to be between.
Speaker Change: 145,000 and 155.
Speaker Change: South of the vehicle, who is sending a year away over year, increase of 38% to 47.5%.
Speaker Change: The Company All-Think Pack, so-called her.
Speaker Change: Total ram news to be between
Speaker Change: RB.
Speaker Change: 39.4 billing and RMB 42.2 billing, or $5.4 billing US dollar, and 5.8 billing US dollar, representing a year-old year increase off.
Speaker Change: 13.7 to 21.6%.
Speaker Change: This business outlook reflects the company's current and its preliminary view on its business situation and market condition, which is subject to change.
Speaker Change: That concludes our prepared remarks. I will now tend to call over to the office or to start our Q&A session. Thank you.
Speaker Change: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced.
Speaker Change: If you wish to cancel your request, please press star too.
Speaker Change: If you're on a speaker phone, please pick up the headset to ask your question. For the benefit of all participants on today's call, please remember 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 and follow within list translation.
Speaker Change: Your first question comes from Tim Sal with Morgan Stanley.
Speaker Change: Hello, everyone. This is Tie Wang Wang. I'm Tie Wang, Tie Wang, Tie Wang. The first time I've been working in this country, because we've been working in the first place in the world for the first time in the past two years.
Speaker Change: [inaudible]
Speaker Change: and I want to tell you about the history of this country, which is a very important role in the international community.
Speaker Change: So, my first question is about the Tom Triding.
Speaker Change: I think the Li author is diving into the NGM, the Thomas Triaget Technology.
Speaker Change: and expanding the team aggressively.
Speaker Change: How would Li Auto-Evade in return and efficiency of such ambitious investment? What could be the more relevant metrics for investors to assess the result and the commercialization progress of Li Auto's anti-anotone-triving technology? That's my first question. Thank you.
Speaker Change: I'll be back with this question. Li, wait and see if we can find a way to find a way to find a way to find a way.
Speaker Change: and then we'll talk about how we're going to live. We'll be back soon.
Speaker Change: In the first place, we will be using it, which means that the price of the product is a market.
Speaker Change: and Li Cheng Shu, Zhang Di.
Speaker Change: [inaudible]
Speaker Change: [inaudible]
Speaker Change: [inaudible]
Speaker Change: is in 30,000-year-old carcass. The Beijing-Magast, Ding Danzhan, has already taken over 70% of the carcass. And from now on, we will be able to find a way to find a way out.
Speaker Change: from the beginning of the speech, the speech has already started to look at it. Because from this beginning of the speech, it is really possible that the public can do it at the same time.
Speaker Change: and I will continue to be a great leader of the world and the world.
Speaker Change: [inaudible]
Speaker Change: [inaudible]
Speaker Change: since the beginning are investment yield on.
Speaker Change: and how most driving has always been pretty high. And in terms of operating metrics, we'd like to focus on two key results. One is whether our user is willing to use it, and second is whether users will pay for it. So on the user front metrics include it.
Speaker Change: and the percentage of time use or percentage of mileage use. And since we launched HDMaplet in July, users usage rate has increasing steadily, as shown by both the daily active rate and the mileage curve that have both increased many fold.
Speaker Change: on the market front, the improvement in L.A. has first positive effects on the adoption rate since.
Speaker Change: for potential users who come to our stores, a percentage of users who take NLA on test drive has increased one in twice.
Speaker Change: and the percentage of NLA ADMAX take rate on every model has also increased, especially cars that are priced at about 300,000 RMB, the percentage of ADMAX take rate has already approached 70%.
Speaker Change: and we believe that...
Speaker Change: VLM and EV model marks the beginning of establishing entry barriers.
Speaker Change: in terms of R&D for autonomous driving. Because we believe that this generation is...
Speaker Change: Weel.
Speaker Change: Fei Hai, Howard, Tao and driving.
Speaker Change: and AI further relies on large amounts of data and computing power, so only companies with the ability to invest.
Xiang Li: We delivered more than 108,000 vehicles in the second quarter representing an increase of 25.5% year-over-year. In the R&B 200,000 and higher NUV market, our market share grew from 13.6% in Q1 to 14.4% in Q2, ranking first among domestic auto brands. Since June, we have remained the top selling brand in R&B 200,000 and higher SUV market in China across NUV and ICE vehicles. In terms of performance by model, all the auto models remained leaders in their respective market segments.
Speaker Change: in the state of training capability and also have large enough user or vehicle base are able to become bigger and bigger in autonomous driving. And this improvement in autonomous driving will then further increase sales overall and also.
Speaker Change: from 80 Max E-Foot Vehicles.
Speaker Change: and this further into return allows us to invest even more in autonomous driving. So this is a very positive snowball effect.
Speaker Change: Thank you.
Speaker Change: Wang, I'm going to make sure that you're going to be a good one. If you want to know more about this, please visit us.
Xiang Li: In Q2, the L7 and L8 claimed the top two spots in sales in the R&B 300,000 and over large SUV and NUV market. While LL9 continued to be up top sales, full-size SUV among users. Additionally, production and delivery for LL6 continued to ramp up since its launch in April. Driven by its compelling product features and precise market positioning, LL6 monthly sales deliveries have consistently exceeded 20,000 units since June. LL6 ranks second in sales in the R&B 200,000 and higher passenger vehicle market, including both NUVs and ICE vehicles.
Speaker Change: [inaudible]
Speaker Change: My second question that's about the competition.
Speaker Change: Good Management, Common Onion, Going Competition between the Avali and Bali.
Speaker Change: How do we expect to come path in love, scape to your mouth, and to sick and half? Both brains, like Li Auto and Hado's, kicks driving for the top spot, being family as we use my gift, with the best smart driving features. That's my second question. Thank you.
