Q4 2025 Li Auto Inc Earnings Call

March 12, 2026

Operator: Hello, ladies and gentlemen, thank you for standing by for Li Auto's Q4 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 Chang, Investor Relations Director of Li Auto. Please go ahead, Janet.

Speaker #1: Today's conference call is being recorded. I will now turn the call over to your host, Ms. Janet Zhang, Investor Relations Director of Li Auto.

Speaker #1: Please go ahead, Janet.

Speaker #2: Thank you, Arpreeta. Good evening and good morning, everyone. Welcome to Li 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 I will post it on the company's IR website.

Janet Chang: Thank you operator. Good evening and good morning everyone, welcome to Li Auto's Q4 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. Li Xiang and our CFO, Mr. Johnny Tie Li, to begin with prepared remarks. Our president, Mr. Donghui Ma, and our CTO, Mr.

Speaker #2: 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.

Speaker #2: Our president, Mr. Dong Hui Ma, and our CTO, Mr. Yan Xie, will join for the Q&A discussion. Before we continue, please be reminded that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995.

Janet Chang: Yan will join for the Q&A discussion. Before we 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 filings 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 and 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.

Speaker #2: 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 filings with the US Securities and Exchange Commission and the Stock Exchange of Hong Kong Limited.

Speaker #2: 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 and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures.

Speaker #2: 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.

Speaker #2: 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. Xiang Li.

Janet Chang: Li Xiang. Please go ahead.

Speaker #2: Please go ahead.

Speaker #3: 大家好, 我是李讲, 欢迎各位参加今天的业绩电话会议。过去一年对于理想汽车来说是一次重要的战略调整期。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直营的体系, 而直营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边面, 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, 我们以结果为导向, 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。我们通过门店汰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店。直接带来了门店效率和人均产出的提升。同时, 为了真正激活一线销售的积极性, 我们也在进行机制上的突破。今年三月, 我们正式推出了门店合伙人计划。门店成为基本经营单元, 优秀店长拥有了真正的经营决策权和利润分享权。从传统的销售管理角色转变成了店面真正的经营者。在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, 我们要以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站自研的增程 3.0 系统, 实现更高的发电效率和更大的发电量。凭借 NAS 优化和我们首创的 EPR 低温启动技术, 理想 R9 可以提供媲美纯电车的静谧性与价值体验, 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 Levis 版本则继承了我们承载了我们对具身智能旗舰 SUV 的深度思考。理想 R9 Levis 将配备全球首个量产全线控底盘和 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。转向制动与悬架响应速度和安全性也大幅提升, 为高阶支架和具身智能提供必要的执行基础。另外值得一提的是, 理想 R9 Levis 将搭载两颗车规级五纳米理想自研的马赫 100 芯片, 有效算力达到了索尔优的六倍, 并通过数据流架构和自研支架的模型更好地适配, 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 I6 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。与此同时, 我们也可以看到随着车主使用里程的增加, 体验上的。然后体验上的反馈驱动了理想 I8 NPS 增长超过 20%。在年初捷兰路发布的新能源汽车品牌健康度研究中, 理想 I8 的 NPS 也位居中大型 SUV 的搒首。伴随这样的 NPS 的表现, 然后三月份以来, 理想 I8 的订单, 然后较一月份有了翻倍以上的增长。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站稳市场。此外, 回顾去年理想 I6 在发布后面临的首交政策、产能提升和购置税补贴政策退坡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具身智能企业的关键一年。面对竞争加剧的新能源汽车市场, 我们将致力于拉高技术护城河。凡城从智能电动车向具身智能企业的跃迁, 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, 继续夯实具身智能企业的核心能力。对理想汽车而言, 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, 真正以具身智能公司的方式运行。造产品就是在造人。在推理芯片、机组模型、软件本体、硬件本体方面, 建设相应的组织能力和培养顶尖的人才。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。相信依托新一代的技术平台, 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 正在逆转公司规模扩大带来的信息流转与决策效率的下滑。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敏捷。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, 我们从我们将把从 2022 年理想 R9 到今天 Tie Li Li 的完整的汽车和具身智能的技术系统变成真正的用户体验和商业价值。从而构建第二个十年的核心壁垒。所以请大家关注并放心地购买, 体验我们新一代的产品。下面有请我们的 CFO 李铁为大家介绍我们的财务表现。 Now translating for Mr. Li Xiang.

Li Xiang: 大家好，我是李想，欢迎参加今天的业绩电话会议。过去一年对于理想汽车来说是一次重要的战略调整期。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直营的体系，而直营体系最应该做的是应该以店面为核心进行运营管理。没有经销商帮我们管理店面，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地开店，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，我们以结果为导向，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及人员的集中。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店，直接带来了门店效率和人均产出的提升。同时，为了真正激活一线销售的积极性，我们也在进行机制上的突破。今年三月，我们正式推出了门店合伙人计划，门店成为基本经营单元，优秀店长拥有了真正的经营决策权和利润分享权，从传统的销售管理角色转变成了店面真正的经营者。在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L9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L9将标配八百伏和5C超充技术，同时搭载我们新一代全栈自研的增程3.0系统，实现更高的发电效率和更大的发电量。凭借NVH优化和我们首创的EGR低温启动技术，理想L9可以提供媲美纯电车的静谧性与驾驶体验，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L9 Livis版本则承载了我们对具身智能旗舰SUV的深度思考。理想L9 Livis将配备全球首个量产全线控底盘和八百伏的全主动悬架系统，提供顶级的舒适性和操控性以及悬架质感。转向、制动与悬架响应速度和安全性也大幅提升，为高阶智驾和具身智能提供必要的执行基础。另外值得一提的是，理想L9 Livis将搭载两颗车规级五纳米理想自研的马赫一百芯片，算力达到了Thor-U的六倍，并通过数据流架构和自研智驾的模型更好的适配，实现真正的自研模型和自研算力的软硬一体。理想L9的换代成功将直接决定了整个L系列的市场上限。如果说上一代理想L9的竞争力主要来自于精准的产品定义，那么新一代理想L9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i6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。与此同时，我们也可以看到，随着车主使用里程的增加，体验上的反馈驱动了理想i8 NPS增长超过20%。在年初杰兰路发布的新能源汽车品牌健康度研究中，理想i8的NPS也位居中大型SUV的榜首。伴随这样的NPS的表现，三月份以来理想i8的订单较一月份有了三倍以上的增长。理想i6与理想i8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领市场。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坡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跻身智能企业的关键一年。面对竞争加剧的新能源汽车市场，我们将致力于拉高技术护城河，完成从智能电动车向跻身智能企业的跃迁，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，继续夯实跻身智能企业的核心能力。对理想汽车而言，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，真正以跻身智能公司的方式运行。造产品就是在造人。在推理芯片、基座模型、软件本体、硬件本体方面建设相应的组织能力和培养中间的人才。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。相信依托新一代的技术平台，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正在逆转公司规模扩大带来的信息流转以及决策效率的下滑。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敏捷。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，我们将把从2022年理想L9到今天积累的完整的汽车和跻身智能的技术系统变成真正的用户体验和商业价值，从而构建第二个十年的核心壁垒。所以请大家关注并放心地购买体验我们新一代的产品。下面有请我们的CFO李铁为大家介绍我们的财务表现。

[Company Representative] (Li Auto Inc.): Now translating for Mr. Li Xiang. Thank you for joining our earnings call today. Over the past year, Li Auto has been going through an important period of strategic adjustments. As we scaled, we reassessed the 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. 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.

[Translator]: Now translating for Mr. Li Xiang. Thank you for joining our earnings call today. Over the past year, Li Auto has been going through an important period of strategic adjustments. As we scaled, we reassessed the 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. 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.

Speaker #3: Thank you for joining our earnings call today. Over the past year, Li 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.

Speaker #3: The problem that we've identified is that in the past, we have used a

Speaker #1: A dealership mindset to to manage our storefronts However , for direct sales model , the key is really managing each storefront and therefore without dealers , we need to figure out how to manage these storefronts in effectively on our own .

Speaker #1: 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 in productivity per salesperson as our key metrics We've implemented a series of targeted changes .

[Company Representative] (Li Auto Inc.): 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 address site selection issues and move sales teams from lower traffic second-tier malls to higher potential locations, such as prime tier one 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.

[Translator]: 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 address site selection issues and move sales teams from lower traffic second-tier malls to higher potential locations, such as prime tier one 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.

Speaker #1: 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 areas.

Speaker #1: Second tier malls to higher potential locations such as prime tier one shopping districts and flagship 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 .

Speaker #1: 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 .

[Company Representative] (Li Auto Inc.): 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 Q2. With comprehensive upgrades from powertrain, autonomous driving to chassis 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.

[Translator]: 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 Q2. With comprehensive upgrades from powertrain, autonomous driving to chassis 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.

Speaker #1: 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 .

Speaker #1: We we will officially launch the all new L9 lineup in the second quarter with comprehensive upgrades from powertrain , autonomous driving to chassis technology , and we aim to create a clear step change in user experience versus competing models and regain leadership in the flagship SUV segment .

Speaker #1: The new L9 will come standard with 800 volt architecture and 5G 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 NVH improvements and our proprietary EGR low temperature start technology .

[Company Representative] (Li Auto Inc.): 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 NVH improvements and our proprietary EGR low temperature start technology, the new Li L9 offers a cabin quietness and driving experience comparable to BEV, 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 30,000 kilometers. Our top of the line, Li L9 Livis, priced at RMB 559,800, reflects our vision for a flagship SUV in an era 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.

[Translator]: 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 NVH improvements and our proprietary EGR low temperature start technology, the new Li L9 offers a cabin quietness and driving experience comparable to BEV, 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 30,000 kilometers. Our top of the line, Li L9 Livis, priced at RMB 559,800, reflects our vision for a flagship SUV in an era 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.

