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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to

OR

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission File Number: 001-39407

Li Auto Inc.

(Exact Name of Registrant as Specified in Its Charter)

N/A

(Translation of Registrant’s Name into English)

Cayman Islands

(Jurisdiction of Incorporation or Organization)

11 Wenliang Street

Shunyi District, Beijing 101399

People’s Republic of China

(Address of Principal Executive Offices)

Tie Li, Chief Financial Officer

Telephone: +86 (10) 8742-7209

Email: ir@lixiang.com

11 Wenliang Street

Shunyi District, Beijing 101399

People’s Republic of China

(Name, Telephone, Email and/or Facsimile Number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class

    

Trading Symbol

    

Name of Each Exchange on Which Registered

American depositary shares, each representing two Class A ordinary shares, par value US$0.0001 per share

Class A ordinary shares, par value US$0.0001 per share

LI

2015

The Nasdaq Stock Market LLC
(The Nasdaq Global Select Market)
The Stock Exchange of Hong Kong Limited

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

1,738,408,250 Class A ordinary shares (excluding the 27,799,938 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our share incentive plans), par value US$0.0001 per share, and 355,812,080 Class B ordinary shares, par value US$0.0001 per share, as of December 31, 2023.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

    Yes        No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

    Yes        No

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

    Yes        No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

    Yes        No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer

Accelerated Filer

Non-Accelerated Filer

Emerging Growth Company

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.

The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP

International Financial Reporting Standards as issued by the International Accounting Standards Board

Other

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

    Item 17        Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

    Yes        No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

    Yes        No

TABLE OF CONTENTS

INTRODUCTION

ii

FORWARD-LOOKING INFORMATION

iv

PART I.

1

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

1

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

1

ITEM 3.

KEY INFORMATION

1

ITEM 4.

INFORMATION ON THE COMPANY

68

ITEM 4A.

UNRESOLVED STAFF COMMENTS

104

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

104

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

119

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

131

ITEM 8.

FINANCIAL INFORMATION

133

ITEM 9.

THE OFFER AND LISTING

134

ITEM 10.

ADDITIONAL INFORMATION

134

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

145

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

146

PART II.

149

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

149

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

149

ITEM 15.

CONTROLS AND PROCEDURES

150

ITEM 16.

[RESERVED]

150

ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT

150

ITEM 16B.

CODE OF ETHICS

151

ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

151

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

151

ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

151

ITEM 16F.

CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

151

ITEM 16G.

CORPORATE GOVERNANCE

152

ITEM 16H.

MINE SAFETY DISCLOSURE

152

ITEM 16I.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

152

ITEM 16J.

INSIDER TRADING POLICIES

152

ITEM 16K.

CYBERSECURITY

152

PART III.

154

ITEM 17.

FINANCIAL STATEMENTS

154

ITEM 18.

FINANCIAL STATEMENTS

154

ITEM 19.

EXHIBITS

155

i

INTRODUCTION

In this annual report, unless otherwise indicated or unless the context otherwise requires:

“ADRs” refers to the American depositary receipts that evidence the ADSs;
“ADSs” refers to the American depositary shares, each of which represents two Class A ordinary shares of our company;
“CCASS” refers to the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited;
“China” or “PRC” refers to the People’s Republic of China, and, unless the context requires otherwise and solely for the purpose of this annual report such as describing legal or tax matters, authorities, entities, or persons, excludes Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan region of the People’s Republic of China;
“Class A ordinary shares” refers to the Class A ordinary shares of Li Auto Inc. with a par value of US$0.0001 per share;
“Class B ordinary shares” refers to the Class B ordinary shares of Li Auto Inc. with a par value of US$0.0001 per share;
“FOTA” refers to firmware over-the-air, a technology that updates vehicle firmware and software remotely through cloud network;
“Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China;
“Hong Kong dollars” or “HK$” refers to the legal currency of Hong Kong;
“Hong Kong Listing Rules” refers to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended or supplemented from time to time;
“Hong Kong Stock Exchange” refers to The Stock Exchange of Hong Kong Limited;
“HPC” refers to high-power charging;
“ICE” refers to internal combustion engine;
“Li Auto,” “we,” or “our company” refers to Li Auto Inc., a Cayman Islands holding company, and its subsidiaries and, in the context of describing our operations and consolidated financial information, the VIEs and their respective subsidiaries, unless otherwise indicated herein. For the avoidance of confusion, “Li Auto Inc.” or “our holding company” only refers to Li Auto Inc.; “our subsidiaries” refers to the entities in which Li Auto Inc. holds direct or indirect equity ownership, and thus consolidates their financial information; for “variable interest entities” or “VIEs,” see stand-alone definition set forth below. Li Auto Inc. does not conduct operations of its own and does not have any equity ownership in the VIEs;
“Main Board” refers to the stock market (excluding the option market) operated by the Hong Kong Stock Exchange, which is independent from and operated in parallel with the Growth Enterprise Market of the Hong Kong Stock Exchange;
“Meituan” refers to Meituan, formerly known as Meituan Dianping, a company incorporated in the Cayman Islands and listed on the Main Board of the Hong Kong Stock Exchange;
“MPVs” refers to multi-purpose vehicle;

ii

“NEVs” refers to new energy passenger vehicles, primarily including (i) “BEVs,” which refers to battery electric passenger vehicles, (ii) “EREVs,” which refers to extended-range electric passenger vehicles, and (iii) “PHEVs,” which refers to plug-in hybrid electric passenger vehicles;
“NOA” refers to navigation on advanced driver-assistance systems;
“ordinary shares” or “shares” refers to the Class A ordinary shares and Class B ordinary shares;
“PCAOB” refers to Public Company Accounting Oversight Board, a nonprofit corporation established by the United States Congress to oversee the audits of public companies, among others;
“Renminbi” or “RMB” refers to the legal currency of China;
“SEC” refers to the United States Securities and Exchange Commission;
“SUVs” refers to sport utility vehicles;
“U.S. dollars” or “US$” refers to the legal currency of the United States; and
“VIEs” refers to variable interest entities, which are PRC companies conducting business operations in China that have entered into a series of contractual arrangements with their respective shareholders and our PRC subsidiaries and whose financial information has been consolidated into the consolidated financial statements of Li Auto Inc. under U.S. GAAP for accounting purposes; and “the VIEs” that Li Auto Inc. consolidates under U.S. GAAP include Beijing CHJ Information Technology Co., Ltd., or Beijing CHJ, and Beijing Xindian Transport Information Technology Co., Ltd., or Xindian Information.