Li Jiang: Hello, I'm Li Jiang. I think Hong Wang is the most common opponent in the world. And now we don't have to look at the situation in the market.
Xiang Li: Only short of Tesla model Y. Recently, we reached multiple delivery milestones. On June 21, our cumulative delivery exceeded 800,000 vehicles, making us the first emerging new energy auto brand in China to reach this milestone ever. In July, we set a new monthly delivery record of 51,000 units per month. On August 21, our cumulative delivery surpassed 900,000 units and unprecedented achievements for Chinese premium auto brand.
Li Jiang: [inaudible]
Speaker Change: This is the second round of the two rounds, and then this is the first round of the game, so we have to be very important.
Speaker Change: So first of all, Hima is our biggest competitor in the market.
Speaker Change: and our deal with that we will continue to co-exist with him in the long term.
Xiang Li: I would like to take this opportunity to express my gratefulness to each member of Li Auto and for their hard work and also my gratefulness to all of our users for their recognition and support. In the second quarter of 2024, we recorded total revenues of R&B 31.7 billion, up 10.6% year-over-year while maintaining a healthy growth margin of 19.5%. We're confident that our operating performance will improve further in the second half of this year as LL6 completes its production ramp up and cost reduction and efficiency improvement efforts come to fruition.
Speaker Change: in a very healthy fashion. And our attitude has always been to continually learn from Huawei, especially it's our endysystem and methodologies in operation and management.
Speaker Change: and asked for us as a set of companies to have such a model to learn from is very critical.
Speaker Change: and I will thank you for your support.
Speaker Change: Your next question comes from Lin Wang with Deutsche Bank.
Lin Wang: I will give you two questions. The first question is, what is the difference between the two of us? What is the difference between the two of us?
Xiang Li: Vehicle delivery is the only the beginning of a typical user journey. For frequent OTAs, we continually add new features and optimize our user experience, allowing Li Auto vehicles to grow with our users. In July, we released OTA 6.0 and OTA 6.1 to all I will introduce major improvements across autonomous driving, smart space and smart electric drive features. I would like to highlight the substantial progress we made in autonomous driving. In July, we rolled out our HD map list NOA to over 240,000 lead 80 max users.
Lin Wang: [inaudible]
Speaker Change #101: The second question is about next year's new car, an electric vehicle. Looking ahead to next year, I would like to ask about the changes over the past six months. We have noticed some trends and it seems that there haven't been any significant changes in the exterior design. However, consumers have high expectations for our company to make significant improvements in ICV compared to MAGA. Could the management share their thoughts on whether there will be any changes in the exterior design of next year's electric vehicle?
Xiang Li: This version is no longer dependent on prior information and therefore can operate on almost all roads across all cities in China. Our HD map list NOA is very well received, which is also reflected in our accelerating order intake. Since this feature was introduced to beta users in Maine, the production proportion of NOA test drives has nearly doubled. Following the rollout of OTA 6.0, the daily user engagement rate of city NOA has increased nearly eightfold and the average NOA mileage per user has almost tripled.
Speaker Change #102: I've got two questions, number one is for the market guidance for this year. Did you maintain a four year 20% cost margin guidance? It's special for the third quarter. Thank you.
Speaker Change #103: and I think it's a massive version of the question, more than 30 percent, is that going to be increasing the put-on lift, mainly for the quarter, both margin, vehicle cost margin, back to 20 percent. That's the first question. The second question is, are you a EV product? This is where you have been postponed, vehicle by almost a half a year. Do you change the design, especially if you're in design? Because for now, first type feature, it's your like on the...
Speaker Change #104: and the National Church yet, most of the customer preferable to change a standard exact true differentiate from the make-up design, and can provide any comma or not. Thank you.
Xiang Li: As of now, over 99% of users use our autonomous driving features regularly, with cumulative NOA mileage surpassing 1.11 billion kilometers. Additionally, user satisfaction and 80 max take rate are both increasing steadily. Our autonomous driving system continued to iterate quickly. On our autonomous driving summer launch event on July 5, we introduced the industry's first dual system autonomous driving solution, integrating an end-to-end model for E2E with an vision language model or VLM. We rolled out the new solution to approximately 1,000 data users by the end of July.
Speaker Change #105: Episode 2
Speaker Change #105: Hello, I mean, as this is Johnny, I'll take the first question. I think last quarter we died, we're promoting as...
Speaker Change #106: are on 18th of the 10th actually apparently a beat in the world.
Xiang Li: The E2E and VLM model brought much stronger conflict resolution and reasoning capabilities to our system. It iterates three to four times as weekly, with an average daily user engagement rate of over 70%. Additionally, we developed in-house reconstructed and generated world models for training and validation purposes. This new dual system architecture has many benefits, including more efficient inference, faster model iterations, and more human-like root planning and better overall user experience.
Speaker Change #107: I think it's quite a 7% and this is a effort offer.
Speaker Change #108: and also the product made in the delivery, the final delivery. So, for the third quarter, we believe our vehicle marking will...
Speaker Change #108: Come back a little bit, round up.
Speaker Change #108: will be over 9% and the total cross-marking will be about 10% in the third project. Thank you.
Orita: Oh, Orita, Oh
Speaker Change #110: So I'm Guan Yi, Chen Jianjue, and Li Xiang Mai, and I've already made a video about the future of the U.S. The U.S. government has been released in the past 30 years. The U.S. government has been able to complete the U.S. government.
Speaker Change #110: [inaudible]
Speaker Change #111: So, this is the first time I have a question for you. One is the product of the product.