Speaker #1: The new L9 offers a cabin quietness and drive experience comparable to the 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 30,000 km.

Speaker #1: Our top of the line lead L9 prices R&B 559,800 reflects our vision for flagship SUV in an era of embodied AI . It will feature the world's first mass produced , fully drive by wire , 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 .

[Company Representative] (Li Auto Inc.): 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 Li L9 Livis will be powered by 2 in-house developed 5nm M100 chips, delivering 6 times the effective computing power of four Orins. Together with our data flow architecture and an in-house intelligent driving stack, it enables end-to-end integration of our algorithms and computing platforms. The success of the new Li L9 will directly determine the market potential of the entire L series. If the previous Li L9's competitiveness was driven primarily by smart product definition, the new generation Li L9 will build its core advantage through technology. Our BEV models are also continuing to ramp up. With sustained efforts alongside our suppliers, the supply constraints on the Li i6 have been gradually easing.

[Translator]: 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 Li L9 Livis will be powered by 2 in-house developed 5nm M100 chips, delivering 6 times the effective computing power of four Orins. Together with our data flow architecture and an in-house intelligent driving stack, it enables end-to-end integration of our algorithms and computing platforms. The success of the new Li L9 will directly determine the market potential of the entire L series. If the previous Li L9's competitiveness was driven primarily by smart product definition, the new generation Li L9 will build its core advantage through technology. Our BEV models are also continuing to ramp up. With sustained efforts alongside our suppliers, the supply constraints on the Li i6 have been gradually easing.

Speaker #1: In addition , the L9 , L9 will be powered by two in-house developed five nanometer M100 chips , delivering six times the effective computing power of four U .

Speaker #1: Together with our data flow architecture and 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 .

Speaker #1: If the previous L9 competitiveness was driven primarily by smart product definition , the new generation L9 will build its core advantage through technology Our best models are also continuing continuing to ramp up with sustained efforts alongside our suppliers .

Speaker #1: The supply constraints on the 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 I8's Mbps up by more than 20% in the Nev brand health study recently released by Lab Roads .

[Company Representative] (Li Auto Inc.): 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 Li L8 NPS up by more than 20%. In the NEV Brand Health Study, recently released by LandRoads, the Li L8 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, Li L8 orders have increased 33% versus the same period in February, and 179% versus January. Together, the Li L6, L8 are strengthening the market foundation of our BEV portfolio. Our priority is to fully resolve the issues we encountered earlier to ensure our BEV offerings establish a solid foothold in the market.

[Translator]: 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 Li L8 NPS up by more than 20%. In the NEV Brand Health Study, recently released by LandRoads, the Li L8 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, Li L8 orders have increased 33% versus the same period in February, and 179% versus January. Together, the Li L6, L8 are strengthening the market foundation of our BEV portfolio. Our priority is to fully resolve the issues we encountered earlier to ensure our BEV offerings establish a solid foothold in the market.

Speaker #1: The Li also ranked number one in NPS among all large SUVs . Improved experience and satisfaction are now translating into a recovery in order sales since March Li eight orders have increased 33% versus the same period in February , and 179% versus January .

Speaker #1: Together , the VI68 are strengthening the market foundation of our Bev portfolio . Our priority is to fully resolve the issues we encountered earlier to ensure our CF offerings establish a solid foothold in the market Looking back at last year , the Li six faced multiple time timing related headwinds after launch , including initial sales policies .

[Company Representative] (Li Auto Inc.): Looking back at that last year, the Li L6 faced multiple timing-related headwinds after launch, including initial sales policies, the production ramp, and the phase-out of purchase tax subsidies, which pressured gross 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 Li L9, 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 Li Auto's evolution into an embodied AI company. As competition intensifies in the NEV market, we will 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.

[Translator]: Looking back at that last year, the Li L6 faced multiple timing-related headwinds after launch, including initial sales policies, the production ramp, and the phase-out of purchase tax subsidies, which pressured gross 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 Li L9, 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 Li Auto's evolution into an embodied AI company. As competition intensifies in the NEV market, we will 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.

Speaker #1: The production ramp and the phaseout of purchase tax subsidies , which pressured gross 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 Li i9 , a new flagship Bev SUV , further expanding our portfolio to meet a wider range of customer needs 2026 will be a pivotal year in Li Auto's evolution into an embodied AI company .

Speaker #1: As competition intensifies in the SUV market . We will 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 .

[Company Representative] (Li Auto Inc.): In 2025, our R&D spending totaled RMB 11.3 billion, which was approximately 50% 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 Li Auto, AI has two main dimensions: creating AI and applying AI, bringing our products 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 operate the way an embodied AI company should. We're developing capabilities and attracting top talents across 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.

[Translator]: In 2025, our R&D spending totaled RMB 11.3 billion, which was approximately 50% 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 Li Auto, AI has two main dimensions: creating AI and applying AI, bringing our products 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 operate the way an embodied AI company should. We're developing capabilities and attracting top talents across 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.

Speaker #1: Our R&D spending totaled R&B 11.3 billion , which approximately was 8,050% of 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 .

Speaker #1: For Li Auto , AI has two main dimensions , creating AI and applying AI Bringing our products to people to life while improving efficiency across the organization .

Speaker #1: On the AI side, we have rebuilt our R&D organization from the ground up to operate the way an embodied AI company should.

Speaker #1: We're developing capabilities and attracting top talent across interface chips , Foundation models , software and hardware as 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 .

[Company Representative] (Li Auto Inc.): Built on our next generation technology platform, our products will evolve in ways you will see over time. They will not be mere extensions of traditional cars or EVs. Instead, they will be proactive and increasingly lifelike in how they learn and improve, and that will be reified 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 are 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.

[Translator]: Built on our next generation technology platform, our products will evolve in ways you will see over time. They will not be mere extensions of traditional cars or EVs. Instead, they will be proactive and increasingly lifelike in how they learn and improve, and that will be reified 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 are 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.

Speaker #1: Our products will evolve in ways you will see over time. They will not be mere extensions of traditional cars or EVs. Instead, they will be proactive and increasingly lifelike in how they learn and improve.

Speaker #1: And that will be reflected in our high frequency experiences in daily life . 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 are already seeing early results in day to day operations this year .

Speaker #1: 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 L9 launch in 2022 to today's broader automotive and embodied AI technology .

[Company Representative] (Li Auto Inc.): In closing, I want to emphasize that we will convert the capabilities and systems we built from the Li L9 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 to the call to our CFO, Johnny Tian Li, to walk you through our financial performance.

[Translator]: In closing, I want to emphasize that we will convert the capabilities and systems we built from the Li L9 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 to the call to our CFO, Johnny Tian Li, to walk you through our financial performance.

Speaker #1: 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 products.

Speaker #1: With that , we will turn it over to the call to our CFO , Jonny , to walk you through our financial performance .

Johnny Tie Li: Oh, thank you, Lisa. Hello, everyone. Given time constraints, my remarks today will be limited to Q4 financial highlights. All figures will be quoted in RMB unless otherwise stated. For further details, including the corresponding US dollar amounts and full-year financial results, we encourage you to refer to our earnings press release. Total revenues in the Q4 were RMB 28.8 billion, down 35% year-over-year and up 5.2% quarter-over-quarter. This included RMB 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 deliveries, partially offset by lower average selling price due to the different mix following the commencement of the L6 deliveries.

Speaker #1: Thank you Lisa . Hello , everyone . Given our time constraints , my remarks today will be limited to fourth quarter financial highlights .

Speaker #1: All figures will be quoted in RMB unless otherwise stated . For further details , including the corresponding US dollar amounts and full year financial results , we encourage you to refer to our earnings press release Total revenues in the fourth quarter were RMB 28.8 billion , down 35% year over year and up 5.2% quarter over quarter .

Speaker #1: This included RMB 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 .

Speaker #1: The sequential increase was mainly due to the increase in vehicle deliveries , partially offset by lower average selling price due to the different mix Following the commencement of the deliveries , cost of sales in the fourth quarter was RMB 23.6 billion , down 33% year over year and up 3.3% quarter over quarter Gross profit in the fourth quarter was RMB 5.1 billion , down 42.8% year over year and up 14.8% quarter over quarter Vehicle margin in the fourth quarter was 16.8% versus 19.7% in the same period last year .

Johnny Tie Li: Cost of sales in Q4 was RMB 23.6 billion, down 33% year-over-year and up 3.3% quarter-over-quarter. Gross profit in Q4 was RMB 5.1 billion, down 42.8% year-over-year and up 14.8% quarter-over-quarter. Vehicle margin in Q4 was 16.8% versus 19.7% in the same period last year, and 15.5% 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 Li 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 Li L6 delivery.

Speaker #1: And 15.5% in the prior quarter The year over year decrease was mainly due to different product mix . The sequential increase was mainly due to the estimate estimated 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 I6 deliveries , gross margin in the fourth quarter was 17.8% versus 20.3% in the same period last year .

Johnny Tie Li: Gross margin in Q4 was 17.8% versus 20.3% in the same period last year, and 16.3% in the prior quarter. Operating expenses in Q4 were RMB 5.6 billion, up 5.8% year-over-year and down 1.3% quarter-over-quarter. R&D expenses in Q4 were RMB 3 billion, up 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 Q4 were RMB 2.6 billion, down 14% year-over-year and 4.4% quarter-over-quarter. The year-over-year decrease was mainly due to decreased employee compensation.

Speaker #1: And 16.3% in the prior quarter Operating expenses in the fourth quarter were RMB 5.6 billion , at 5.8% year over year , and down 1.3% quarter over quarter R&D expenses in the fourth quarter were RMB 3 billion 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 Expenses in the fourth quarter were RMB 2.6 billion , down 14% year over year and 4.4% quarter over quarter .