Any discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.

Our reporting currency is Renminbi. This annual report contains translations from Renminbi to U.S. dollars solely for the convenience of the reader. Unless otherwise stated, all translations from Renminbi to U.S. dollars were made at a rate of RMB7.0999 to US$1.00, which was the exchange rate in effect as of December 29, 2023 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. The exchange rate in effect as of April 5, 2024 was RMB7.2339 to US$1.00. We make no representation that any Renminbi amounts referred to in this annual report could have been, or could be, converted into U.S. dollars at any particular rate, or at all.

iii

FORWARD-LOOKING INFORMATION

This annual report contains forward-looking statements that reflect our current expectations and views of future events. The forward-looking statements are contained principally in “Item 3. Key Information—D. Risk Factors,” “Item 4. Information on the Company—B. Business Overview,” and “Item 5. Operating and Financial Review and Prospects.” These forward-looking statements are made under the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Known and unknown risks, uncertainties and other factors, including those listed under “Item 3. Key Information—D. Risk Factors,” may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements.

You can identify some of these forward-looking statements by words or phrases such as “may,” “might,” “will,” “would,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue,” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These forward-looking statements include statements relating to:

our goals and strategies;
our future business development, financial conditions, and results of operations;
the expected outlook of the automotive market including the NEV market in China;
our expectations regarding demand for and market acceptance of our products;
our expectations regarding our relationships with users, suppliers, third-party service providers, strategic partners, and other stakeholders;
competition in our industry;
government policies and regulations relating to our industry; and
general economic and business conditions globally and in China.

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations are generally set forth in “Item 3. Key Information—D. Risk Factors,” “Item 4. Information on the Company—B. Business Overview,” “Item 5. Operating and Financial Review and Prospects,” and other sections in this annual report. You should read thoroughly this annual report and the documents that we refer to with the understanding that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements.

iv

PART I.

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.

KEY INFORMATION

Our Holding Company Structure and Contractual Arrangements with the VIEs and Their Shareholders

The following diagram illustrates our corporate structure, including our principal subsidiaries and the VIEs, as of the date of this annual report.

Graphic

1

Li Auto Inc. is not a Chinese operating company but a Cayman Islands holding company with no equity ownership in the VIEs and their subsidiaries. We conduct our operations in China through (i) our PRC subsidiaries and (ii) the VIEs, with which we have maintained contractual arrangements, and their subsidiaries. PRC laws and regulations restrict and impose conditions on foreign investment in value-added telecommunication services and certain other businesses. Accordingly, we operate these businesses in China through the VIEs and their subsidiaries, and rely on contractual arrangements among our PRC subsidiaries, the VIEs, and their nominee shareholders to direct the business operations of the VIEs. Such structure enables investors to share economic interests in China-based companies in sectors where foreign direct investment is prohibited or restricted under PRC laws and regulations. Revenues contributed by the VIEs accounted for 23.3%, nil, and nil of our total revenues in 2021, 2022, and 2023, respectively. As used in this annual report, “Li Auto,” “we,” or “our company” refers to Li Auto Inc., its subsidiaries, and, in the context of describing the operations conducted through our PRC subsidiaries and the VIEs and consolidated financial information, the VIEs in China, including but not limited to Beijing CHJ and Xindian Information. Investors in the ADSs are not purchasing equity interest in the VIEs in China but instead are purchasing equity interest in a holding company incorporated in the Cayman Islands, and may never directly hold equity interests in the VIEs in China.

A series of contractual agreements, including powers of attorney, business operation agreement, equity pledge agreements, exclusive consultation and service agreements, and equity option agreements, have been entered into by and among our PRC subsidiaries, the VIEs, and their nominee shareholders. Terms contained in each set of these contractual arrangements are substantially similar. As a result of the contractual arrangements, we (i) have the power to direct activities of the VIEs that most significantly affect their economic performance and (ii) receive economic benefits from the VIEs that could be significant to them. Accordingly, Li Auto Inc. is considered the primary beneficiary of the VIEs and their subsidiaries and has consolidated the financial information of these companies in its consolidated financial statements under the U.S. GAAP for accounting purposes. Neither Li Auto Inc. nor its investors have an equity ownership (including foreign direct investment) in, or control through such equity ownership of, the VIEs, and the contractual arrangements are not equivalent to an equity ownership in the business of the VIEs. For more details of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with the VIEs and Their Shareholders.”

However, the contractual arrangements may not be as effective as direct ownership in providing us with control over the VIEs and their subsidiaries; the nominee shareholders of the VIEs may have potential conflicts of interest with us; and we may incur substantial costs to enforce the terms of the arrangements. As such, the VIE structure involves unique risks to investors of our Cayman Islands holding company. In addition, the legality and enforceability of the contractual agreements between our PRC subsidiaries, the VIEs, and their nominee shareholders, as a whole, have not been tested in a court of law in China. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—We rely on contractual arrangements with the VIEs and their respective shareholders to maintain a controlling financial interest in the VIEs, which may not be as effective as direct ownership in providing operational control.” and “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—The registered shareholders of the VIEs may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.”