Xiang Li: To cope with our growing product portfolio and greater number of vehicle round, we continued to upgrade and expand our sales and servicing networks. In Q2, we upgraded existing shopping mall stores and replaced some lower performing ones with new sales centers located in major auto parts. The proportion of sales centers has increased to 31% with a total number of showroom display spots increasing by over 13% of the last quarter. As of July 31, 2024, we had 487 retail stores located across 146 cities, as well as 411 service centers and LE authorized body and paint shops operating 22220 cities in China.
Speaker Change #111: [inaudible]
Speaker Change #112: So, our team members are very happy. We hope that we can have a great time with our team members. We hope that we can have a great time with our team members.
Speaker Change #113: Li Mega has been a great validation of our capabilities in 100-volt high-voltage dry-trained. And also, our decay abilities in this area, including the dry-trained efficiency of our high-voltage platform. And also the end-to-end charging experience and capabilities.
Speaker Change #114: and as we make improvements in autonomous driving, we have also become a pure one player in autonomous driving and similarly, our competitors in smart cockpit or smart faith have also been very strong historically.
Xiang Li: Looking at our charging networks, as of August 27, we had 733 charging supercharging stations in operation, with 3,428 charging stations. Alongside the ongoing build-out of our own super charging stations, we collaborated with a number of premium partners to launch the first batch of what we call least election super charging stations in July. We will continue to expand the coverage and increase the density of our super charging network. This improves the charging experience for our users, allowing more families to choose Li Auto products with no concerns.
Speaker Change #114: So, for our...
Speaker Change #115: BF SUVs. We really only need to solve two important problems. The first one is overall styling of the product. And the second one is to make sure that we have all over 200,000 charting stations by the time we start deliveries of our down problems.
Speaker Change #115: So, overall, we're pretty confident in the competitiveness of our Patrick SUVs and our plan or our goal is to become a Tier 1 player in the premium bad market in two years time.
Xiang Li: Looking at the tab to the third quarter of 2024, we expect vehicle deliveries to be between 145,000 to 155,000 units. As a growth driven company, we are committed to creating products and services that exceed our user's expectations, while strengthening our brand and the new energy premium card market.
Speaker Change #115: No, we'll play to the...
Speaker Change #116: Thank you to the management for your time. I have two questions. The first question is, could you please share our competitive strategy for the second half of the year? Especially in the absence of new models, how do we maintain sales stability or even achieve some growth? The second question is regarding our corresponding guidance. At the beginning of the year, we actually lowered our sales guidance once, and now the lower end is around 560,000 units. However, at the beginning of the year, our capital expenditure guidance was still relatively high, approximately 15 billion RMB. So, I would like to ask, in the context of lowering the annual sales guidance, how are we managing this?
Xiang Li: In the first half of 2025, we expect to launch our battery electric SUVs to serve a broader range of family users.
Tie Li: With that, I will now turn it over to our CFL Johnny to walk you through our financial performance. Thank you, Lisa. Hello, everyone.
Tie Li: I will now look you through some of our 20-24 second quarter financials. Due to time constraints, I will address financial highlights here and encourage you to refer to our earnings price release for further details. Total revenues in the second quarter will be 31.7 billion or 4.4 billion US dollars. Up 10.6 percent year-to-year and contains 3.6 percent cultural recorders. This included R&B 30.3 billion or 4.2 billion US dollars from vehicle sales of 8.4 percent year-to-year and 25 percent cultural recorders.
Speaker Change #117: and I'm going to talk to you about what's going on in the past. So thanks management for taking my question. First question is regarding...
Speaker Change #117: or our competition strategy into the second half of the year, so especially given that we don't have any new model launches for the second half, how are we expecting to maintain or even improve our sales volume? The second question is since earlier this year, management has lowered overall volume guidance to a low end of 560,000 units for...
Tie Li: The year-to-year increase was mainly attributable to the increase in vehicle delivery. Partially off-site by the lower average selling price, mainly due to different product make and pricing strategy changes. The sequential increase was mainly due to the increase in vehicle delivery. Partially off-site by the lower average selling price as a result of different product make. Cost of sales in the second quarter was R&B 25.5 billion or 3.5 billion US dollars. Up 13.8 percent year-to-year and 25.3 percent cultural recorders.
Speaker Change #117: for year 2024. However, we also gave a quite...
Speaker Change #118: Hi, Kapak's guidance at around 15 billion RMB. I think in 1st quarter. So given the lowered volume guidance, how should we think about the pace of capacity expansion as well as new Kapak's guidance. Thank you.
Speaker Change #118: Hi, Tina, this is James, I will take you all first question.
Speaker Change #119: and new models are only one of the readers contributing to sales growth and from my point of view, efficient sales operations is another way to promote sales and that's what we are doing now.
Tie Li: Cost profit in the second quarter was R&B 6.2 billion or 8.6 billion US dollars. Down 0.9 percent year-to-year and up 16.9 percent cultural recorders. Vehicle marting in the second quarter was 18.7 percent worth is 21 percent in the same period last year and the 19.3 percent in the prior cost. The year-year decrease was mainly due to different product mix and pricing strategy changes, possibly off-site by cost reduction. The sequential decrease was mainly due to different product mix. Growth margin in the second quarter was 19.5%, versus 21.8% in the same cherry last year, and 20.6% in the prior quarter.
Speaker Change #120: and looking forward we will continue to optimize the deployment of a source while strengthening the author.
Speaker Change #121: have a very dear to get on my knees.
Speaker Change #121: This will be an open-the-door to hire the abilities of sales growths while enhancing the efficiency of sales operations.
Speaker Change #122: In addition, our representing increased the ability of the most driving, also for city-pated sales growth in particular, the sales of 80 max models.
Speaker Change #123: As the results show, our market share in the NB200,000 and higher AEB market increase to 14.4% in second quarter, 2024.