Speaker #1: The year over year decrease was mainly due to decreased employee compensation loss from operations in the fourth quarter was RMB 442.6 million , versus RMB 3.7 billion .

Johnny Tie Li: Loss from operations in Q4 was RMB 442.6 million versus RMB 3.67 billion income from operations in the same period last year, and RMB 1.2 billion loss from operations in the prior quarter. Operating margin in Q4 was -1.5%, versus 8.4% in the same period last year, and -4.3% in Q3. Net income in Q4 was RMB 20.2 million, versus RMB 3.5 billion net income in the same period last year and RMB 624.4 million net loss in the prior quarter.

Speaker #1: Income from operations in the same period last year, and RMB 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.

Speaker #1: And negative 4.3% in the third quarter. Net income in the fourth quarter was RMB 20.2 million versus RMB 3.5 billion net income in the same period last year and RMB 624.4 million.

Speaker #1: Net loss in the prior quarter Diluted net earnings per ads attributable to ordinary shareholders was RMB one cents in the fourth quarter versus RMB 3.31 diluted net earnings in the same period last year , and RMB zero point six two diluted net loss in the prior quarter Turning to our balance sheet Balance sheet and cash .

Johnny Tie Li: Diluted net earnings per ADS attributable to ordinary shareholders was RMB 0.01 in Q4, versus RMB 3.31 diluted net earnings in the same period last year and RMB 0.62 diluted net loss in the prior quarter. Turning to our balance sheet and cash flow. Our cash position remains solid with a year-end balance of RMB 101.2 billion. Net cash provided by operating activities in Q4 was RMB 3.5 billion, versus RMB 8.7 billion provided in the same period last year, and RMB 7.4 billion used in Q3. Free cash flow was RMB 2.5 billion in Q4 versus RMB 6.1 billion in the same period last year, and negative RMB 8.9 billion in the prior quarter.

Speaker #1: Cash flow . Our cash position remains solid with a year end balance of RMB 101.2 billion . Net cash provided by operating activities in the fourth quarter was RMB 3.5 billion versus RMB 8.7 billion , provided in the same period last year , and RMB 7.4 billion used in the third quarter .

Speaker #1: Free cash flow was RMB 2.5 billion in the fourth quarter versus RMB 6.1 billion in the same period last year , and negative RMB 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 85,090 thousand vehicles and the quarterly total revenue to be between RMB 20.4 billion and RMB 21.6 billion .

Johnny Tie Li: At the end of 2025, we had a total of 30,728 employees. Now for our business outlook. For Q1 2026, the company expects the deliveries to be between 85,000 and 90,000 vehicles, and quarterly total revenue to be between RMB 20.4 billion and 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.

Speaker #1: This business outlook reflects the company's current and preliminary view on its business situation and market conditions , which is subject to change . That concludes our prepared remarks .

Speaker #1: I will now turn the call over to the operator to start our Q&A session. Thank you.

Speaker #2: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced.

Operator: Thank you. If you wish to ask a question, please press star one 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 Hsiao with Morgan Stanley.

Speaker #2: For the benefit of all participants on today's call , please limit yourself to two questions . And if you have additional questions , you can reenter the Q .

Speaker #2: If you are a Mandarin speaker, please ask your questions in Chinese first. Then follow with English translation. Your first question comes from Tinsel with Morgan Stanley.

Speaker #3: With the team, can—are we... That 2020 has... the... been a... So my first question is, on the channel, I think the management just mentioned that Li Auto now plans to optimize the sales networks and report close up to 100 stores. What are the company's plans and progress regarding channel optimization?

Tim Hsiao: So my first question is about the channel. I think the management just mentioned that Li Auto now plans to optimize its sales networks and reportedly close up to 100 stores. What are the company's plans and progress regarding channel optimization? Separately, could you elaborate a bit more about the store partner mechanism? The CEO just mentioned, in addition to the incentive program to the store manager, any further implementation details you can share with us? When should we expect it to show positive results? That's my first question.

Speaker #3: Separately, could you elaborate a bit more about the store partner mechanism the CEO just mentioned? In addition to the incentive program for the store manager, are there any further implementation details you can share with us?

Speaker #3: And when should we expect it to show positive results ? That's my first question

Speaker #1: For the Janet Chang Could you The New Woman . Can you In the The Changing Future The . She Can Anita . First .

Donghui Ma: 同时，我们也是在不断去提升交付的体验，包含门店的接待、试驾和交付的体验，以及在节假日高速的超充专人值守。用户的满意度和好评在持续地提升。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人的机制。核心的话是我们将门店作为基本的经营单元，是希望走出一条具有理想特色的汽车直营的模式。首先，我们肯定会坚持直营，直营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。那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来做。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评估。权责绑定到人，从源头去提升门店的经营质量。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经营的改善和提升。最后，我们始终认为，销售体系的健康和效率是保证销量和市场地位的核心。从去年八月份开始，我们用了将近七个月的时间，系统理顺了直营模式的管理体系，包括高质量开店、精细化运营，以及对于店长的激励、一线的培训和功能性的机制，全力在夯实销售体系的长期竞争力。谢谢。

[Company Representative] (Li Auto Inc.): 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, phasing out a small number of underperforming stores that cannot reach their sales targets. 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 parts to strengthen brand presence and attract higher quality traffic. As our city coverage, our footprint in lower-tier cities is already fairly completed. Going forward, we'll focus on increasing store density in higher-tier cities, aligned with our ramp up of BEV sales.

[Translator]: 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, phasing out a small number of underperforming stores that cannot reach their sales targets. 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 parts to strengthen brand presence and attract higher quality traffic. As our city coverage, our footprint in lower-tier cities is already fairly completed. Going forward, we'll focus on increasing store density in higher-tier cities, aligned with our ramp up of BEV sales.

Speaker #1: 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 , phasing out a small number of underperforming stores that cannot reach their sales targets .

Speaker #1: And this is simply part of normal operations to address past issues like poor store locations or declining foot traffic in certain shopping districts .

Speaker #1: 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 .

Speaker #1: As our city coverage , our footprint and lower city tier cities is already fairly complete . Complete , and it's going forward . We'll focus on increasing store density and higher tier cities aligned with our ramp up of Bev sales Meanwhile , we'll continue to improve sales and services experience , service experience covering in-store reception , test drives , delivery , highway supercharging stations staffed with attendants during holidays .

[Company Representative] (Li Auto Inc.): Meanwhile, we'll continue to improve sales and services experience, service experience covering in-store reception, test drives, delivery, and highway supercharging stations staffed with attendants during holidays. As a result, we've been seeing user satisfaction and positive feedback keep climbing. While we're on the topic, let me also share a bit about our new store partner program officially launched on 1 March. We're treating each store as a core business unit and building a direct sales model that's truly unique to Li Auto. 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 frontline teams and enable them to think like real business operators.

[Translator]: Meanwhile, we'll continue to improve sales and services experience, service experience covering in-store reception, test drives, delivery, and highway supercharging stations staffed with attendants during holidays. As a result, we've been seeing user satisfaction and positive feedback keep climbing. While we're on the topic, let me also share a bit about our new store partner program officially launched on 1 March. We're treating each store as a core business unit and building a direct sales model that's truly unique to Li Auto. 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 frontline teams and enable them to think like real business operators.

Speaker #1: As a result , we've been seeing user satisfaction and positive feedback . Keep climbing while we're on the topic . Let me also share a bit about our new store partner program .

Speaker #1: 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 Li Auto Inc. 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 frontline teams and enable them to think like real business operators in terms of store operations .

[Company Representative] (Li Auto Inc.): In terms of store operations, store managers now have autonomy in three areas: customer acquisition, day-to-day operations, and managing their own teams. 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 one on 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.

[Translator]: In terms of store operations, store managers now have autonomy in three areas: customer acquisition, day-to-day operations, and managing their own teams. 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 one on 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.

Speaker #1: 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 .

Speaker #1: No longer just on sales volume . Now , 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 .

Speaker #1: This new model also helps us solve past problems at the root , like opening stores without thinking through and without thinking through , and other issues on store expansion .

Speaker #1: Going forward . Store managers will be involved from day to day on 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 .

[Company Representative] (Li Auto Inc.): 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.

[Translator]: 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.

Speaker #1: All is to build a truly sustainable competitive sales and service network for the long run Thank you .

Speaker #3: Thank you . When you are chanting , LDL levels . The For the questions about the product , the new product for the upcoming .

Tim Hsiao: Thank you. My second question is about the product, the new product, for the upcoming all-new Li L9 and the Li L9 Livis. Could you please shed light on the launch timeline?

Speaker #3: All new L9 and L9 levels . Could you please shed light on the long timeline pricing strategy , product Competitivity competitiveness and in the crowded race and vehicle profitability .

Tim Hsiao: Pricing strategy, product competitiveness in a crowded race, and vehicle profitability. Thank you.