There are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the VIEs and their nominee shareholders. It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or, if adopted, what they would provide. If we or any of the VIEs is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required licenses, permits, registrations, or approvals, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures in accordance with applicable laws. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations,” and “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—The interpretation and implementation of the PRC Foreign Investment Law and its implementation rules are evolving, and we cannot fully ascertain how they may impact the viability of our current corporate structure, corporate governance, and operations.”

2

Our corporate structure is subject to risks associated with our contractual arrangements with the VIEs. If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. Our holding company, our PRC subsidiaries, and the VIEs and their subsidiaries, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company as a whole. The PRC regulatory authorities could disallow the VIE structure, which would likely result in a material change in our operations and cause the value of our securities to significantly decline or become worthless. For a detailed description of the risks associated with our corporate structure, please refer to risks disclosed under “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure.”

We face various legal and operational risks and uncertainties relating to doing business in China. Our business operations are primarily conducted in China, and we are subject to complex and evolving PRC laws and regulations. The PRC government has issued statements and carried out regulatory actions relating to areas such as the use of contractual arrangements in certain industries, regulatory approvals on offshore offerings and listings by, and foreign investment in, China-based issuers, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy. We cannot assure you that we will be able to complete filing or obtain any specific regulatory approvals from the China Securities Regulatory Commission, or the CSRC, the Cyberspace Administration of China, or the CAC, or any other PRC government authorities for our overseas offerings and listings, as applicable. In addition, if future regulatory updates mandate clearance of cybersecurity review or other specific actions to be completed by China-based companies listed on foreign stock exchanges, such as us, we face uncertainties as to whether such clearance can be timely obtained, or at all. Therefore, we face risks and uncertainties associated with these statements and regulatory actions, which may impact our ability to conduct certain businesses, accept foreign investments, or list and conduct offerings on a United States or another foreign exchange. These risks could result in a material adverse change in our operations and the value of the ADSs, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of such securities to significantly decline. For a detailed description of risks relating to doing business in China, see “Item 3. Key Information—D.Risk Factors—Risks Relating to Doing Business in China.”

The PRC government’s significant authority in regulating our industry and operations and its oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors. Implementation of industry-wide regulations in this nature may cause the value of such securities to significantly decline. For more details, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—The PRC government’s oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.”

The progressive development of the legal system in China, including such regarding the enforcement and sometimes quick changes of PRC rules and regulations, could result in uncertainties that adversely affect our operations and the value of our Class A ordinary shares and the ADSs. For more details, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—The PRC legal system is developing, which could lead to uncertainties that adversely affect us.”

The Holding Foreign Companies Accountable Act

Pursuant to the Holding Foreign Companies Accountable Act, or the HFCAA, as amended by the Consolidated Appropriations Act, 2023, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States. On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, including our auditor. In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. For this reason, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2022 and do not expect to be so identified after we file this annual report on Form 20-F.

3

Each year, the PCAOB will determine whether it can inspect and investigate completely registered public accounting firms in mainland China and Hong Kong, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely registered public accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCAA. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past had deprived our investors with the benefits of such inspections” and “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely registered public accounting firms located in mainland China and Hong Kong. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.”

Permissions Required from the PRC Authorities for Our Operations

We conduct our business primarily through our subsidiaries and the VIEs in China. Our operations in China are governed by PRC laws and regulations. As of the date of this annual report, our PRC subsidiaries and the VIEs and their subsidiaries have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our subsidiaries and the VIEs and their subsidiaries in China, including, among others, a Survey and Mapping Qualification Certificate, a Value-Added Telecommunication Business Operating License for Internet Information Service, or ICP License, a Value-Added Telecommunication Business Operating License for Information Service (excluding internet information service), and an Operating License for the Production and Dissemination of Radio and Television Programs. Given the evolving interpretation and implementation of relevant laws and regulations and the evolving enforcement practices of the government authorities, we may be required to obtain additional licenses, permits, filings, or approvals for our business operations in the future. For more detailed information, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—We may be adversely affected by the complexity and changes in PRC regulations on automotive and internet-related businesses and companies.”

As of the date of this annual report, in connection with our past issuances of securities to foreign investors, under current PRC laws, regulations, and rules, we, our PRC subsidiaries, and the VIEs (i) are not required to obtain permissions from with the CSRC, (ii) are not required to go through cybersecurity review by the CAC, and (iii) have not received or were not denied such requisite permissions by any PRC authority.

However, the PRC government has promulgated certain regulations and rules to strengthened oversight and control over offerings that are conducted overseas by, and foreign investment in, China-based issuers. In connection with any future capital markets activities overseas, we may need to file with the CSRC, undergo a cybersecurity review conducted by the CAC, or meet other regulatory requirements that may be adopted in the future by PRC regulatory authorities. To the extent such requirements are or become applicable to us, we cannot assure you that we would be able to comply with them in a timely manner, or at all. Any failure to obtain or delay in obtaining the required approval or completing the required procedures could subject us to restrictions and penalties imposed by the CSRC, the CAC, or other PRC regulatory authorities, which could include fines and penalties on our operations in China, delays of or restrictions on the repatriation of the proceeds from our overseas offerings into China, or other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our Class A ordinary shares or the ADSs. For more detailed information, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—The PRC government’s oversight and discretion over our business operations could result in a material adverse change in our operations and the value of our Class A ordinary shares or ADSs.”

4

Cash and Asset Flows Through Our Organization

Li Auto Inc. is a Cayman Islands holding company with no operations of its own. We conduct our operations in China primarily through our subsidiaries and the VIEs and their subsidiaries in China. As a result, although other means are available for us to obtain financing at the holding company level, Li Auto Inc.’s ability to pay dividends to the shareholders and to service any debt it may incur may depend upon dividends paid by our PRC subsidiaries and license and service fees paid by the VIEs and their subsidiaries. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends to Li Auto Inc. In addition, our PRC subsidiaries are permitted to pay dividends to Li Auto Inc. only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Furthermore, our PRC subsidiaries and the VIEs and their subsidiaries are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. For more details, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Holding Company Structure.”