Speaker Change #123: Circing 16% in the first quarter.
Speaker Change #123: We end to grow our market share in this segment further to 16% in the last quarter this year.
Tie Li: Operating expenses in the second quarter were R&B 5.7 billion, or 700, 85.6 million US dollars, 23.9% year-to-year, and down 2.7% quarter-all quarter. R&B expenses in the second quarter were R&B 3 billion, or 416.6 million US dollars, 24.8% year-to-year, and down 0.7% quarter-all quarter. The year-to-year increase was primarily due to increased expenses to support the expanding product portfolio and technology, as well as increased employee compensation, as a result of growth in the number of tasks or a year-to-year basis.
Speaker Change #124: I think China is a Chinese, and I think it's a change as Chuck mentioned 16% market share on the ANEV market about 200,000 RMB in the previous film.
Speaker Change #124: a healthy, present review called March 8th in the second office this year. Yeah, we have very confident our...
Speaker Change #124: [inaudible]
Speaker Change #124: Over a half-milling delurid, a vehicle.
Speaker Change #125: and the fall of the Shax, we have optimized our tie-packs of paint and...
Speaker Change #126: In the beginning of this year, we estimate the check-act is about two billing U.S. dollars.
Speaker Change #126: Currently, we estimate the check-out will be 1.1, 2.2, being not your stars.
Tie Li: The sequential decrease was primarily due to decreased employee compensation, off-site by increased expenses to support the expanding product portfolio and technology. At CNA expenses in the second quarter were R&B 2.8 billion, or 387.4 million US dollars, 21.9% year-to-year, and down 5.5% quarter-all quarter. The year-to-year increase was primarily due to increased employee compensation, as a result of the growth in the number of tasks, as well as increased rental and other expenses associated with the expansion of sales and service network. The sequential decrease was mainly due to decreased marketing promotion activities, and employee compensation, or a quarter or a quarter basis.
Speaker Change #126: and for the...
Speaker Change #126: of Free Castlo, and of Fall.
Speaker Change #127: Chu and Li, the free cash law has been positive.
Speaker Change #127: and the business of the ultimate self, the tech-action investment and also the improvement of the opportunity. We are very confident.
Speaker Change #128: I'm respectful of you come back to a positive starting from just a call.
Speaker Change #128: Your next question comes from Zuyinbo with side tech security.
Speaker Change #129: Thank you to the management team. I have two questions. The first one is still about end-to-end autonomous driving. I would like to ask how we foresee the direction of future iterations of the end-to-end foundation and our progress. The second question is that the market is very concerned about the upcoming Tesla Rubber Taxi launch event. Do we have any judgments or expectations regarding the Rubber Taxi?
Tie Li: And income from operations in the second quarter was R&B 468 million, or 64.4 million US dollars, which is income from operations of R&B 1.6 billion in the same period last year, a loss from operations of R&B 584.9 million in the third quarter. Operating marketing in the second quarter was 1.5% which is 5.7 in the same period last year, a net tape. 2.3 in the prior quarter. Next income in the second quarter was R&B 1.1 billion of 151.5 million dollars.
Speaker Change #130: So what's our, we'll about our future plan all in this area and the second classroom is about rubber Texas. How we feed this trend. Thank you.
Speaker Change #131: I'm Ma Dong Hui, I'm going back to this question
Speaker Change #132: [inaudible] Thank you for watching!
Tie Li: Down 52.3% year-old year, and up 86.2% quarter-war quarter. Diluted net earnings per share for ADS actually goes to other shareholders was R&B 1.05 of 0.014 U.S, dollars in the second quarter. Worthed R&B 2.18 in the same period last year, and R&B 0.56 in the prior quarter.
Speaker Change #133: In the end, we have a few years of experience, and we can start from 100 to 200 years, and we can start from 200 to 200 to 300 times.
Speaker Change #133: [inaudible]
Speaker Change #134: The Chinese military is a little bit bigger than the Chinese military, but we have a lot of things to do, and we have a lot of things to do.
Tie Li: And turning to our financial and cash flow, our cash position remains strong and stood at R&B 18.97.3 billion of 13.4 billion U.S, dollars as of June 30, 2024. Net cash used in operating activities in the second quarter was R&B 429.4 million of 59.1 million U.S, dollars. 3 cash flow was negative 1.9 billion on negative 256.9 million U.S, dollars in the second quarter. Worthed positive R&B 9.6 billion in the same period last year, and net cash R&B 5.1 billion in the prior quarter.
Speaker Change #135: In this video, we will discuss about the development of the Chinese government, and the development of the Chinese government.
Jiang Li: Jiang Li's talk about the past and the past.
Speaker Change #137: We can get the experience of the military. The military is very good. You can also get the military in a safe way. Thank you for your attention.
Speaker Change #137: So, we thought that the Chinese government's research was a very good change. From the past, the government's development was a very good change. And in the history of the Chinese government, the Chinese government, Gao Zhirang's data and the government, the way he was developed, was developed.
Speaker Change #137: [inaudible]
Speaker Change #138: In this world, Wang Yuzhe and Chu Dongchue's history will take place. This is the time to discuss with the world.
Speaker Change #139: First of all, on end to end of the LM model, the iterations rate and performance that actually exceed their operations.
Speaker Change #140: since we began our founding early bird testing program in July. In less than a month, the model has gone through nine iterations on average, a new iteration every 34 days.
Speaker Change #140: The amount of data used for training has also increased from 1 million clicks at the beginning to 2.3 billion million clicks currently. And the model kiddoly has also been increasing along the way.