Speaker #3: Thank you

Speaker #4: Hey . Main So Daniel , how do You . You You See The The The Sandy Project A . Language A MCO

Li Xiang: 我是李想。这个搭载我们自研芯片Mach 100的全新一代理想L9将于二季度正式发布。该款车型之所以我们称之为具身智能，核心在于我们从整个这套系统的感知、大脑，还有本体三个维度，进行了整个技术的重构。我觉得第一重要的其实先讲的是感知。无论是智能驾驶、自动驾驶，还是今天的具身智能，本质上一个最大的挑战相当于其实我们在通过看视频来学习，进行训练的学习，以及通过看视频来进行对车辆的控制。本质上，这个已经大家都在用的一个技术体系，其实并不真正地理解物理的世界，而是通过一种模仿学习的方式。在感知方面，我们将突破今天的摄像头，2D摄像头和激光雷达的方案，升级到3D VHD，真正地像人一样去感知和理解物理世界，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有力的计算，也就是芯片层面，联合进行设计进行突破。我觉得这将是无论是自动驾驶还是具身智能，在今年会发生一次全领域范围的最大的重要突破。伴随而来，我觉得VLA也会变成真正的VLA，language并不是只是为了识别到底是什么东西，而是language真正像人一样对物理世界理解和思考。我觉得这是一个重要的变化。另外一方面，作为机器的本体，也会发生重大的变化。我们在L9上搭载了完整的线控系统，包含了线控转向、线控制动、四轮转向，以及用四个独立电机控制的800伏的驱动悬架。这使得车辆整个的响应速度、安全性远远超过了传统的汽车。并且还有一个很重要的一点，就是不再通过传统的MCU再到另外一个控制器MCU上进行控制，而是可以直接通过模型向控制系统直接进行输出。我觉得这样的一套体系，我们认为其实是未来整个汽车具身智能化的一套重要的标准。我们将要在理想L9上全部体现。

Speaker #1: So . First to your question about products This year we will be launched in Q2 . We'll be launch launching our all new L9 equipped with our in-house .

[Company Representative] (Li Auto Inc.): 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. The reason we call it an embodied AI robot is really because we've completely revamped the technical stack from sensing, brain, and body from all these three dimensions. First of all, let me start with the autonomous driving front. In the past, the technical paradigm is really to have the machines learn to drive through watching videos. They're not really understanding the physical world, but rather they're just watching videos and try 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.

[Translator]: 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. The reason we call it an embodied AI robot is really because we've completely revamped the technical stack from sensing, brain, and body from all these three dimensions. First of all, let me start with the autonomous driving front. In the past, the technical paradigm is really to have the machines learn to drive through watching videos. They're not really understanding the physical world, but rather they're just watching videos and try 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.

Speaker #1: Developed Moq 100 chips . And the reason we call it an embodied AI robot is really because we've completely revamped the technical stack from a sensing brain and body from all these three dimensions .

Speaker #1: So first of all , let me start with the the autonomous driving front 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 try to imitate human behavior from these videos However , we've , as we conducted our R&D identified that the most efficient way is really to understand the physical world .

Speaker #1: So when we say a 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 .

[Company Representative] (Li Auto Inc.): 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. As we move from two-dimensional cameras to three-dimensional vision transformers, we can really understand the 3D world much better. That requires a revamp of the full stack from video encoder to the chips to the algorithms. We can how we can enable compute directly through from a large model to actually enable physical behavior. I believe this will be a major technological shift across the world across autonomous driving as well as physical robots happening this year. As I mentioned earlier, this is going to be real VLA.

[Translator]: 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. As we move from two-dimensional cameras to three-dimensional vision transformers, we can really understand the 3D world much better. That requires a revamp of the full stack from video encoder to the chips to the algorithms. We can how we can enable compute directly through from a large model to actually enable physical behavior. I believe this will be a major technological shift across the world across autonomous driving as well as physical robots happening this year. As I mentioned earlier, this is going to be real VLA.

Speaker #1: 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 We , we can how we can enable compute directly from a large model to actually enable physical behavior .

Speaker #1: And I believe this will be a major technological shift across the world, across autonomous driving as well as physical robots happening this year.

Speaker #1: So as I mentioned earlier , this is going to be a real viola . The language model is really understand and thinks about the physical world before it makes the decision to move .

[Company Representative] (Li Auto Inc.): The language models really understand and thinks about the physical world before it makes the decision to move. That's on the sensing side, perception side. Next on the hardware itself, on the execution side, L9, as we've released earlier, will be equipped with a fully drive-by-wire system, which include drive-by-wire steering, four-wheel steering, electromechanical 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.

[Translator]: The language models really understand and thinks about the physical world before it makes the decision to move. That's on the sensing side, perception side. Next on the hardware itself, on the execution side, L9, as we've released earlier, will be equipped with a fully drive-by-wire system, which include drive-by-wire steering, four-wheel steering, electromechanical 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.

Speaker #1: So that's on the sensing side perception side . And then next on the hardware itself , on the execution side . VL nine as we released earlier , will be equipped with a fully drive by wire system , which includes drive by wire sharing , four wheel steering , electrical , mechanical , mechanical , brake , 800 volt , fully independent active suspension where we have pumps powering each suspension , each wheel up independently .

Speaker #1: 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 .

[Company Representative] (Li Auto Inc.): 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. That's what we believe is the real smart car is going to be like. We believe that L9 is going to be the beginning of all this. Thank you.

[Translator]: 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. That's what we believe is the real smart car is going to be like. We believe that L9 is going to be the beginning of all this. Thank you.

Speaker #1: So that's what we believe the real smart car is going to be like, and we believe that L9 is going to be the beginning of all this.

Speaker #1: Thank you

Speaker #2: Your next question comes from Paul Gong with UBS

Operator: Your next question comes from Paul Gong with UBS.

Speaker #5: Oh , I what Are The the Your . So my first question is regarding the 2026 sales volume targets . Based on the current environment and the more importantly is how should we balance the volume and market share targets versus our own margins ?

Paul Gong: 感谢接受我的提问。我的第一个问题是关于2026年的一个目标，我不知道就管理层当前基于当前的市场情况之下，对我们26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。My first question is regarding the 2026 sales volume target, based on the current environment.

Paul Gong: More importantly is how should 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?

Speaker #5: How important are volume targets in our overall balance of the development?

Li Xiang: 你好，我是李想。我们对这个，因为2026年是我们的第三代平台向市场交付的一年，所以我们对今年的产品和技术竞争力是十分有信心的。但是呢，其实整个市场的竞争也在加剧。今年20万以上的中国市场新车的数量比过去几年加起来还要多，而今年大盘的增量比较有限。所以呢，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为我们长期的重要竞争力，所以这是第一点。我觉得第二点呢，是L系列以L9为主的L系列的换代的成功，如何把产品发布好，如何把产品交付好，这也都是实打实的，每一个环节都要做好的。我觉得第三个重点，是我们的纯电要稳定的销量，无论是Li i6、Li i8还是Li MEGA，还有在下半年推出的理想的Li i9，我们希望我们的纯电的销量在彻底解决了供应的问题，还有过去遇到的各种的发布的问题以后，能够让我们的纯电在市场，在中国市场稳稳地站住。我觉得这是我们讲的三个核心的策略。那加二呢，一方面其实是我们过去几年在整个智能化的投资，包含芯片、模型，以及各种的研究方面的能力，我觉得会在今年体现出来完全不同的产品体验，而且最重要的产品体验是proactive的，是主动的，是高频的，也是用户每天无时无刻都能收到的。我觉得这是辅助的两个策略之一。我觉得另外一个策略，就是我们在海外也会有显著的进展和开拓，虽然是我们正式要做海外的第一年，但是我觉得这也是我们长期的一个重要的机会，所以这是我们真正支撑我们相比去年能够实现20%以上的销量增长，在这样的一个激烈竞争的环境下所必须做好的三加二的一套策略。

Speaker #4: In With the I , I , I should have the , you know Understand the the . The information The The The The the the Your The title So

Speaker #1: So . 2026 . As you all know , is going to be an important year from product perspective , as we release the third generation of product , we are very well .

[Company Representative] (Li Auto Inc.): 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 RMB and above market than all of the years previously combined. At the same time, the overall growth of the market is very limited. Considering all this, our goal, our total goal is still to reach a 20% year-on-year growth for all of 2026. To support all of this, we have a 3 + 2 strategy. First, starting on the three. The three pillars to support our sales.

[Translator]: 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 RMB and above market than all of the years previously combined. At the same time, the overall growth of the market is very limited. Considering all this, our goal, our total goal is still to reach a 20% year-on-year growth for all of 2026. To support all of this, we have a 3 + 2 strategy. First, starting on the three. The three pillars to support our sales.

Speaker #1: 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 RMB and above market than all of the years previously combined But at the same time , the overall growth of the market is very limited .

Speaker #1: So considering all this , our goal , our total goal is still to reach a 20% year on year growth for all of 2026 and to support all of this , we have a three plus two strategy .

Speaker #1: First , starting on the three , the three pillars to support our sales . First one is the sales system . We will continue to be committed to our direct sales model .

[Company Representative] (Li Auto Inc.): The first one is the sales system. We will continue to be committed to our direct sales model. As we've implemented new mechanisms, we will start to see benefits this year of the direct sales model. The second pillar is the L series launch, starting with the Li L9. 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 production to supply, to delivery, to ensure the success of Li L9 and upcoming L series models. The third pillar is BEV ramp up, which includes Li i6, Li i8, Li i9, and Li MEGA. In the past few months, we've addressed the supply constraints. We've also fixed issues around release, sales, and marketing.

[Translator]: The first one is the sales system. We will continue to be committed to our direct sales model. As we've implemented new mechanisms, we will start to see benefits this year of the direct sales model. The second pillar is the L series launch, starting with the Li L9. 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 production to supply, to delivery, to ensure the success of Li L9 and upcoming L series models. The third pillar is BEV ramp up, which includes Li i6, Li i8, Li i9, and Li MEGA. In the past few months, we've addressed the supply constraints. We've also fixed issues around release, sales, and marketing.

Speaker #1: And as we've implemented new mechanisms, we will start to see benefits this year from the direct sales model. And the second pillar is the L Series launch, starting with the L9.

Speaker #1: 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 L9 and upcoming L series models .

Speaker #1: And the third pillar is Bev ramp up , which includes I6 , I-8 , I-9 , and Mega in the past few months , we've addressed the supply constraints .