Uncertainties regarding the interpretation and implementation of the contractual arrangements with the VIEs could limit our ability to enforce such agreements. If the PRC government deems that our contractual arrangements constituting part of the VIE structure do not comply with PRC laws and regulations, or if current laws and regulations change or are interpreted differently in the future, our ability to settle amount owed by the VIEs under the VIE agreements may be seriously hindered.

Under PRC laws and regulations, our PRC subsidiaries and the VIEs and their subsidiaries are subject to certain restrictions with respect to payment of dividends or otherwise transfers of any of their net assets to us. Remittance of dividends by a wholly foreign-owned enterprise out of China is also subject to examination by the banks designated by the PRC State Administration of Foreign Exchange, or SAFE. These restrictions are benchmarked against the paid-up capital and the statutory reserve funds of our PRC subsidiaries and the net assets of the VIEs in which we have no legal ownership. As of December 31, 2021, 2022, and 2023, the total amount of such restriction to which our PRC subsidiaries and the VIEs and their subsidiaries are subject was RMB11.4 billion, RMB9.5 billion, and RMB18.8 billion (US$2.7 billion), respectively. For risks relating to the fund flows of our operations in China, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements that we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.”

Under PRC laws, Li Auto Inc. may fund our PRC subsidiaries only through capital contributions or loans and fund the VIEs or their subsidiaries only through loans, subject to satisfaction of applicable government registration and approval requirements. As of December 31, 2021, 2022, and 2023, the outstanding balance of the principal amount of loans by Li Auto Inc. to our intermediate holding companies, subsidiaries and the VIEs was RMB23.8 billion, RMB48.0 billion, and RMB54.5 billion (US$7.7 billion), respectively.

Current PRC regulations permit our PRC subsidiaries, including Beijing Co Wheels Technology Co., Ltd., or Wheels Technology, to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, each of our PRC subsidiaries, the VIEs and their PRC subsidiaries are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of their respective registered capital. Our PRC subsidiaries and the VIEs and their subsidiaries may also allocate a portion of their after-tax profits based on PRC accounting standards to employee welfare and bonus funds at their discretion. These reserves are not distributable as cash dividends. Furthermore, if Wheels Technology incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments to us. In addition, the PRC tax authorities may require us to adjust our taxable income under the contractual arrangements we currently have in place in a manner that would materially and adversely affect Wheels Technology’s ability to pay dividends and other distributions to us. Any limitation on the ability of our PRC subsidiaries, including Wheels Technology, to distribute dividends to us or on the ability of the VIEs to make payments to Wheels Technology may restrict our ability to satisfy our liquidity requirements.

5

Taxation on Dividends or Distributions

Li Auto Inc.’s source of dividend partly comes from dividends paid by its PRC subsidiaries, including Wheels Technology, which in part depends on payments received from the VIEs under the contractual arrangements with the VIEs. We have never declared or paid any dividend on our ordinary shares and we do not currently intend to pay dividends to shareholders or holders of ADSs. We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. The undistributed earnings that are subject to dividend tax are expected to be indefinitely reinvested for the foreseeable future. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividend Policy.” For PRC and United States federal income tax considerations of an investment in our ADSs, see “Item 10. Additional Information—E. Taxation.”

Under the current laws of the Cayman Islands, Li Auto Inc. is not subject to tax on income or capital gains. Upon payments of dividends to our shareholders, no Cayman Islands withholding tax will be imposed. For purposes of illustration, the following discussion reflects the hypothetical taxes that might be required to be paid within mainland China, assuming that: (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future:

    

Tax calculation (1)

 

Hypothetical pre-tax earnings(2)

 

100

%

Tax on earnings at statutory rate of 25%(3)

  

(25)

%

Net earnings available for distribution

 

75

%

Withholding tax at standard rate of 10%(4)

  

(7.5)

%

Net distribution to Parent/Shareholders

 

67.5

%

Notes:

(1)For purposes of this example, the tax calculation has been simplified. The hypothetical book pre-tax earnings amount, not considering timing differences, is assumed to equal taxable income in China.
(2)Under the terms of the VIE agreements, our PRC subsidiaries may charge the VIEs for services provided to VIEs. These service fees will be recognized as expenses of the VIEs, with a corresponding amount as service income by our PRC subsidiaries and eliminate in consolidation. For income tax purposes, our PRC subsidiaries and the VIEs file income tax returns on a separate company basis. The service fees paid are recognized as a tax deduction by the VIEs and as income by our PRC subsidiaries and are tax neutral.
(3)Certain of our subsidiaries and the VIEs qualify for a 15% preferential income tax rate in China, or an income tax exemption for two years beginning from their first profitable calendar year since 2022, and a 50% reduction in the standard statutory rate for the subsequent three consecutive years. However, such tax benefit is subject to qualification, is temporary in nature, and may not be available in a future period when distributions are paid. For purposes of this hypothetical example, the table above reflects a maximum tax scenario under which the full statutory rate would be effective.
(4)The PRC Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a foreign-invested enterprise to its immediate holding company outside of China. A lower withholding income tax rate of 5% is applied if the foreign-invested enterprise’s immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with China, subject to a qualification review at the time of the distribution. For purposes of this hypothetical example, the table above assumes a maximum tax scenario under which the full withholding tax would be applied.