Tie Li: And now for our business outlook for the third quarter of 2024, the company expects the delivery to be between 145,000 and 155,000 vehicles, which is then in a year-over-year increase of 38% to 47.5%. The company also expects third quarter total revenues to be between R&B 39.4 billion and R&B 42.2 billion of 5.4 billion U.S, dollars and 5.8 billion U.S, dollars, representing a year-over-year increase of 13.7 to 21.6%. This business outlook reflects the company's current and the preliminary review on its business situation and market conditions.
Speaker Change #140: Many of our early broadcasting users have posted many videos off their end-to-end driving on social media to showcase the great performance on city roads.
Speaker Change #141: The rapid iteration of the model can't be possible without highly efficient and automated testing capabilities, and we rely on world model to build a simulation testing system.
Speaker Change #141: and this system.
Speaker Change #141: and using user feedback and using...
Speaker Change #141: Real World scenario reconstruction and generated technology. We have built a whole of the library of mistakes and testing scenarios for our models. To make sure that our models are most fully tested and trained.
Speaker Change #141: and this has been program that can...
Speaker Change #141: can rate the models in terms of safety comfort and many other dimensions.
Speaker Change #141: and we believe that there has been a fundamental change in the time-striving R&D. It has increased from feature iteration to model capability iteration. And the speed of all...
Unknown Executive: 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 one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speaker phone, please pick up the hand set to ask your question. 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 Q.
Speaker Change #141: Feet of the iteration is highly dependent on whether we have high quality and large amounts of high-quality data and large amounts of computing powers. And also what I mentioned earlier, which is the automated assimilation testing program.
Speaker Change #141: So, our end-to-end reveal our system. We're planning for this system. We're planning to launch a greater scale or approximately 10,000 user scale testing program starting in September.
Unknown Executive: If you are a Mandarin speaker, please ask your questions in Chinese first and follow with English translation.
Tim Hsiao: Your first question comes from Tim Shao with Morgan Stanley. Thank you for your question. So my first question is about the autonomous driving. I think the re-author is starting into the end of the autonomous driving technology and expanding the team aggressively. How do we evaluate the return and efficiency of such ambitious investment? What could be the more relevant metrics we invest in to assess the result and the commercialization progress of the autonomous driving technology? That's my first question. Thank you.
Speaker Change #142: and on your question regarding road attack fee, our view interestingly is...
Speaker Change #143: that as we reached level four autonomous driving, the demand for taxi, for right hailing and taxi will actually decrease. And other shoes that market will take more time for us to observe and see how it develops in the future.
Speaker Change #144: Episode 2
Speaker Change #144: Episode 2
Speaker Change #144: Your next question comes from Paul Gong with UBS.
Paul Gong: Thank you for my question, I have two questions. The first question is whether Guan Yu is a member of the three groups of the group, Xu, and Zhi Yan. Now, I can share some of your questions, so I have seen a reason.
Unknown Executive: [inaudible] Li Jiangqi-Chi-Chi-Chi-Chi-Chi-Chi[inaudible][inaudible] yield on how much driving has always been pretty high. And in terms of operating metrics, we'd like to focus on two key results. One is whether our user is willing to use it, and second is whether users will pay for it. So on the user front metrics include the percentage time use or percentage mileage use. And since we launched HDMapless NLA in July, users usage rate has been increasing steadily as shown by both the daily active rate and the mileage driven have also increased many fold.
Speaker Change #146: We are a Samsung team and we are in China, but the Outhouse Air Series are continuing to grow in terms of the sales volume.
Speaker Change #147: In the environment of the government stimulus, as well as a certain kind of pricing adjustment, upwards by the German premium brand, have you seen the competitive environment in the high-end market, has sequentially imposed recently?
Speaker Change #147: [inaudible]
Speaker Change #147: OK, this is James, have you take your question.
Speaker Change #148: and we...
Speaker Change #149: At the leave hour, written in all process, performance has been largely contributing to our...
Li Tie: Li, Tie Li is competitive at the one-teach from his product stress.
Li Tie: and our adaptability and ability to make a sweep to adjustment in responding to the market.
Li Tie: Apart from the traditional sales channels in the second quarter, we ramp up our investment in online marketing resources such as...
Li Tie: Douyin and the other Hongnan platform.
Speaker Change #151: the Chief in the lead can be taught as it brought out for us.
Speaker Change #151: Substantial Increasing Cell 3. Additionally, we are revolutionizing our cell system by giving more empowerment to regional level.
Speaker Change #151: and this system allows each region to adopt.
Speaker Change #151: Regional sales jet strategy in the flexible approach on the condition of the completion profit target given by the company.
Speaker Change #151: with a approach significantly in health as the sales potential to reach to each.
Speaker Change #151: Pro Regional.
Speaker Change #152: and Tuijie Li Jun.
Speaker Change #152: Last but not least, since June 2024, the annual penetration rate in the Army 200,000 and the market has reached over 50%.
Unknown Executive: On the market front, the improvements in NLA have a positive effect on adoption rate. Since for potential users who come to our stores, the percentage of users who take NLA on test drives has increased more than twice. And the percentage of NLA 80 max take rate on every model has also increased, especially cars priced about 300,000 R&D. The percentage of 80 max take rate has already approached 70%. And we believe the VLM and EDE model marks the beginning of establishing entry barriers in terms of R&D for autonomous driving.
Zhang: Zhang, which is a significant milestone. After this, I think the premium payment industry will continue to consolidate.
Speaker Change #153: and I believe the author will be one of the man that is featured, fisheries doing this process.
Speaker Change #153: [inaudible]
Speaker Change #154: Thank you. My second question is related to the current situation. First of all, I'm going to talk about the current situation. I've been talking about the past few years. We haven't talked about the current situation. There are some changes. We're going to talk about the current situation. We're going to talk about the current situation. We're going to talk about the current situation. So, my second question is regarding the preparation of the work for the BV model. The next year, given the half a year adjustment of the long-term time, we adopt more new technologies and make its technologies. And how much of the scale have you been preparing for the supply.