Speaker #1: We have also fixed issues around release sales and marketing , so this year is as the year goes on , we believe that the volume on our best 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 two , the first one is the AI related investments in the past year , we spent billions on chips on models and this this is going to be the year , I believe that all these investments start to bear fruit , meaning that they will provide a very differentiated 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 .

[Company Representative] (Li Auto Inc.): This year, as the year goes on, we believe that the volume on our L 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 two, the first one is AI-related investment. In the past year, we've spent RMB 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 differentiated product experience to our users. To summarize, these experiences will be proactive, will be high frequency that every consumer can feel and benefit from in their everyday life. The second of the two is our overseas strategy.

[Translator]: This year, as the year goes on, we believe that the volume on our L 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 two, the first one is AI-related investment. In the past year, we've spent RMB 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 differentiated product experience to our users. To summarize, these experiences will be proactive, will be high frequency that every consumer can feel and benefit from in their everyday life. The second of the two is our overseas strategy.

Speaker #1: The second of the two is our overseas strategy . This is going to be our first full year where we officially run our overseas markets , but through the years of accumulation , before and we we believe that this year is going to start to see results and support a long term growth .

[Company Representative] (Li Auto Inc.): 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. Overseas remains what we see as a long-term growth opportunity. Thank you.

[Translator]: 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. Overseas remains what we see as a long-term growth opportunity. Thank you.

Speaker #1: And overseas remains . What we see as a long term growth opportunity . Thank you

Paul Gong: 好，我第二个问题是关于原材料价格涨价的影响，就我们看到不管是电池、内存还是铜啊、铝啊以及贵金属，其实都在最近都在涨价，不知道公司在此有一些什么样的措施可以应对，是通过供应链来消化，还是会转嫁一部分到车价里面去。My second question is regarding the impact of raw material cost inflation, including metals, memories and batteries.

Speaker #5: I I Xiao Hua So my second question is regarding the impact of raw material costs , inflation , including the metals , memories and batteries .

Speaker #5: What would be the strategy for the company to fix this challenge? Shall we absorb it within the supply chain, or should we pass this part of the cost inflation to the downstream?

Paul Gong: 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?

Speaker #4: Well , sure , the women If The IoT Would For The The . For the full new And Paper The The PIN For the

Donghui Ma: 我是马东辉。我来回答这个问题。的确，这一轮像电池、包含存储芯片，这些核心零部件确实对于单车成本带来了不小的影响。面对这个压力，我们应对措施主要有几点。第一个，肯定还是要强化和供应商的协同。一方面是稳价格，另外一方面还是要保供应。在成本上，我们和相关的核心供应商都签了长期的LTA的协议，把关键的原材料、零部件的价格提前锁定，来对冲短期的波动。在供应上，尤其是最近存储之类的智能化部件比较紧张，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，有合同、有调价机制的，我们会严格按照合同来执行。没有约定的，我们也坚持和供应商共担成本，一起来扛周期，实现互利共赢。在这里，也非常感谢所有供应链伙伴长期以来对于理想汽车的支持。第二个，就是强化端到端的降成本，包括从产品研发、制造、物流，甚至质量全链条去挖降本的空间，同时通过平台化的研发来提高零部件的复用率，把规模效应做出来，尽量在内部把外部涨价的压力消化掉。像我们通过自研自制的增程器、电驱动、功率模块，还有自研代工的预控器、碳化硅功率芯片，以及M100的智驾芯片，包含电池包，都能够帮助我们更好地控制成本。还有一点就是新车型定价会更加合理、更加稳健。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，保证公司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，我们是有信心，通过供应链的协同、长期协议的锁价、平台化、自研技术降本，再加上合理的定价，把原材料涨价的影响控制在可控范围，保证公司的毛利率和经营质量保持稳定。谢谢。

[Company Representative] (Li Auto Inc.): 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. Firstly, 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. On the supply side, especially for AI related components like memory chips, we have been tight recently. We're continuing to work with key suppliers and to secure dedicated allocation, ensure priority of support for production and new model launches. Where contracts include clear pricing terms and adjustment mechanism, we strictly adhere to these terms.

[Translator]: 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. Firstly, 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. On the supply side, especially for AI related components like memory chips, we have been tight recently. We're continuing to work with key suppliers and to secure dedicated allocation, ensure priority of support for production and new model launches. Where contracts include clear pricing terms and adjustment mechanism, we strictly adhere to these terms.

Speaker #1: 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.

Speaker #1: In response . We've already put in place the following measures . First , we are strengthening supply chain collaboration to stabilize pricing while securing supply .

Speaker #1: 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 .

Speaker #1: 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 .

Speaker #1: We're continuing to work with key suppliers and to secure dedicated allocation , ensure priority support for production and new model launches . We're contracted to include clear , clear pricing terms and adjustment mechanism .

Speaker #1: We strictly adhere to these terms and where there is no such agreement , we work hand in hand with suppliers to share the cost , pressure and navigate the cycle together , aiming for mutual benefits in the long term .

[Company Representative] (Li Auto Inc.): Where there is no such agreement, we work hand in hand with suppliers to share the cost pressure and navigate the cycle together, aiming for mutual benefits in the long term. We'd like to sincerely thank all of our supply chain partners for their ongoing support for Li Auto. Secondly, we're driving end-to-end cost optimization in the meantime. We are identifying cost-saving opportunities across the entire value chain, from product to R&D, to manufacturing, logistics, cost, and 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.

[Translator]: Where there is no such agreement, we work hand in hand with suppliers to share the cost pressure and navigate the cycle together, aiming for mutual benefits in the long term. We'd like to sincerely thank all of our supply chain partners for their ongoing support for Li Auto. Secondly, we're driving end-to-end cost optimization in the meantime. We are identifying cost-saving opportunities across the entire value chain, from product to R&D, to manufacturing, logistics, cost, and 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.

Speaker #1: We'd like to sincerely thank all of our supply chain partners for their ongoing support for the auto. And secondly, we're driving end-to-end cost optimization.

Speaker #1: In the meantime , we're identifying cost saving opportunities across the entire value chain from products and to R&D to manufacturing , logistics and cost quality .

Speaker #1: 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.

[Company Representative] (Li Auto Inc.): Our in-house developed and manufactured range extender, electric drive units, power modules, self-developed and contract manufactured domain controllers, silicon carbide power chips, and 100 tons of 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.

[Translator]: Our in-house developed and manufactured range extender, electric drive units, power modules, self-developed and contract manufactured domain controllers, silicon carbide power chips, and 100 tons of 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.

Speaker #1: Our in-house developed and manufactured range extender , electric drive units , power modules , self-developed and contract manufacturers , domain controllers , silicon carbide power chips , and 100 autonomous driving chips and battery packs .

Speaker #1: 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 .

Speaker #1: Pricing will reflect a balanced consideration of raw materials volatility , R&D investments , and user value to ensure the healthy and sustainable profitability .

Speaker #1: Our goal is to bring gross margins of new products back to normal at A a healthy range . Overall , we're confident that by combining supply chain collaboration long term agreements that lock and key costs , platforms , proprietary technologies , and rational pricing , we can effectively contain the impact of raw material price increases with a manageable range and maintain stable gross margins and operational quality .

[Company Representative] (Li Auto Inc.): 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 gross margins and operational quality. Thank you.

[Translator]: 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 gross margins and operational quality. Thank you.

Speaker #1: Thank you .

Donghui Ma: Thank you very much.

Speaker #5: Thank you very much

Operator: Your next question comes from Jing Chang with CICC.

Speaker #2: Your next question comes from Jincheng with CI. CC.

Jing Chang: My first question is about in response to some recent media reports about the company's consideration of share buybacks. Could you please confirm if there are any related plans?

Speaker #6: Can You Hi . So my first question is about in response to a . Recently , we have heard about some media reports about the company's consideration of share buy backs .

Jing Chang: My first question is about in response to some recent media reports about the company's consideration of share buybacks. Could you please confirm if there are any related plans?

Speaker #6: So could you please confirm if there are any related plans

Johnny Tie Li: I think this is Johnny. I think this is not a media request about a media reporter at Weibo. As a dual primary listing company, both in US and Hong Kong Stock Exchange, we recognize that share buyback is one of the ways or tools we should consider for enhancing shareholder value. With respect to share repurchase, currently we don't have additional information need to disclose. Thank you.

Speaker #1: Yes .

Speaker #7: This is Tony. I think this is not a media report about the media reporter at Weibo. As a dual primary listing company, both in the US and Hong Kong Stock Exchange.

Speaker #7: We recognized that share buyback is one of the ways or tools we should consider for enhancing shareholder value . And with respect to share repurchase .

Speaker #7: Currently , we don't have any we don't have additional information need to be disclosed Thank you

Jing Chang: My second question is about R&D expense. What will be our guidance for the R&D expense in 2026? Also last year we spent almost half of our R&D related to intelligence or AI related areas. What is the portion guidance for this year?

Speaker #6: Thank you For The Second question is about R&D expenses . So what . 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 , intelligence , or AI related areas .

Speaker #6: So what is the proportion guidance for this year

Johnny Tie Li: Okay. Thanks for our question. This is also Johnny. We expect the R&D expenses this year to remain around RMB 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 the Li Auto AI project we invested in the last several years. Just to clarify, we don't see the automotive and AI as different, as 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. Thank you.

Speaker #7: Okay . Thanks for your question . This is also John . We expect the R&D expenses this year to remain around RMB 12 billion with our AI rated initiatives , accounting for about half of the cost .

Speaker #7: 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 in USA , in the last several years .

Speaker #7: Just to clarify , we don't see the automotive and 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 .

Speaker #7: Business model . We are monetize all the R&D investment through our current business model . It's not a separate business model

Operator: Your next question comes from Fei Xingyao with CITICS.

