BEIJING, February 28 (TMTPost)-- Li Auto Inc., one of China’s most high-profile electric vehicle (EV) startups, vowed not to target low-and-medium-cost models in the near term.

Credit：Visual China

In the coming five years, Li Auto has no plans to launch any vehicles below the RMB 200,000 price point, because the segment priced more than RMB 200,000 is a “huge gold mine we think we've only mined a very, very small portion”, said the president Ma Donghui at an earnings conference. Ma noted if Li Auto were able to take one-third of the segment in China for family users by 2030, even if it only focused on the market, it would generate total more than RMB 1 trillion, and if one takes into account of overseas by 2030, this market will create a business close to the revenue of all iPhones sold worldwide combined. That’s why Li Auto would like to focus exclusively on the over RMB200,000 segment globally and feels there is no need to distract itselfat this point, Ma said. He added Li Auto’s strategy is to continue to dive deep into this market, create a brand, and expand its market share.

Li Auto posted stronger-than-expected sales for the final quarter last year despite ongoing price war in the whole industry. The total revenue that quarter increased 136.4% year-over-year (YoY) to RMB41.73 billion (US$5.88 billion), better than Wall Street estimated RMB39.8 billion. The net income soared 2,068.2% YoY to RMB57.5 billion that quarter, and non-GAAP net income was RMB4.59 billion, up 374.2%. Gross profit was RMB9.79 billion, representing a 174.4% YoY increase, and gross margin increased to 23.5%, up from 20.2% a year earlier. For the year 2024, Li Auto first achieved profitability in a year, the first of the the major Chinese EV startups to turn a profit in a full year. It recorded net income of RMB11.81 billion, compared with net loss of RMB2.03 billion in 2022. The bottom line was way above expectation of RMB8.91 billion. .The annual revenue surged 173.5% YoY to RMB123.85 billion, and RMB120.29 out of them came from vehicle sales with a YoY growth of 172.7%.

Li Auto attributed growth of vehicle sales in the fourth quarter to increase in delivery, partially offset by the lower average selling price due to different product mix between two quarters. The robust growth fo net income that quarter was partially due to non-cash tax benefit of RMB1.99 billion for the release of valuation allowance on certain deferred tax assets.

Li Auto reached another significant milestone of 50,000 monthly deliveries, setting a new record for Chinese premium car brands. According to China Automotive Technology and Research Centers insurance registration data, in China's NEV market of RMB 200,000 and higher, Li Auto's market share increased from 10.9% in Q1 2023 to 16% in Q4, making us a leading Chinese automotive brand by market share. The CEO Li Xiang said the growth will continue in 2024.

2024 will be an unprecedented year of new product launches for Li Auto, beginning in March with the launch of LI MEGA, the company’s high-tech flagship and family NPV, Li told analysts at the earnings call. Li said Li Auto will be unveiling vehicles about Li MEGA and its 2024 model year L Series at the Li Auto 2024 Spring product launch event this Friday, March 1, and plans to begin mass delivery of 2024 model year Li L7, L8, and L9 models starting in March. Furthermore, the company will introduce several new models over the course of the year, including Li L6, to broaden its product lineup even further. By the end of 2024, Li Auto will have eight models on the market, featuring four EREVs and four BEV, forming a highly competitive product matrix and satisfying the diverse needs of our family users.

According to Li, vehicle launches are only the starting point. Since the initial delivery of L Series, Li Auto has released over 20 over-the-year updates, operating over 700 features and the latest official release of OTA 5.0 upgrades last December further enhanced product competitiveness of its vehicles. With the latest release of AD Max 3.0, full-scenario NOA now covers all highways and city ring roads nationwide, as well as urban roads across over 110 cities. Li Auto anticipates to offer City NOA independent of HD maps in all of China by the end of the second quarter this year, and it will be delivered to all AD Max vehicles by NOA. Its users have accumulated around 560 million kilometers on NOA during the 10-day Chinese New Year holiday from February 8th to 17th.