Unknown Executive: Because we believe that this generation is real AI-powered autonomous driving, and AI further relies on large amounts of data and computing power. So only companies with the ability to invest in the data and training capability and also have a large enough user or vehicle base are able to become bigger and bigger in autonomous driving. And this improvement in autonomous driving will then further increase sales overall and also the number of 80 max equipped vehicles. And this further in return allows us to receive more in autonomous driving. So this is a very positive snowball effect. Thank you.
Li, Qian: Li, Qian, in terms of the capacity.
Speaker Change #156: I am Ma Tu Wei, I am a large group of people. And we will be able to support Ma Tu Ba Bai's high school students in the country.
Speaker Change #157: and Mu Qiandou, Huai Yan Hua,方便的话,總體的進度正常.
Speaker Change #157: [inaudible]
Speaker Change #157: and then we will be preparing for the development of the Chinese Communist Party in China.
Speaker Change #158: Chen Jian Chen, Chen Jian Chen, Chen Jian Guiua, Long time no see.
Speaker Change #159: We are going to show you the traditional city of Mu Xiang Yi. And the traditional city of Mu Xiang Yi is in Anno, Toshitang, China.
Speaker Change #159: [inaudible]
Unknown Executive: My second question is about the competition.
Unknown Executive: Could the management comment on the ongoing competition between Liato and Oli? How do we expect the competitor less gap to evolve into second half? I spoke with brands like Liato and Idos, Kip Swagging for the top spot and family entities market with other very smart driving features.
Speaker Change #160: I'm not interested in taking out all of the products that I've been using for a long time.
Speaker Change #161: Our plan is still to launch multiple A-hundred volts, A-hundred volts, high voltage, pure electric vehicles next year, 2020-5.
Unknown Executive: That's my sixth question. Hi, I'm Li Jiang. I think we are the most often in the world. And we think that we will be healthy and successful in the future. So, first of all, Tim Hsiao is our biggest competitor in the market. And our viewers that we will continue to co-exist with Tim Hsiao in the long-term. In a very healthy fashion. And our attitude has always been to continually learn from Huawei, especially its R&D system and methodologies in operation and management. As for us as a sort of company to have such a model to learn from is very critical.
Unknown Executive: Thank you.
Ben Wang: Your next question comes from Ben Wang with Deutsche Bank.
Speaker Change #162: In terms of R&D, everything is on track. So far, we have completed multiple rounds of low-volume trial production of prototype vehicles, and according to our testing end.
Speaker Change #162: and including, for example, high temperature, high humidity, durability testing, schedule, everything is going according to plan. And in terms of supply chain readiness, everything is also on track. The plan that production capacity is sufficient to meet the sale targets.
Speaker Change #162: and the factory for manufacturing vehicles has completed production, completed construction, and the four major...
Speaker Change #162: Alliance of Stamping Welding Painting and Assembly are also under testing and installation. We are planning to have key components developed in-house on our balanced electric vehicles.
Speaker Change #162: and we have also been going through performance testing.
Speaker Change #162: X-Furdle Supplyers and our partners have also been developing and building out their production capacity on track. Everything is going according to the recording plan. So overall we're very confident to deliver our web models next year according to plan.
Ben Wang: The second question comes from Ben Wang's new car. Ben Wang's new car.
Speaker Change #163: Your next question comes from you candy with a chest and beastie.
Speaker Change #164: Episode 2
Speaker Change #164: [inaudible]
Speaker Change #164: [inaudible]
you candy: So, I got two questions. The first is last season, Benjamin talked about to reallocate the model display in the channel to maximize the product mix and bring more exposure to the high end model like L8.
Speaker Change #166: How does that go versus expectation? The second question is about does this been quite some restructuring on a gestionator first half? Could you refresh the full year on extensive guidance in the highlight us? Change if any. Thank you.
Speaker Change #167: OK, you can add it to James, I will take you first question
Speaker Change #168: and as we open the most stores in Otopox, the number of displays, both for L.A.H. gradually recovered. We also developed a new online sales channels including the wind.
Speaker Change #168: and to ensure sufficient sales needs for our eight.
Speaker Change #169: So now L.A. sales has been steadily improving since April currently its mostly deliveries has recovered to the range of 6,000 to 7,000 units.
Johnny Tilley: and I expect this is Johnny, but for R&D, we expect the four-year Gap R&D will be...
Unknown Executive: The final delivery. So, for third quarter, we believe our vehicle marking will come back a little bit around, we will be over 19% and total growth marking will be about 10% in third quarter.
Johnny Tilley: Uh, below.
Army: 12 Billion Army, thank you.
Speaker Change #171: Your next question comes from Jing Zhang with CICC.
Unknown Executive: Thank you. Li MAGA has been a great validation of our capabilities in 800-volt high voltage drivetrain and also our ND capabilities in this area, including the drivetrain efficiency of our high voltage platform and also the end-to-end charging experience and capabilities. And as we make improvements in autonomous driving, we have also become a Tier 1 player in autonomous driving and similarly our competitiveness in smart talk space has also been very strong historically.
Speaker Change #172: OK, thank you for your questions. The first question is whether it's related to this situation or not. But in the past few years, we have said a lot of gratitude and kindness.
Speaker Change #173: Li Hong Kong, Tie Li, Tie Li.
Speaker Change #173: [inaudible]
Unknown Executive: So, for our best SUVs, we really only need to solve two important problems. The first one is overall styling of the product. And the second one is to make sure that we have all over 200,000 charging stations by the time we start deliveries of our bad products. So, overall, we are pretty confident in competitiveness of our electric SUVs and our plan or our goal is to become a Tier 1 player in the premium bad market in two years time.