Speaker #2: Your next question comes from Fei with Scitex

Fei Xingyao: How to get one given what they want to get. They want to see it. Now one thing the woman is young, she is a good, she could be a good warrior. I love the name Daniel. How does she do to channel Popova? To show the how lonely to move how good it is. They want to have the game sheet. You give away like something when they get a good hand. My first question is about L series. Could you give us some details about L8 and L6 order sales, and especially about the ramping up production of L6? And how do you evaluate the Li standard, battery safety and its cost reduction contribution? Thank you.

Fei Xiang Gao: How to get one given what they want to get. They want to see it. Now one thing the woman is young, she is a good, she could be a good warrior. I love the name Daniel. How does she do to channel Popova? To show the how lonely to move how good it is. They want to have the game sheet. You give away like something when they get a good hand. My first question is about L series. Could you give us some details about L8 and L6 order sales, and especially about the ramping up production of L6? And how do you evaluate the Li standard, battery safety and its cost reduction contribution? Thank you.

Speaker #8: I And Liu , about The So my first question is about a series . So could you give us some details about AI and ethics ?

Speaker #8: Our sales and especially about the ramping up production of Essex and how do you evaluate similar tasks ? Better safety and its cost reduction contribution .

Speaker #8: Thank you

Donghui Ma: 我是马东辉，我来回答这个问题。理想 Li i6 去年七月份上市以来，随着用户使用里程的增加，在驾驶体验、能耗，还有智能化体验方面的口碑，是在持续的提升。现在的话，NPS 较上市初期增长超过了 20%。像春节期间我们的 5C 超充，还有 OTA 8.3 自驾的升级，都获得了用户高度的认可，NPS 也达到了历史最高。然后在杰兰路 2025 年下半年调研当中，理想 Li i6 也是在中大型 SUV 当中，NPS 排在第一。凭借良好的口碑，Li i6 的订单也在稳步回升。在三月份订单相比一月份同期提升了 180%，市场的需求持续向好。关于理想 Li 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。Li i6 的产品力也得到了充分的验证，凭借外观造型、空间、能耗，还有充电能力，精准地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解决。此前，电池供应的短期波动带来挑战。通过我们和核心供应商协同，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交付关怀政策。这里也特别感谢理想 Li i6 用户的理解和等待过程当中的坚守。后续我们 Li 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地交付。更重要的是，Li i6 的成功也证明了理想的品牌势能不仅仅是增程产品，也成功延伸到纯电的市场。关于电池的策略，我们始终坚持开放合作的战略，与行业头部的合作伙伴合作。但是，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，然后层层把控好品质。不管电池是哪一家，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，不会有任何差别。另外也想说一下，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，一个是宁德时代的品牌，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。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供应商决定的，而是由我们全栈自研的技术、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 Li i6.

Speaker #4: Oh, sure, the ISO should be the—I mean, the Ibamba and the know-how to the, the ideal now. Shipping, I should know—world, to the you, to the new.

Speaker #1: Now let me start with v I h . Since its launch in July last year , user satisfaction has continued to rise as owners accumulate miles on their vehicles and their .

[Company Representative] (Li Auto Inc.): 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 NPS of L8 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 LandRoads' second half of the 2025 survey, Li L8 ranked number one in NPS among all large SUVs. Fueled by the strong word-of-mouth, Li L8 orders have steadily rebounded. Daily orders in early March were up nearly 180% versus January. This clearly upward trend reflects strengthening market demand.

[Translator]: 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 NPS of L8 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 LandRoads' second half of the 2025 survey, Li L8 ranked number one in NPS among all large SUVs. Fueled by the strong word-of-mouth, Li L8 orders have steadily rebounded. Daily orders in early March were up nearly 180% versus January. This clearly upward trend reflects strengthening market demand.

Speaker #1: Satisfied . Particularly with the driving charging experience and . And autonomous driving , the NPS evaluate has risen by over 20% compared to the early post-launch period .

Speaker #1: During the Chinese New Year holiday . Our 5G ultra fast charging and OTA 8.3 autonomous driving upgrade received strong user acclaim , pushing NPS to an all time high in land roads .

Speaker #1: Second half of the 2025 survey via ranked number one in NPS . Among all large SUVs fueled by the strong word of mouth .

Speaker #1: Li I eight orders have steadily rebounded daily orders in early March were up threefold over threefold . Sorry , over nearly 180% versus January .

Speaker #1: This clearly upward trend reflects strengthening market demand . And now turning to Li six , we successfully moved past the most challenging phase of production ramp up .

Donghui Ma: 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 in battery supply, but we worked closely with our core suppliers to scale production capacity. We also introduced a purchase tax subsidy, and an extended care policy. I'd like to thank all of our Li L6 users for their understanding and patience.

Speaker #1: We are now in the stable delivery phase . Li six product strength has been thoroughly validated with its distinctive exterior design , spacious interior , efficient energy consumption , and agile handling .

Speaker #1: It precisely meets the needs of young families . It experienced strong order momentum since launch , and at the same time , all its supply chain bottlenecks have now been fully resolved .

Speaker #1: We used to face short term volatility and battery supply , but we work closely with our core suppliers to scale production capacity . We also introduced a purchase tax subsidy and extended care policy .

Speaker #1: I'd like to thank all of our lead L6 users for their understanding and patience . We expect Li L6 to sustain a steadily a steady monthly sales of around 20,000 units , and we're on track to efficiently deliver the current order backlog within the next 1 or 2 months .

Donghui Ma: We expect Li 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 1 or 2 months. Most importantly, Li L6's success clearly shows that Li Auto's brand appeal has successfully extended from the EREV segment into the BEV segment.

Speaker #1: Most importantly , Lea L6 success clearly shows that Li Auto's brand appeal has successfully extended from the era segment into the best segment .

[Company Representative] (Li Auto Inc.): Moving on to our battery strategy, 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 led battery architecture design and rigorously control quality at every step. Regardless of which partner supplies the cell, all batteries must meet Li Auto's unified Li standard for performance, quality, and safety. To the user, the experience is identical. There are no differences whatsoever. Additionally, starting in 2026, all Li Auto vehicles will be equipped with batteries from only two brands, Li 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.

[Translator]: Moving on to our battery strategy, 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 led battery architecture design and rigorously control quality at every step. Regardless of which partner supplies the cell, all batteries must meet Li Auto's unified Li standard for performance, quality, and safety. To the user, the experience is identical. There are no differences whatsoever. Additionally, starting in 2026, all Li Auto vehicles will be equipped with batteries from only two brands, Li 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.

Speaker #1: 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 of these partnerships when it comes to the vehicle performance .

Speaker #1: We let battery architecture , design and rigorously control quality at every step , regardless of which partner supplies the cells . All batteries must mean Li Auto Inc. unified Li standard for performance , quality and safety to the user .

Speaker #1: 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 Li auto Brand and Catl .

Speaker #1: This marks a deeper level of integration with our core partners . We ask for your continued trust in the V 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 .

[Company Representative] (Li Auto Inc.): 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.

[Translator]: 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.

Speaker #1: Thank you

Fei Xingyao: 好的，谢谢管总。我第二个问题是关于自研芯片M100的。那能不能给我们介绍一下这款芯片它的未来的量产时间，以及呢在哪些方面能够实现一个降本增效的目的。除外的话，我们是应该如何理解公司的一个软硬件一体，以及在什么时候能够看到车企之间的一个差异，因为软硬件一体的一个布局。Uh, so my second question is about the in-house chip, M100.

Fei Xiang Gao: 好的，谢谢管总。我第二个问题是关于自研芯片M100的。那能不能给我们介绍一下这款芯片它的未来的量产时间，以及呢在哪些方面能够实现一个降本增效的目的。除外的话，我们是应该如何理解公司的一个软硬件一体，以及在什么时候能够看到车企之间的一个差异，因为软硬件一体的一个布局。Uh, so my second question is about the in-house chip, M100.

Speaker #8: You . By the 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 the mass production timelines and where can we see the cost savings and efficiency gains .

Fei Xingyao: Could you give us more colors about this chip, such as mass production timelines, and where can we see the cost savings and efficiency gains? In addition, how should we understand the company's software and hardware integration? When will we see the gap between different automakers because of this integration? That's all. Thank you.

Fei Xiang Gao: Could you give us more colors about this chip, such as mass production timelines, and where can we see the cost savings and efficiency gains? In addition, how should we understand the company's software and hardware integration? When will we see the gap between different automakers because of this integration? That's all. Thank you.

Speaker #8: In addition , how should we understand the company's software and hardware integration And we will see the gap between different automakers because of this integration .

Speaker #8: That's all . Thank you

Yan Xie: Okay. This is Yan Xie. Let me answer your question. M100 will deliver with L9, our new series, and we already started mass production. For M100 itself, with the same silicon area, M100 delivers significantly higher effective compute, giving our VLA algorithms much more design space. For example, we can run a VLA model with about 6 times the parameters and 10 times the compute of the previous generation, while still achieving higher frame rates and faster inference. More importantly, as our in-house models, compiler stack, and 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 gain 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.

Speaker #4: Okay .

Speaker #9: This is Yan . Let me answer your question and I'm with R9 , a new series . And we already started mass production .

Speaker #9: And for . M 100 itself with the same silicon area , M 100 delivers significantly higher effective compute , giving our VR algorithms much more design space .

Speaker #9: For example , we can run VRA model with about six times the parameters and ten times the compute of the previous generation . While still achieving higher frame rates and faster inference .

Speaker #9: More importantly , as our in-house models , compiler stack and operating system evolve together through co-design , we are beginning to unlock the real potential of a full self-developed autonomous driving stack .

Speaker #9: The performance gain we see today are important , but the bigger impact is that this system level integration with significantly accelerate how fast our autonomous driving capabilities improve over time .