The table above has been prepared under the assumption that all profits of the VIEs will be distributed as fees to our PRC subsidiaries under tax neutral contractual arrangements. If, in the future, the accumulated earnings of the VIEs exceed the service fees paid to our PRC subsidiaries (or if the current and contemplated fee structure between the intercompany entities is determined to be non-substantive and disallowed by PRC tax authorities), the VIEs could make a non-deductible transfer to our PRC subsidiaries for the amounts of the stranded cash in the VIEs. This would result in such transfer being non-deductible expenses for the VIEs but still taxable income for the PRC subsidiaries. Our management believes that there is only a remote possibility that this scenario would happen.

As of December 31, 2023, the VIEs and their subsidiaries did not pay any service fees to Wheels Technology.

6

Financial Information Relating to the VIEs

The following tables present the condensed consolidating schedules for our consolidated variable interest entities and other entities for the years and as of the dates indicated.

Condensed Consolidating Schedule of Statements of Income/(Loss) Information

For the Year Ended December 31, 2023

    

    

    

Primary

    

VIEs and

    

    

Other

Beneficiary

VIEs’

Eliminating

Consolidated

Li Auto Inc.

Subsidiaries

of VIEs

Subsidiaries

Adjustments

Totals

(RMB in thousands)

Third-party revenues(1)

 

123,847,956

 

 

3,376

 

 

123,851,332

Inter-company revenues(2)

 

276,005

 

11,129,769

 

2,643,402

 

(14,049,176)

 

Third-party cost

(96,019,319)

(323,732)

(11,530)

(96,354,581)

Inter-company cost

 

(7,865,495)

 

(5,323)

 

 

7,870,818

 

Third-party expenses

(44,419)

 

(13,481,777)

 

(5,284,417)

 

(1,275,066)

 

(4,195)

 

(20,089,874)

Inter-company expenses

(5,987,526)

(126,164)

(68,874)

6,182,564

Share of income from subsidiaries and VIEs(3)

11,716,065

 

8,348,144

 

2,146,866

 

 

(22,211,075)

 

Other income

32,493

 

1,101,328

 

811,144

 

1,099,921

 

 

3,044,886

Income before income tax

11,704,139

10,219,316

8,348,143

2,391,229

(22,211,064)

10,451,763

Income tax (expense)/benefit

(6)

 

1,601,731

 

 

(244,363)

 

 

1,357,362

Net income

11,704,133

 

11,821,047

 

8,348,143

 

2,146,866

 

(22,211,064)

 

11,809,125

Less: Net income attributable to noncontrolling interests

 

104,992

 

 

 

 

104,992

Net income attributable to shareholders of Li Auto Inc.

11,704,133

 

11,716,055

 

8,348,143

 

2,146,866

 

(22,211,064)

 

11,704,133

    

For the Year Ended December 31, 2022

    

    

Primary

    

VIEs and

    

    

Other

Beneficiary

VIEs’

Eliminating

Consolidated

Li Auto Inc.

Subsidiaries

of VIEs

Subsidiaries

Adjustments

Totals

(RMB in thousands)

Third-party revenues(1)

 

 

45,286,816

 

 

 

 

45,286,816

Inter-company revenues(2)

 

 

87,741

 

4,230,418

 

7,211,082

 

(11,529,241)

 

Third-party cost

 

 

(31,814,443)

 

(147,566)

 

(4,534,351)

 

 

(36,496,360)

Inter-company cost

 

 

(7,693,094)

 

 

(8,290)

 

7,701,384

 

Third-party expenses

 

(36,271)

 

(7,185,416)

 

(3,584,812)

 

(1,638,834)

 

 

(12,445,333)

Inter-company expenses

 

 

(3,490,054)

 

(98,945)

 

(302)

 

3,589,301

 

Share of (loss)/income from subsidiaries and VIEs(3)

 

(2,300,538)

 

1,070,558

 

679,612

 

 

550,368

 

Other income/(expense)

 

324,597

 

1,290,985

 

235,124

 

(358,394)

 

3,210

 

1,495,522

(Loss)/income before income tax

 

(2,012,212)

 

(2,446,907)

 

1,313,831

 

670,911

 

315,022

 

(2,159,355)

Income tax (expense)/benefit

 

(3)

 

126,236

 

(7,927)

 

8,701

 

 

127,007

Net (loss)/income

 

(2,012,215)

 

(2,320,671)

 

1,305,904

 

679,612

 

315,022

 

(2,032,348)

Less: Net loss attributable to noncontrolling interests

 

 

(20,133)

 

 

 

 

(20,133)

Net (loss)/income attributable to shareholders of Li Auto Inc.

 

(2,012,215)

 

(2,300,538)

 

1,305,904

 

679,612

 

315,022

 

(2,012,215)

    

For the Year Ended December 31, 2021

    

    

    

Primary

    

VIEs and

    

    

Other

Beneficiary

VIEs’

Eliminating

Consolidated

Li Auto Inc.

Subsidiaries

of VIEs

Subsidiaries

Adjustments

Totals

(RMB in thousands)

Third-party revenues(1)

 

20,715,104

 

 

6,294,675

 

 

27,009,779

Inter-company revenues(2)

 

5,891,611

 

2,471,182

 

22,287,788

 

(30,650,581)

 

Third-party cost

 

(992,755)

 

(83,709)

 

(20,171,861)

 

 

(21,248,325)

Inter-company cost

 

(20,557,830)

 

 

(5,891,611)

 

26,449,441

 

Third-party expenses

(28,140)

 

(2,553,106)

 

(1,796,341)

 

(2,401,187)

 

 

(6,778,774)

Inter-company expenses

 

(3,860,317)

 

(2,877)

 

(65,750)

 

3,928,944

 

Share of (loss)/income from subsidiaries and VIEs(3)

(563,106)

 

2,811,080

 

2,273,551

 

(13)

 

(4,521,512)

 

Other income/(expense)

269,791

 

(2,016,893)

 

504

 

2,610,121

 

985

 

864,508

(Loss)/income before income tax

(321,455)

 

(563,106)

 

2,862,310

 

2,662,162

 

(4,792,723)

 

(152,812)

Income tax expense

 

 

(51,230)

 

(117,413)

 

 

(168,643)

Net (loss)/income

(321,455)

(563,106)

2,811,080

2,544,749

(4,792,723)

(321,455)

Net (loss)/income attributable to shareholders of Li Auto Inc.