Speaker Change #174: Have larger floor spaces and have the capacity to display nine to 11 vehicles and we will display.
Unknown Executive: You are next question comes from Tina.
Speaker Change #174: All of our models see in these stores.
Speaker Change #175: Doses at the start of this year, we have b.
Speaker Change #175: Mkay came mainly adjustment to our sales channels.
Speaker Change #175: Gradually replacing low performing stores in the shopping malls Liza retail stores in BD auto parts.
Speaker Change #175: We will continue to focus on the best auto policies that top 150 cities.
Tina Hou: How would go then sex? The second question is in our business. Because when we were young, we actually adjusted the quality of the product. Now, it's probably 56,000. Because when we were young, we gave ourselves a higher quality of the product, which is about 151 RMB. [inaudible] and our competition strategy into the second half of the year.
Speaker Change #175: And open.
Large high quality stores there.
Speaker Change #175: In terms of our achievements so far.
Speaker Change #175: Proposal <unk>.
Speaker Change #175: In both the parks.
Speaker Change #175: <unk> increased from 84%.
Speaker Change #175: Last year, and our philosophy at $2, 51% at the end of June 2024.
We plan to further increase the propulsion to close to 50% by end of this year.
Speaker Change #175: Yes.
Speaker Change #175: And regarding your question next.
Speaker Change #175: <unk> for the BV when we launch it all will be the low dose. So we will continue to increase their propulsion.
Speaker Change #175: Okay.
Speaker Change #175: Car Park.
As stores next year, so too.
So city pace, although it is play sports.
Speaker Change #175: The showroom capacity per store also improved alongside the increased proportion of stores sea water parks, the number of showroom vehicles for stool.
Tina Hou: So, especially given that we don't have any new model launches for the second half, how are we expecting to maintain or even improve our sales volume? The second question is, since earlier this year, management has lowered overall volume guidance to a low end of 560,000 units for year 2024. However, we also gave a quite high cap-ax guidance at around 15 billion RMB, I think in first quarter. So, given the lower volume guidance, how should we think about the pace of capacity expansion as well as new cap-ax guidance?
Increased from four six units at the end of last year to $5. One unit at the end of June 24, and we plan to further increase this metric to cover six units per store by Haynesville tissue.
Unknown Executive: Thank you.
Speaker Change #175: Our total number of showroom displays pool has increased from 2642 at the end of last year to 2990 at the end of June to its painful we plan to further increase this number to over <unk>.
Speaker Change #175: <unk> 600.
Speaker Change #175: By end of this year.
Speaker Change #175: Thank you.
Jiong Shao: Hi, Tina, this is Jiong Shao, I will take you your first question. New models are only one of the reasons contributing to sales growth, and from my point of view, efficient sales operations is another way to promote sales, and that's what we are doing now. Looking forward, we will continue to optimize the deployment of our stores while strengthening our capability to gain all-man need. This will be an open door to higher possibilities of sales growth while enhancing the efficiency of sales operations.
Speaker Change #176: 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, Mr. Helen Zhang. Please go ahead.
Helen Zhang: Thank you once again for joining US today. If you have further questions. Please feel free to contact me items Investor Relations team through the contact information provided on our IR website. This concludes today's conference call. You may now disconnect disconnect. Your line. Thank you.
Okay.
Helen Zhang: Yeah.
Helen Zhang: [music].
Jiong Shao: In addition, our recent increase the complicity of the most driving also precipitated sales growth in particular, the sales of 80 max models. As the results show, our market share in the RMB 200,000 and higher A&B market increased to 14.4% in second quarter, 2024 from 13.6% in the first quarter. We end to grow our market share in this segment further to 16% in the last quarter this year.
Helen Zhang: Yeah.
Helen Zhang: Yeah.
Helen Zhang: [music].
Helen Zhang: Yes.
Helen Zhang: [music].
Yeah.
Helen Zhang: [music].
Helen Zhang: Yeah.
Helen Zhang: Yeah.
Helen Zhang: Okay.
Helen Zhang: Okay.
Helen Zhang: Okay.
Tie Li: I think Tina, this is Johnny. I think with James as just mentioned, 16% market share on the A&B market about 200,000 RMB, and if we assume a healthy patent review called market in the second half of this year, yet we have very confident our full year schedule will finally over half-meaning deliveries of vehicles. In the fall of the past, we have optimized our tie-packs of pace, and in the beginning of this year, we estimate the tie-packs is about two billion U.S, dollars.
Helen Zhang: Yeah.
Helen Zhang: Yes.
Helen Zhang: Okay.
Helen Zhang: [noise].
Helen Zhang: Yes.
Helen Zhang: [noise].
Tie Li: Currently, we estimate the tie-packs will be 1.1 to 1.2, and the three cash flow and the two and the two and the three cash flow has been positive. And with the optimize of the tax investment and also the improvement of the opportunity. We are very confident that three cash flow will come back to politics, starting from the top.
Okay.
Helen Zhang: [noise].
Helen Zhang: Yeah.
Helen Zhang: [noise].
Unknown Executive: Your next question comes from Jiong Bo with Sytech Securities. So I have two questions. The first question is about autonomous driving.
Unknown Executive: So what's our wheel about our future plan all in this area? And the second question is about rubber taxi. How we see this trend. Thank you. The second question is about driving.
Yeah.
Helen Zhang: Okay.
Helen Zhang: Okay.
Helen Zhang: Okay.
Helen Zhang: Yeah.
Helen Zhang: Okay.
Helen Zhang: Yeah.
Helen Zhang: [music].
Helen Zhang: Okay.