Yan Xie: 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 Body System, enabling tighter coordination between autonomous driving, compute, computation, pre- and post-processing, and vehicle control. This shortens the end-to-end latency from sensor photon input to vehicle actuation to around 200 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 to expand them in the future. More, M100 also brings significant cost advantage. First, the BOM cost per chip is much lower than external solutions.

Speaker #9: 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 competition , pre and post processing , and vehicle control .

Speaker #9: This shortens the end-to-end latency from sensor photon input to vehicle actuation to around 200 to 300 milliseconds, directly improving the driving experience.

Speaker #9: 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 .

Speaker #9: Some of these capabilities will first appear on the new R9 , and we will continue expand them in the in the future . And and more .

Speaker #9: M100 also brings significant cost advantage . First , the Bom cost per chip is much lower than external solutions , and second , we removed the ECU controller used in the previous generation platform by replacing it with M100 .

Yan Xie: Second, we removed the XCU controller used in the previous generation platform. By replacing it with M100 combined with the Halo OS virtualization, we save over 1,000 RMB per vehicle. Third, thanks to our data flow architecture and co-design of model and chips, we achieve higher runtime efficiency today and maintain much greater headroom for future performance improvement. When we started developing our own chip in 2022, we believed that around 2025, the industry would move into a new phase where models, chips, and operating system 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 cellphone world. Once you achieve full stack hardware, software integration, the advantage becomes structural and it keeps widening. Thank you.

Speaker #9: Combined with the Halo OS virtualization , we save over 1000 RMB per vehicle . Third , thanks to our data flow architecture and co-design of model and chips , we achieve higher runtime efficiency today and maintain much greater headroom for future performance improvement .

Speaker #9: When we started developing our own chip in 2022 , we believe that around 2025 , the industry would move into a new phase where models , chips and operating systems have to be designed together .

Speaker #9: 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 cell phone world .

Speaker #9: Once you achieve full-stack hardware and software integration, the advantage becomes structural, and it keeps widening. Thank you.

Operator: Your next question comes from Tina Hou with Goldman Sachs.

Speaker #2: Your next question comes from Tina Howe with Goldman Sachs

Tina Hou: 感谢管总的时间。我这边第一个问题是关于具身智能的，想要请问一下公司接下来的一到两年，咱们具身智能的一个战略规划是怎么样的？以及产品的一个落地形态和节奏，包括比如说在汽车、Robotaxi和人形机器人之间，这些不同产品的一个战略优先级是怎么样的。Thanks for taking our question. So my first question is regarding embodied AI.

Speaker #10: You Champion the Robotaxi Thanks for taking my question . So my first question is regarding embodied AI . So for the next 1 to 2 years , wondering what's the strategic plan from Leonardo ?

Tina Hou: So for the next 1 to 2 years, wondering what's the strategic plan from Li Auto. What kind of products are we expect to see? 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 humanoid robot?

Speaker #10: What kind of products are you . Are we expected to see . And then also the progress or timeline of these products Also , in terms of the strategic priority , how do you how do you decide between EVs , robotaxi as well as humanoid robot

Li Xiang: 你好，我是李想。我觉得我们分两个方面、两个层面来看。我觉得第一个是在整个具身智能的完整的技术、垂直技术整合上，我们会100%的投入，因为我们认为整个具身智能在整个的系统级技术上是具备共性的，包含了端侧的推理的芯片，也包含了不同的模型，也包含了像操作系统，还有背后的整个的数据和训练体系。那我觉得这个其实是我们会全力以赴地投入的，并且认为这是所有具身智能最重要的基础。那另外其实在真正的商业和产品落地方面，我们会小心翼翼，会不断地进行探索。那在向更多的领域进行探索扩展的这种方式上，我们会以创业公司的方式来启动，包含我们的AI眼镜，包含我们的机器人项目。我们避免了大公司那种大手大脚的方式，而是选择真正的以创业公司、创业团队的方式，去孵化这样的产品。所以这是大概我们的一个策略。

Speaker #4: Should I Should Follow the The . The The . Xiang Li The AI Sure , I So . The

[Company Representative] (Li Auto Inc.): In terms of the embodied AI strategy, first of all, on a 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. 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, the 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.

[Translator]: In terms of the embodied AI strategy, first of all, on a 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. 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, the 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.

Speaker #1: So . In terms of the embodied AI strategy . First of all , on the technological and product front , we believe that there's a lot of commonality .

Speaker #1: Regardless of what kind of product . Physical product we're talking about . So this is an area where we will be investing heavily in because we believe that all these investments will be shared across different product shapes and forms .

Speaker #1: This includes the device size , inference chips , the 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 .

Speaker #1: We will be adopting a startup model in areas like AI glasses and robots . Instead of using a traditional large company approach , we invest heavily in in unverified direction .

[Company Representative] (Li Auto Inc.): Instead of using a traditional large company approach where we invest heavily in unverified direction, we will work more like a startup company to start these new initiatives and wade our way through.

[Translator]: Instead of using a traditional large company approach where we invest heavily in unverified direction, we will work more like a startup company to start these new initiatives and wade our way through.

Speaker #1: We will work more like a startup company to start these new initiatives and wade our way through.

Tina Hou: 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，咱们智驾的进展目前怎么样？My second question is regarding our R&D restructuring. Wondering if the restructuring has been completed. Also under the new structure, how is the progress regarding our autonomous driving?

Speaker #10: With On the 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

Li Xiang: 我觉得今年一月份我们组织发生了一个比较大的调整，最重要的是研发团队。从原来的这种硬件冷链的功能的定义的方式，划分成功能，变成了创造人，创造数字人和硅基人的这样的一个管理方式。我们把不同的专业进行了一个相似的领域的这样的一个划分。比如说一个数字人的脏器官，包含了心脏就是我们的芯片，也包含了我们的数据集，可能就像是肺，再来也包含了我们的操作系统，就像我们的神经。我们把这一类的团队放在一个大的体系下进行管理。连到另外第二个其实很重要的其实是脑系统。包含脑系统连接了感知，我们的预训练，后续链强化训练，还有基础的infrastructure。这样的整个脑系统的团队，我们会放在一起来管理。而且脑系统团队只能做这些，不能去碰真正的应用。就避免了一个本来应该变成一个很强的脑子，但非要长出来小小的手脚。另外一方面，其实跟今天OpenAI、xAI一样，有我们的软件的应用团队，我们自己内部因为有硬件和软件，所以我们称之为软件本体。它要构建一个系统级的agent，所以包含了背后的整个的软件的工具的开发，像MCP这种调用的协议，包括怎么来搭建agent，记忆系统，还有skills。而且它要跟我们的操作系统结合在一起。这样就能够真正地去完成任务去干活，而不是只是简单的对话，或给出一些文本上或者图片上的一些结果。我觉得这是我们的软件本体的这样的一个团队，而且我们对软件本体团队的要求是你要通过应用的改善，包括用好skills，用好记忆，也避免了过去的时候很多这个传统公司做AI的时候，每一个应用和每一个团队也都想去碰一碰，从训练啊，搞搞拉啊这些没什么用的东西，对吧？就避免了身体非得长点，长一些没用的那个脑子出来，效率很低的脑子出来。我觉得这是软件本体的部分。另外一方面，硬件也发生了很大的变化，归结成一个就是变成了专门为以后的巨生考虑的，完整的这样的一个硬件本底体系，包含很重要的能源体系，驱动体系，控制体系。包含这些体系不再是原来每一个单独的控制器去进行管理，而是我们现在已经开始通过用MCP，用这种模型直接通过MCP对所有的执行器进行控制这样一个方式。从而我们能够让团队真正地联合在一起，来打造不同的，就是跟以往的传统的硬件、软件所不同的，数字人、硅基人的这样的一个组织模式和研发模式上来。我觉得这是我们今年一月份做的很重要的一个变化。我们在做这个变化的时候，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。我们的支架的模型的整个的训练的效率，会从过去的时候基本上两周迭代一次，现在基本上变成了一天迭代一次。另外一方面，团队之间的协作也完全不一样。过去还有部门墙的各个团队，今天大家完全坐在一起，不用考虑你是你的，我是我的，大家真的坐在一起来协作。因为我们核心的目的，就是创造巨型智能，像人一样的去构建我们的研发体系，打造不同的产品。

Speaker #4: The Answer . Now The G o The CTO new Due to the infra And The MCP Agent skills Now To . To In-House .

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Speaker #4: The. The. The. Xiang Li, you.

[Company Representative] (Li Auto Inc.): We went through a major organization change in January, where we 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. In order to achieve this reorganization, we've basically reconnected across our businesses and regrouped the functions by the specific part of the human that they're responsible for, as opposed to previously dividing by the so-called business units or the product. This organization or the specialization happens in three areas. The first one is what we think of as brain. This includes like data sets, which is comparable to human lungs, and the chips, which is comparable to the heart and operating system compared to the neural system.

[Translator]: We went through a major organization change in January, where we 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. In order to achieve this reorganization, we've basically reconnected across our businesses and regrouped the functions by the specific part of the human that they're responsible for, as opposed to previously dividing by the so-called business units or the product. This organization or the specialization happens in three areas. The first one is what we think of as brain. This includes like data sets, which is comparable to human lungs, and the chips, which is comparable to the heart and operating system compared to the neural system.

Speaker #1: We went through a major organization . Change in January where we completely revamped our hardware and software functions and . All this has a shared goal , which is to build a silicon based digital human being or a smart human being .

Speaker #1: That's our overall goal . And in order to achieve this , we . We've basically reconnected across all of our businesses and regrouped this functions by the specific part of the human that they were responsible for .

Speaker #1: As opposed to previously dividing by the so-called business units or the product . So this organization or the , the specialization happens in three areas .