(321,455)

 

(563,106)

 

2,811,080

 

2,544,749

 

(4,792,723)

 

(321,455)

7

Condensed Consolidating Schedule of Balance Sheet Information

As of December 31, 2023

    

    

    

Primary

    

VIEs and

    

    

Other

Beneficiary

VIEs’

Eliminating

Consolidated

Li Auto Inc.

Subsidiaries

of VIEs

Subsidiaries

Adjustments

Totals

(RMB in thousands)

Cash and cash equivalents

1,121,233

 

62,476,935

 

721

 

27,730,141

 

 

91,329,030

Restricted cash

 

479

 

 

 

 

479

Time deposits and short-term investments

 

1,725,382

 

 

10,207,873

 

 

11,933,255

Trade receivable

 

140,047

 

 

3,476

 

 

143,523

Amounts due from the Group companies(5)

54,475,676

 

62,322,940

 

19,165,427

 

30,567,860

 

(166,531,903)

 

Inventories

 

6,871,713

 

12

 

254

 

 

6,871,979

Prepayments and other current assets

 

3,868,375

 

25,005

 

172,090

 

181,848

 

4,247,318

Investments in subsidiaries(3)

11,452,246

 

16,408,055

 

 

 

(27,860,301)

 

Investments in VIEs and VIEs’ subsidiaries(3)

 

 

7,121,753

 

 

(7,121,753)

 

Long-term investments

10,268

 

1,065,290

 

157,045

 

362,773

 

 

1,595,376

Property, plant and equipment, net(4)

10

 

15,424,813

 

208,291

 

112,586

 

(682)

 

15,745,018

Operating lease right-of-use assets, net

 

5,267,713

 

17,897

 

653,620

 

 

5,939,230

Intangible assets, net(4)

 

318,081

 

112,506

 

669,495

 

(235,902)

 

864,180

Goodwill

5,484

5,484

Deferred tax assets

 

1,990,245

 

 

 

 

1,990,245

Other non-current assets

 

2,236,261

 

102,434

 

463,659

 

 

2,802,354

Total assets

67,059,433

 

180,121,813

 

26,911,091

 

70,943,827

 

(201,568,693)

 

143,467,471

Short-term borrowings

6,719,797

 

255,602

 

 

 

 

6,975,399

Trade and notes payable

 

47,163,817

 

239,502

 

4,466,778

 

 

51,870,097

Amounts due to the Group companies(5)

3,598

 

99,688,074

 

8,847,504

 

57,988,379

 

(166,527,555)

 

Amounts due to related parties

 

4,919

 

5,665

 

23

 

 

10,607

Deferred revenue, current

 

1,525,543

 

 

 

 

1,525,543

Operating lease liabilities, current

 

1,086,216

 

15,210

 

45,011

 

 

1,146,437

Accruals and other current liabilities

193,414

 

9,035,180

 

1,395,105

 

590,927

 

 

11,214,626

Long-term borrowings

 

1,747,070

 

 

 

 

1,747,070

Deferred revenue, non-current

 

812,218

 

 

 

 

812,218

Operating lease liabilities, non-current

 

2,972,326

 

 

705,635

 

 

3,677,961

Deferred tax liabilities

 

200,877

 

 

 

 

200,877

Other non-current liabilities

 

3,686,043

 

50

 

25,321

 

 

3,711,414

Total liabilities

6,916,809

 

168,177,885

 

10,503,036

 

63,822,074

 

(166,527,555)

 

82,892,249

Total shareholders’ equity

60,142,624

 

11,943,928

 

16,408,055

 

7,121,753

 

(35,041,138)

 

60,575,222

Total liabilities and shareholders’ equity

67,059,433

 

180,121,813

 

26,911,091

 

70,943,827

 

(201,568,693)

 

143,467,471

8

As of December 31, 2022

    

    

    

Primary

    

VIEs and

    

    

Other

Beneficiary

VIEs’

Eliminating

Consolidated

Li Auto Inc.

Subsidiaries

of VIEs

Subsidiaries

Adjustments

Totals

(RMB in thousands)

Cash and cash equivalents

974,224

 

18,971,899

 

2,238

 

18,529,655

 

 

38,478,016

Restricted cash

 

962,796

 

 

977,346

 

 

1,940,142

Time deposits and short-term investments

2,195,952

 

7,491,111

 

 

8,344,332

 

 

18,031,395

Trade receivable

 

48,381

 

 

 

 

48,381

Amounts due from the Group companies(5)

47,993,884

 

61,113,464

 

8,058,719

 

37,885,882

 

(155,051,949)

 

Inventories

 

6,804,439

 

 

254

 

 

6,804,693

Prepayments and other current assets

3,132

 

1,492,750

 

25,818

 

168,160

 

 

1,689,860

Investments in subsidiaries(3)

 

7,128,624

 

 

 

(7,128,624)

 

Investments in VIEs and VIEs’ subsidiaries(3)

 

 

3,827,028

 

 

(3,827,028)

 

Long-term investments

12,968

 

1,179,908

 

149,076

 

142,539

 

 

1,484,491

Property, plant and equipment, net(4)

18

 

10,918,971

 

120,001

 

101,577

 

47,331

 

11,187,898

Operating lease right-of-use assets, net

 

2,808,503

 

37,297

 

693,111

 

 

3,538,911

Intangible assets, net(4)

 

363,510

 

290,654

 

740,570

 

(562,114)

 

832,620

Goodwill

5,484

5,484

Deferred tax assets

 

74,767

 

 

 

 

