On February 27th, LI released its financial report for the fourth quarter and the whole year of 2022.
Data show that in the fourth quarter of last year, LI achieved revenue of 17.65 billion yuan, and the annual revenue of 45.29 billion yuan, up 67.7% year-on-year, but the operating loss in the same period was as high as 3.65 billion yuan, up 259.3% year-on-year.About every LI sold, the net loss is 27,000 yuan..
At the same time, the gross profit margin rose to 20.2% in the fourth quarter of 2022, butThe annual gross profit margin dropped to 19.4%.In 2021, the gross profit margin was 21.3%, down 1.9 percentage points year-on-year.
In 2022, the company’s operating expenses and R&D expenses were 12.45 billion yuan and 6.78 billion yuan respectively, up by 83.6% and 106.3% year-on-year, and other expenses related to employee management were 5.67 billion yuan, up by 62.2% year-on-year.
By the end of 2021, the number of employees in LI was 11,900, and by the end of 2022, this number had increased to 19,300, with a year-on-year increase of 62.2%.
However, as of the end of the fourth quarter of last year, the ideal book cash flow was still as high as 58.45 billion yuan. For the company, there is not much pressure on future R&D and management expenditures.
It generally takes a long period of loss for new forces to build cars. Even Tesla only turned losses into profits in 2020, and its annual gross profit margin during 2012-2022 experienced repeated fluctuations.
From 7.3% in 2012 to the peak of 27.6% in 2014, it then fell all the way until it stabilized and rebounded in 2020, and remained above 21% for three consecutive years.The gross profit margin in 2022 was 25.6%.
Therefore, the increase in operating losses is not a problem in the short term. It depends on whether the brand can shorten the time of profit through product layout. For capital, long-term interests can be considered, but patience is limited.
For LI, in 2022, it stopped production in Li ONE decisively, introduced L9, L8 and L7 in reverse order, and broke through the 20,000-vehicle mark in December, which also proved the correctness of its product strategy.
If the previous ideal was only individual combat, then the next step was the wolf tactics, and it didn’t give itself too many price barriers, unlike Wei Lai’s rigid high-end work, butThrough the iteration of new products, it gradually penetrated into the market space of 200,000-300,000 yuan..
Why should BYD break through the price bottom line at all costs? The purpose is to take the volume, and then share the total cost based on the general volume, and finally achieve the goal of quick turnover and small profits.
Ideally, to reduce the loss, it is difficult to rely solely on high-end products, and the real volume is concentrated in the range of 150,000-300,000 yuan.
Li Xiang, CEO of LI, once said that it is not a dream to sell 30,000 vehicles a month if the L7 Air version is delivered.
In January of this year, Ideality became the only car company with monthly sales exceeding 10,000 with 15,141 vehicles. The sales of L9 and L8 were hot, and the L7 was scheduled to be optimistic. This is also the reason why Li wants to have the confidence to achieve monthly sales of 30,000 in the future.
Ideally, the analysis of the product array is more accurate, such as the L9 (459,800 yuan) with the highest price, which is aimed at potential customers with sufficient budget and BBA. They hope to experience the fun completely different from the traditional high-end fuel vehicles, and at the same time, the six-seat layout meets the needs of Chinese family travel scenes.
The guide price of L8 is 339.8-399.8 thousand yuan, which is a reduced version of L9, and it is also six seats, but the price has dropped by 60-12 thousand yuan to meet those groups who want to buy L9 but have insufficient budget.
L7 focuses on five luxury SUV markets, with a guide price of 31.98-37.98 million yuan, which is cheaper than L8, making up for the gaps in five markets and directly grabbing customers from Audi Q5L and Mercedes-Benz GLC. This kind of consumers don’t care about six, which is more pragmatic and has limited budget.
But from that ideal background display,LI car owners used the smart big screen for more than 6 hours/week during parking.It also reflects from one side that people who choose LI have a high demand for entertainment functions of new energy vehicles, which is becoming a breakthrough to help new forces rapidly expand their market share.
In addition, the new forces also have great advantages in intelligence. They can rely on large-capacity batteries to achieve rich car experience, which traditional fuel vehicles can’t do at all.
In 2023, for the new forces, the cost of power batteries is expected to be greatly reduced. For example, Contemporary Amperex Technology Co., Limited has launched a half-price cooperation idea for large customers, and LI will be one of the cooperative car companies.
With the improvement of product structure and the initial effect of function optimization, the expenditure on R&D will also decrease in the future. LI is waiting for the mass production of Qualcomm Snapdragon 8295 chip, and the car system experience will be promoted by leaps and bounds.
Full text summary:Under the background of frequent negative news and employees blowing their own dirty linen, it seems that LI’s counter-attack road has not encountered much resistance, and the market of high-end intelligent new energy vehicles is still a blue ocean, which is also the basis for many new forces to dare to burn money. However, this year’s new energy market will usher in a cruel price war. Fortunately, it has not yet reached the high-end market. For new forces, adhering to the product concept of high scarcity and exclusiveness may be the key to avoiding strangulation.