Helen Zhang: Yeah.
Helen Zhang: Uh huh.
Helen Zhang: Yeah.
Helen Zhang: Okay.
Helen Zhang: Yeah.
Helen Zhang: [music].
Helen Zhang: Yes.
[music].
Helen Zhang: Yes.
Helen Zhang: Okay.
Unknown Executive: Wang Yuecheng and Chu Zhu Chiu will fight next year. This market needs more time to move. The amount of data youth for training has also increased from 1 million clips at the beginning to 2.3 million clips, currently, and the model capability has also been increasing along the way. Many of our early broadcasting users have posted many videos on their end-to-end driving on social media to showcase the great performance on city roads.
Unknown Executive: The rapid iteration of the model can't one be possible without highly efficient and automated testing capabilities, and we rely on world model to build a simulation testing system. In this system, by using user feedback and using real-world scenario reconstruction and a generated technology, we have built a pool of a library of mistakes and testing scenarios for our models to make sure that our models are most fully tested and trained. This testing program can rate the models in terms of safety, comfort, and many other dimensions.
Unknown Executive: And we believe that there has been a fundamental change in the time-striving R&D. It has increased from feature iteration to model capability iteration. And the speed of iteration is highly dependent on whether we have high quality and large amounts of high quality data and large amounts of computing power. And also, what I mentioned earlier, which is the automated simulation testing program. So our end-to-end available system, we're planning for this system, we're planning to launch a greater scale or approximately 10,000 user scale testing program starting in September.
Unknown Executive: And on your question regarding roadorexie, our view, interestingly, is that as we reach level 4 autonomous driving, the demand for right-halian taxi will actually decrease. And I'll excuse that market will take more time for us to look forward and to see how it develops in the future.
Paul Gong: Your next question comes from Paul Gong with UBS. So we have seen recent weak-conflict sentiment in China, but the auto-sale-series continue to grow in terms of the sales volume. Um.
Tie Li: In the environment of the government stimulus, as well as certain pricing adjustment upwards by the German premium plan, have you seen the competitive environment in the high-end market has a sequentially improved recent day? Okay, for this is James, I will take your question. And I believe our recent global sales performance has been largely contributable to our least serious competitive advantage from its product strengths. And our adaptability and ability to make swift adjustment in responding to the market.
Tie Li: Apart from the traditional sales channels in the second quarter, we ramp up our investment in online marketing resources, such as Zhou Yin and the other online platform, achieving significant results as it brought us substantial increase in sales sales. Additionally, we are revolutionizing our sales system by giving more empowerment to regional level. This system allows each region to adopt regional sales strategy in a flexible approach on the condition of the completion profit target given by the company. This approach significantly enhances the sales potential to reach regional to each region.
Tie Li: Last but not least, since June 2024, the annual penetration rate in the R&B 200,000 and higher market has reached 0.50%, which is a significant milestone. After this, I think the premium annual industry will continue to consolidate. And I believe we will also be one of the main beneficiaries during this process. Thank you.
Unknown Executive: My second question is regarding the preparation work for the BEV model for the next year. Given the half a year adjustment of the launching time, will you adopt more new technologies and latest technologies? And how much of the scale have you been preparing for the supply chain in terms of the capacity?
Unknown Executive: Thank you. [inaudible] Okay, this is James, I will take you to the first question. As we opened most doors in auto parks, the number of displays both for L8 has gradually recovered. We also developed the new online sales channels, including the Wings and to ensure sufficient sales leads for L8. So now L8 sales has been steadily improving since April currently. It's mostly deliveries as we cover to the range of 6,000 to 7,000 units. This is Johnny. For R&D, we expect the full year gas R&D will be below 12 billion R&D.
Jing Chang: Your next question comes from Jing Chang with CICC. My first question is about still the distribution network. After the review of the first part of 2024, we have made a lot of improvements, so just as Mr. Li Xiang mentioned about we increase the proportion of the central stores.
Tie Li: So can you share more about the details behind the above changes about the logic and our south from the distribution network extension and also entering to the lower tier cities and also what we should do more to prepare for the launch of the model next year. Okay, Jing Chang, this is James, I will take you to the question. So first of all, we are speaking to our direct sales model and we are ending to display all models in our showrooms and that's what we are doing now.
Tie Li: Our retail stores in auto parks have larger floor spaces and have the capacity to display 9 to 11 vehicles and we will display all of our models in these stores. So since the start of this year, we have been making many adjustments towards our sales channels. We are gradually replacing low performing stores in the showrooms with retail stores in leading auto parks. We will continue to focus on the best auto parks in the top 150 cities and open large high-quality stores there, in terms of our achievements so far, the proportion of our stores in auto parks has increased from 24% last year, end of last year to 31% at end of June 2024.
Tie Li: We plan to further increase the proportion to close to 50% by end of this year. And regarding your question that next year for the BEV when we launched our BEV models so we will continue to increase the proportion and of the car park as stores next year. So to facilitate our display sports, the showroom capacity per store also improved. Alongside increased the proportion of stores in auto parks, the number of showroom vehicles per store has increased from 4.6 units at end of last year to 5.1 units at end of June 2024.
Tie Li: And we plan to further increase this metric to cover six units per store by end of this year. Our total number of showroom displays for has increased from 2642 at end of last year to 2919 at end of June 2024. We plan to further increase this number to over 3600 by end of this year.
Unknown Executive: Thank you.
Jiong Zeng: 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.
Jiong Zeng: Ms. Jen and Zang, please go ahead. Thank you once again for joining us today. If you have further questions, please feel free to contact me out of the investor relations teams through the contact information provided on our IR website.
Unknown Executive: This concludes this conference call. You may now disconnect your line. Thank you.
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