74,767

Other non-current assets

 

1,760,306

 

77,020

 

583,967

 

 

2,421,293

Total assets

51,180,178

 

121,124,913

 

12,587,851

 

68,167,393

 

(166,522,384)

 

86,537,951

Short-term borrowings

6,965

 

383,785

 

 

 

 

390,750

Trade and notes payable

 

18,652,642

 

48,491

 

1,323,196

 

 

20,024,329

Amounts due to the Group companies(5)

 

91,130,858

 

4,644,571

 

60,539,514

 

(156,314,943)

 

Amounts due to related parties

 

1,309

 

5,858

 

23

 

 

7,190

Deferred revenue, current

 

569,234

 

 

 

 

569,234

Operating lease liabilities, current

 

634,383

 

21,364

 

40,707

 

 

696,454

Accruals and other current liabilities

59,533

 

4,800,392

 

490,386

 

334,333

 

 

5,684,644

Long-term borrowings

6,254,979

 

2,475,828

 

 

500,000

 

 

9,230,807

Deferred revenue, non-current

 

581,598

 

 

 

 

581,598

Operating lease liabilities, non-current

 

1,194,533

 

13,161

 

738,673

 

 

1,946,367

Deferred tax liabilities

74,830

 

 

2,979

 

 

77,809

Other non-current liabilities

 

2,134,692

 

50

 

7,720

 

 

2,142,462

Total liabilities

6,321,477

 

122,634,084

 

5,223,881

 

63,487,145

 

(156,314,943)

 

41,351,644

Total shareholders’ equity

44,858,701

 

(1,509,171)

 

7,363,970

 

4,680,248

 

(10,207,441)

 

45,186,307

Total liabilities and shareholders’ equity

51,180,178

 

121,124,913

 

12,587,851

 

68,167,393

 

(166,522,384)

 

86,537,951

Condensed Consolidating Schedule of Cash Flow Information

    

For the Year Ended December 31, 2023

    

    

Primary

    

VIEs and

    

    

Other

Beneficiary

VIEs’

Eliminating

Consolidated

Li Auto Inc.

Subsidiaries

of VIEs

Subsidiaries

Adjustments

Totals

(RMB in thousands)

Net cash (used in)/provided by inter-company transactions(6)

 

(2,869,165)

 

225,763

 

2,643,402

 

 

Net cash provided by/(used in) other transactions

56,515

 

62,188,526

 

(3,958,498)

 

(7,593,022)

 

 

50,693,521

Net cash provided by/(used in) operating activities

56,515

 

59,319,361

 

(3,732,735)

 

(4,949,620)

 

 

50,693,521

Inter-company loan financing to group companies(7)

(3,589,329)

 

(15,616,488)

 

 

 

19,205,817

 

Other investing activities with external entities

2,137,626

 

133,450

 

(195,386)

 

(2,087,758)

 

 

(12,068)

Net cash used in investing activities

(1,451,703)

 

(15,483,038)

 

(195,386)

 

(2,087,758)

 

19,205,817

 

(12,068)

Inter-company loan financing from group companies(7)

 

 

3,926,604

 

15,279,213

 

(19,205,817)

 

Other financing activities with external entities

1,547,552

 

(862,167)

 

 

(500,000)

 

 

185,385

Net cash provided by/(used in) financing activities

1,547,552

 

(862,167)

 

3,926,604

 

14,779,213

 

(19,205,817)

 

185,385

9

For the Year Ended December 31, 2022

    

    

    

Primary

    

VIEs and

    

    

Other

Beneficiary

VIEs’

Eliminating

Consolidated

Li Auto Inc.

Subsidiaries

of VIEs

Subsidiaries

Adjustments

Totals

(RMB in thousands)

Net cash (used in)/provided by inter-company transactions(6)

(70)

 

(2,884,657)

 

50,319

 

2,834,408

 

 

Net cash provided by/(used in) other transactions

450,587

 

20,590,505

 

(2,738,637)

 

(10,922,189)

 

 

7,380,266

Net cash provided by/(used in) operating activities

450,517

 

17,705,848

 

(2,688,318)

 

(8,087,781)

 

 

7,380,266

Inter-company loan financing to group companies(7)

(23,397,234)

 

(23,424,257)

 

 

 

46,821,491

 

Other investing activities with external entities

5,426,871

 

(7,324,717)

 

(317,321)

 

(2,149,494)

 

 

(4,364,661)

Net cash used in investing activities

(17,970,363)

 

(30,748,974)

 

(317,321)

 

(2,149,494)

 

46,821,491

 

(4,364,661)

Inter-company loan financing from group companies(7)

 

23,397,234

 

3,006,631

 

20,417,626

 

(46,821,491)

 

Other financing activities with external entities

2,789,778

 

1,250,737

 

 

1,598,877

 

 

5,639,392

Net cash provided by financing activities

2,789,778

 

24,647,971

 

3,006,631

 

22,016,503

 

(46,821,491)

 

5,639,392

For the Year Ended December 31, 2021

    

    

    

Primary

    

VIEs and

    

    

Other

Beneficiary

VIEs’

Eliminating

Consolidated

Li Auto Inc.