Speaker #1: The first one is what we think of as brain . And this includes 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 .

[Company Representative] (Li Auto Inc.): 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. 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. In our case, the brain 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. On top of the brain team, we have what we call the applications team, or in our language, we call it the core software team. This core software team includes software tools like MCP. They include teams that build agents, includes teams that focuses on skills, and teams that focus on memories.

[Translator]: 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. 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. In our case, the brain 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. On top of the brain team, we have what we call the applications team, or in our language, we call it the core software team. This core software team includes software tools like MCP. They include teams that build agents, includes teams that focuses on skills, and teams that focus on memories.

Speaker #1: 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 .

Speaker #1: And my rule for these teams is that they cannot touch applications , because in many companies , the fundamental research team are attempted to work on applications .

Speaker #1: But in our 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 .

Speaker #1: And then on top of the brain team , we have what we call the applications team or in our language , we call it the the core software team .

Speaker #1: This core software team includes software tools like MCP . They include teams that build agents , includes teams that focuses on skills and teams that focus on memories .

[Company Representative] (Li Auto Inc.): All this, 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. It can actually strategize and execute a task given a human being. Everything I mentioned above is software, which includes skills, memories. Again, here we avoid the temptation 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. This team focuses mostly on the body, the applications. Then finally, we have the hardware team.

[Translator]: All this, 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. It can actually strategize and execute a task given a human being. Everything I mentioned above is software, which includes skills, memories. Again, here we avoid the temptation 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. This team focuses mostly on the body, the applications. Then finally, we have the hardware team.

Speaker #1: And all this . 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 .

Speaker #1: As opposed to just become a conversational robot . So it can actually it can actually strategize and execute tasks that are given by human beings .

Speaker #1: And then so everything I mentioned above is a software which includes skills , memories , and again , here we avoid the teams to the temptation to , to want to build their own brains .

Speaker #1: 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.

Speaker #1: So this team focuses mostly on the body , the applications , and then finally we have the hardware team . This is about building dedicated hardware for AI , for embodied AI , which includes an energy team and electric drive team , and the controller's team .

[Company Representative] (Li Auto Inc.): This is about building dedicated hardware for AI, for embodied AI, which includes an energy team, an electric drive team, and a controllers team. When I say controllers teams, we don't necessarily use actual controllers like the ones seen in automobiles in the past, because 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 makes them a lot more intelligent and more efficient.

[Translator]: This is about building dedicated hardware for AI, for embodied AI, which includes an energy team, an electric drive team, and a controllers team. When I say controllers teams, we don't necessarily use actual controllers like the ones seen in automobiles in the past, because 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 makes them a lot more intelligent and more efficient.

Speaker #1: And when I say controller teams , we don't necessarily use actual controllers like the ones seen in automobiles in the past because we've now we're now working with a model where we build MCP for the different components so that the large model can directly talk to these MCP and control these different components , which is which makes them a lot more intelligent and more efficient .

[Company Representative] (Li Auto Inc.): 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. That's how we can deliver products that are also differentiated from the traditional products. After we've made this reorg, many people at the beginning didn't understand why we were making this change. 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 iteration every one day, which is a 14-time improvement. 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 you will see very soon.

[Translator]: 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. That's how we can deliver products that are also differentiated from the traditional products. After we've made this reorg, many people at the beginning didn't understand why we were making this change. 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 iteration every one day, which is a 14-time improvement. 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 you will see very soon.

Speaker #1: 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 other's work , as opposed to the silos that you see with the traditional models .

Speaker #1: 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 .

Speaker #1: 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 .

Speaker #1: 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 , this is partly thanks to the collaboration across different teams .

Speaker #1: They're 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 and embodied AI that we will see very

Li Xiang: 我觉得我再补充一下，因为我觉得今年年初，大家也能看到一些变化，就是在过去的五到十年里面，我们的一些非常优秀的研发方面的管理者一号位、二号位，由于他们过去在跟着理想汽车，经历了一个非常重要的从零开始的这样一个阶段，有了一个丰富的创业公司的经验。所以呢，我们也可以看到，其实有一些我们的核心骨干出去创业，也非常好的获得了投资市场的一个认可。那我觉得这个一方面我们恭喜这些我们自己的核心骨干，成为了受市场欢迎的创业者，我希望每一个能够出去自己创业的理想汽车的骨干都能够表现得越来越好，成为市场的主力，市场竞争的主力。我觉得另外一方面，在公司内部也真正给了一些年轻的技术管理者和业务管理者非常好的机会。所以呢，无论是自动驾驶模型，还是无人机，还是我们的产品线，无论是业务的一号位，还是下边的核心的管理团队，我们这一波在大量的出现了九零后、九五后来胜任一号位的这样的角色。那这个也给整个的团队往未来的时间去看，构建了一个坚实的人才的基础和一个非常强劲的动力。那我觉得这个对理想汽车而言是一个非常好的双赢的局面，作为一个新的时间的一个开始。那所以呢，我也跟所有的朋友说一下，就是大家可以放心，我们新一代的年轻的管理团队，能够非常好的接任他们上一任所构建的这样一个良好的基础，并在未来的十年去迎接更大的挑战，尤其是一些最关键的技术和最核心的能力方面。我们也能看到，在我们的技术研究团队里边，除了九五后已经开始胜任一号位以外，我们过去三年培养的校招生，大量的零零后也成为了我们的新的论文，以及最难的、写的一些技术方案的核心骨干，这是我们对未来的十年充满信心的最重要的标志。

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[Company Representative] (Li Auto Inc.): 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 Li Auto, in a startup mode, and they've been very well received by the investment community, and many of them have had major funding, and as we've seen on the news already. First of all, I wanted to congratulate these former colleagues for getting good reception in the market, not just funding, but also overall reception. I really wish all of you good luck to compete in your respective markets and wish your business to develop well, and for you to have a success in your new venture. 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, in foundation models, vehicle product lines, and embodied AI. It has enabled new leaders in these areas, many were born after 1990 or 1995, to really take the spot and take the burden. We are starting to see a full bench of very talented and motivated colleagues, which is prepping the company really for the next decade. I believe this overall is really a win-win situation for us and our employees. Really ready us for the new decade of development.

[Translator]: 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 Li Auto, in a startup mode, and they've been very well received by the investment community, and many of them have had major funding, and as we've seen on the news already. First of all, I wanted to congratulate these former colleagues for getting good reception in the market, not just funding, but also overall reception. I really wish all of you good luck to compete in your respective markets and wish your business to develop well, and for you to have a success in your new venture. 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, in foundation models, vehicle product lines, and embodied AI. It has enabled new leaders in these areas, many were born after 1990 or 1995, to really take the spot and take the burden. We are starting to see a full bench of very talented and motivated colleagues, which is prepping the company really for the next decade. I believe this overall is really a win-win situation for us and our employees. Really ready us for the new decade of development.

Speaker #1: There's one important thing that I want to add in the . Around the beginning of this year , we've seen many important managers , especially in the R&D field .

Speaker #1: 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 .

Speaker #1: These leaders , in many cases , the first in line of their business , they went through the entire 0 to 1 cycle with Li Auto in the startup mode , and they've been very well received by the investment community .

Speaker #1: As many of them have had major funding and as we've seen on the news already , so first of all , I wanted to congratulate these former colleagues for getting good reception in the in the market , not just funding , but also overall reception .

Speaker #1: 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 .

Speaker #1: It has enabled many of our young leaders across technology, in business units and foundation product vehicle, product lines, and embodied AI.

Speaker #1: It has embodied new enabled , new leaders in these areas of . Many who were born after 1990 or 1995 . To really take the spot and take the burden and they're really we are starting to see a full bench of very talented and motivated colleagues , which is prepping the company really for the next decade .

Speaker #1: I believe this overall is really a win-win situation for us and our employees, and really readies us for the new wave of development.

[Company Representative] (Li Auto Inc.): 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 yielded some really, really good results, especially in some key technical areas, including some of the thesis, and key research problems. Our post-95 generation has made a major contribution, and even some newly fresh college graduates, many of them were born after the year 2000. They've made some major contributions to our products, to our technology, and are at the forefront of our research, R&D.

[Translator]: 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 yielded some really, really good results, especially in some key technical areas, including some of the thesis, and key research problems. Our post-95 generation has made a major contribution, and even some newly fresh college graduates, many of them were born after the year 2000. They've made some major contributions to our products, to our technology, and are at the forefront of our research, R&D.

Speaker #1: 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.

Speaker #1: And they're building on the solid foundation that's built by their predecessors and have yielded some really , really good results , especially in some key technical areas for including some of the .

Speaker #1: Thesis and key research problems are post 95 generation has made a major contribution , and even some newly fresh graduate college graduates , many of them were born after the year 2000 .

Speaker #1: They made some major contributions to our products , to our technology and our and are at the forefront of our research and R&D .

[Company Representative] (Li Auto Inc.): This is really exciting time, and I'm really excited to see all this and also that makes me very confident about the next decade that's to come. Thank you.

[Translator]: This is really exciting time, and I'm really excited to see all this and also that makes me very confident about the next decade that's to come. Thank you.

Speaker #1: So this is really exciting time and really excited to see all this . And also that makes me very confident about the next decade that's to come .

Speaker #1: Thank you

Operator: 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 Zeng, please go ahead.

Speaker #2: 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 .

Speaker #2: Miss Janet Chang , please go ahead .

Shannon Zeng: Thank you once again for joining us today. If you have further questions, please feel free to contact Li Auto'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.

Janet Chang: Thank you once again for joining us today. If you have further questions, please feel free to contact Li Auto'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.

Speaker #11: Thank you . Once again for joining us today . If you have further questions , please feel free to contact Li Auto Inc. investor Relations team through the contact information provided on our .

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