Shanghai (ZXZC)- Li Auto Inc., a prominent player in China's new energy vehicle sector, has released its unaudited financial results for the first quarter of 2024 (Q1 2024).

The company reported total revenues of 25.6 billion yuan (US$3.6 billion) for Q1 2024, marking a substantial 36.4% increase from the prior-year period, but representing a 38.6% slump from the previous quarter (Q4 2023).

Li Auto's vehicle sales revenue reached 24.3 billion yuan (US$3.4 billion) in Q1 2024, up 32.3% from the previous year. This growth was driven primarily by a rise in vehicle deliveries, though it was somewhat offset by a lower average selling price due to changes in product mix and pricing strategies. Compared to Q4 2023, the vehicle sales revenue fell by 39.9%, primarily due to a seasonal drop in deliveries influenced by the Chinese New Year holiday and lower-than-expected order intake in March.

Li Auto delivered a total of 80,400 vehicles in Q1 2024, reflecting a 52.9% surge compared to the same period last year.

In Q1 2024, Li Auto's gross profit reached 5.3 billion yuan (US$731.9 million), marking a 38% jump year-on-year, but showing a 46% plunge quarter-on-quarter.

Li L6; photo credit: Li Auto

The gross margin for Q1 2024 was 20.6%, slightly up from the 20.4% in Q1 2023 but down from the 23.5% in Q4 2023. The stability in gross margin compared to Q1 2023 contrasts with the drop from Q4 2023, which was primarily due to a decrease in vehicle margin.

The company's vehicle margin in Q1 2024 was 19.3%, compared to the 19.8% in Q1 2023 and the 22.7% in Q4 2023. The quarter-on-quarter decrease was mainly attributed to lower average selling prices following pricing strategy adjustments in Q1 2024 and warranty reserve true-up adjustments in Q4 2023 based on updated cost estimates for future claims.

Li Auto reported a loss from operations amounting to 584.9 million yuan (US$81.0 million) in Q1 2024, a significant shift from the 405.2 million-yuan operation income in Q1 2023 and the 3 billion-yuan operation income in Q4 2023. The operating margin was negative 2.3% for Q1 2024, compared to the 2.2% in Q1 2023 and the 7.3% in Q4 2023. On a non-GAAP basis, the income from operations was 100.3 million yuan (US$13.9 million), representing an 88.7% slump from a year earlier and a 97.4% plunge from the previous quarter.

The company also reported R&D expenses of 3 billion yuan (US$422.3 million) for Q1 2024, marking a 64.6% leap over a year ago. This increase is attributed primarily to higher employee compensation due to an expanded workforce and increased spending to support a broader range of products and technologies. Compared to Q4 2023, its R&D expenses decreased by 12.7%, aligning with the timing and progress of new vehicle programs.

By April 30, 2024, Li Auto's sales and service network had established a significant presence in China, operating 481 retail stores across 144 cities, 361 servicing centers and authorized body & paint shops in 210 cities, and 386 supercharging stations equipped with 1,678 charging stalls.

Looking ahead to the second quarter of 2024, Li Auto anticipates vehicle deliveries between 105,000 units and 110,000 units, reflecting a year-over-year increase of 21.3% to 27.1%. The company also projects total revenues between 29.9 billion yuan (US$4.1 billion) and 31.4 billion yuan (US$4.3 billion), representing a 4.2% to 9.4% increase compared to the year-ago period.