Subsidiaries

of VIEs

Subsidiaries

Adjustments

Totals

(RMB in thousands)

Net cash (used in)/provided by inter-company transactions(6)

 

(8,365,873)

 

1,024,591

 

7,341,282

 

 

Net cash provided by/(used in) other transactions

367,063

 

18,198,999

 

(1,532,536)

 

(8,693,141)

 

 

8,340,385

Net cash provided by/(used in) operating activities

367,063

 

9,833,126

 

(507,945)

 

(1,351,859)

 

 

8,340,385

Inter-company loan financing to group companies(7)

(10,157,678)

 

(15,423,324)

 

 

 

25,581,002

 

Other investing activities with external entities

7,252,559

 

(2,797,315)

 

(71,443)

 

(8,641,045)

 

 

(4,257,244)

Net cash used in investing activities

(2,905,119)

 

(18,220,639)

 

(71,443)

 

(8,641,045)

 

25,581,002

 

(4,257,244)

Inter-company loan financing from group companies(7)

 

10,157,678

 

564,358

 

14,858,966

 

(25,581,002)

 

Other financing activities with external entities

16,539,225

 

89,000

 

 

81,308

 

 

16,709,533

Net cash provided by financing activities

16,539,225

 

10,246,678

 

564,358

 

14,940,274

 

(25,581,002)

 

16,709,533

Notes:

(1)

Third-party revenues primarily resulted from vehicle sales to customers by certain of the VIEs’ subsidiaries before the reorganization in 2021. No vehicle sales revenues were generated after the 2021 reorganization.

(2)

It represents the elimination of the inter-company technical and other service fees, vehicle sales, and transfer of intangible assets.

(3)

It represents the elimination of the investment in the VIEs and our subsidiaries by Li Auto Inc.

(4)

It represents the elimination of the unrealized profit from inter-company transfer of long-lived assets.

(5)

It represents the elimination of intercompany balances among Li Auto Inc., VIEs, and our subsidiaries. As of December 31, 2021, 2022, and 2023, there were no balances for management fees charged to VIEs. The amounts due from group companies and the amounts due to group companies represent the funds provided among Li Auto Inc., the VIEs, and our subsidiaries.

(6)

For the years ended December 31, 2021, 2022, and 2023, cash paid by subsidiaries to VIEs for certain service fees, inter-company vehicle sales and inter-company transfer of intangible assets were RMB7.3 billion, RMB2.8 billion, and RMB2.6 billion, respectively. For the years ended December 31, 2021, 2022, and 2023, no management fees were paid by VIEs to the WFOE (pursuant to each management fee arrangement with the VIEs).

(7)

For the years ended December 31, 2021, 2022, and 2023, inter-company loan financing paid by subsidiaries to VIEs were RMB14.9 billion, RMB20.4 billion, and RMB15.3 billion, respectively.

10

A.

[Reserved]

Selected Financial Data

The following selected consolidated statements of comprehensive (loss)/income data and selected consolidated cash flow data for the years ended December 31, 2021, 2022, and 2023 and the selected consolidated balance sheet data as of December 31, 2022 and 2023 have been derived from our audited consolidated financial statements, which are included in this annual report beginning on page F-1. The selected consolidated statements of comprehensive loss data and selected consolidated cash flow data for the years ended December 31, 2019 and 2020 and the selected consolidated balance sheet data as of December 31, 2019, 2020, and 2021 have been derived from our audited consolidated financial statements that are not included in this annual report. Our historical results are not necessarily indicative of results expected for future periods. You should read this selected financial data together with our consolidated financial statements and the related notes and information under “Item 5. Operating and Financial Review and Prospects” in this annual report. Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP.

The following table sets forth our selected consolidated statements of comprehensive (loss)/income data for the years indicated.

For the Year Ended December 31,

2019

2020

2021

2022

2023

    

RMB

    

RMB

    

RMB

    

RMB

    

RMB

    

US$

(in thousands, except for share and per share data)

Selected Consolidated Statements of Comprehensive (Loss)/Income Data:

 

  

 

  

 

  

 

  

Revenues:

 

  

 

  

 

  

 

  

—Vehicle sales

 

280,967

 

9,282,703

 

26,128,469

44,106,434

120,294,667

 

16,943,150

—Other sales and services

 

3,400

 

173,906

 

881,310

1,180,382

3,556,665

 

500,946

Total revenues

 

284,367

 

9,456,609

 

27,009,779

45,286,816

123,851,332

 

17,444,096

Cost of sales(1)

 

 

 

 

—Vehicle sales

 

(279,555)

 

(7,763,628)

 

(20,755,578)

(35,688,343)

(94,482,347)

 

(13,307,560)

—Other sales and services

 

(4,907)

 

(143,642)

 

(492,747)

(808,017)

(1,872,234)

 

(263,699)

Total cost of sales

 

(284,462)

 

(7,907,270)

 

(21,248,325)

(36,496,360)

(96,354,581)

 

(13,571,259)

Gross (loss)/profit

 

(95)

 

1,549,339

 

5,761,454

8,790,456

27,496,751

 

3,872,837

Operating expenses:

 

 

 

 

—Research and development(1)

 

(1,169,140)

 

(1,099,857)

 

(3,286,389)

(6,780,032)

(10,586,129)

 

(1,491,025)

—Selling, general and administrative(1)

 

(689,379)

 

(1,118,819)

 

(3,492,385)

(5,665,301)

(9,767,955)

 

(1,375,788)

—Other operating income, net

264,210

37,213

Total operating expenses

 

(1,858,519)

 

(2,218,676)

 

(6,778,774)

(12,445,333)

(20,089,874)

 

(2,829,600)

(Loss)/Income from operations

 

(1,858,614)

 

(669,337)

 

(1,017,320)

(3,654,877)

7,406,877

 

1,043,237

Other (expense)/income

 

(559,260)

 

480,460

 

864,508

1,495,522

3,044,886

 

428,863

(Loss)/Income before income tax

 

(2,417,874)

 

(188,877)

 

(152,812)

(2,159,355)

10,451,763

 

1,472,100

Net (loss)/income

 

(2,438,536)

 

(151,657)

 

(321,455)

(2,032,348)

11,809,125

 

1,663,280

Net (loss)/income attributable to ordinary shareholders of Li Auto Inc.

 

(3,281,607)

 

(791,985)

 

(321,455)

(2,012,215)

11,704,133

 

1,648,492

Weighted average number of ordinary shares used in computing net (loss)/earnings per share

 

 

 

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