The ideal is very rich, but the reality may not be as good as it should be.
Before the market on May 26, Li Auto Inc released its financial results for the first quarter of 2021. The financial results show that Li Auto Inc’s total revenue for the first quarter of 2021 was $3.58 billion as of March 31, up 319.8% from $851.7 million in the first quarter of 2020, but down 13.8% from $4.15 billion in the fourth quarter of 2020.
Losses widened in the first quarter with a net loss of $360 million
After a brief profit in the fourth quarter of 2020, Li Auto Inc returned to its loss-making norm in the latest quarter.
Li Auto Inc reported a net profit of $107.5 million in the fourth quarter of 2020, turning a positive quarterly profit for the first time. However, according to the earnings report, Li Auto Inc reported a net loss of $360 million in the first quarter of 2021, compared to a net loss of $77.1 million in the first quarter of 2020, which widened its loss.
In the first quarter of 2021, Li Auto Inc reported revenues of $3.46 billion from auto sales, up 311.8% from $841.1 million in the first quarter of 2020, but down 14.6% from $4.06 billion in the fourth quarter of 2020.
The increase in automotive sales revenue compared to the first quarter of 2020 was primarily attributed by Li Auto Inc to increased deliveries due to the continued expansion of its sales network.
The decrease in automotive sales revenue compared to the fourth quarter of 2020 was primarily attributable by Li Auto Inc to lower vehicle deliveries, which was primarily impacted by seasonal factors related to the Lunar New Year holiday and a localized outbreak of New Crown Pneumonia in the northern region in February 2021.
Li Auto Inc’s gross margin on vehicle sales for the first quarter of 2021 was 16.9%, which also decreased compared to the fourth quarter of 2020.
8.4% and 17.1% in the first and fourth quarters of 2020, respectively.
Li Auto Inc attributed the main reason for the decrease in gross margin on vehicle sales compared to the fourth quarter of 2020 to lower average revenue per vehicle due to promotional activities launched in the first quarter of 2021.
Gross profit for the first quarter of 2021 was RMB 616.7 million ($94.1 million), an increase of 802.9% compared to RMB 68.3 million in the first quarter of 2020 and a decrease of 14.9% compared to RMB 724.6 million in the fourth quarter of 2020.
Gross margin was 17.3% in the first quarter of 2021, compared to 8.0% and 17.5% in the first and fourth quarters of 2020, respectively. The change was primarily due to the change in gross margin on vehicle sales.
About 15,000 units delivered in the second quarter, sales to break 10,000 in September
The old Li Auto ONE will only start official deliveries in December 2019, so the official year-on-year data given is not very meaningful for reference. For a new car manufacturer, the most important thing is to look at the ring data, from which you can see whether the development trend of a startup car company is to the good.
Whether it’s revenue, profit, or sales, Li Auto Inc’s sales in the first quarter of 2021 were less than the previous quarter, which is a direct result of the decline in revenue on a YoY basis.
The data shows that in the first quarter of 2021, Li Auto ONE delivered 12,579 units; in the first quarter of 2020 Li Auto ONE delivered 2,896 units, in the second quarter 6,604 units, in the third quarter 8,660 units and in the fourth quarter 14,464 units.
For this year’s sales forecast, Li Auto Inc expects 14,500 to 15,500 vehicle deliveries in the second quarter of the year; and total revenues in the range of $3.99 billion to $4.27 billion.
In a group interview with Titanium Media and other media after the launch of the 2021 Li Auto ONE, Li Auto Inc co-founder and president Shen Yannan said, “We hope to achieve sales of more than 10,000 units in September this year.”
There are many explosive single products in the market that have achieved sales of over 10,000 units, but Li Auto Inc is a new force in car manufacturing, with only one model under its umbrella, and the total sales have only exceeded 55,000 units so far, how can the 2021 Li Auto ONE achieve sales of over 10,000 units in September this year?
Shen Yannan explained that there are two aspects that support the sales breakthrough in September: on the one hand, the product power of 2021 Li Auto ONE is further improved; on the other hand, Li Auto Inc has 75 retail stores in 54 cities as of now, and will accelerate the coverage of retail channels this year, and the number of retail stores is expected to reach 200 by the end of the year.
The 2021 Li Auto ONE has a starting price of $338,000, just $10,000 more than the old model, and deliveries will begin on June 1. Li Auto Inc says that production of the 2020 model will cease as production and sales of the 2021 Li Auto ONE begin.
Older users are leeks?
Compared to the 2020 Li Auto ONE, the 2021 Li Auto ONE achieves multiple upgrades in hardware. The range-extended electric system, ideal AD advanced assisted driving, intelligent cockpit, and ride comfort have been upgraded.
It is worth noting that, in terms of the three electric power sources, the three-in-one electric drive is used, and the NEDC range is 1080km, of which the pure electric range is increased to 188km; in terms of the intelligent and auxiliary operating system, the 8-megapixel visual recognition camera, two of Horizon’s latest “Journey 3” autonomous driving chips, and five Bosch fifth-generation millimeter wave radars are installed.
Among them, the 2021 Li Auto ONE will be equipped with the full-stack self-developed ideal AD advanced assisted driving system and NOA navigation assisted driving function as standard.
For old car owners in terms of NOA, Li Auto Inc founder, chairman and CEOLi Xiang confessed in a group interview with Titanium Media and other media, “NOA for old car owners there is no way to upgrade, this harness is different, a little problem will cause big safety problems, and basically there is no possibility of changing the harness, and there is no way to provide upgrades for older owners.”
But Li Xiang promises that the previous 2020 Li Auto ONE’s L2-level ADAS will continue to be upgraded, and things like visual parking will be introduced.
On how to balance the feelings of old and new users, Shen Yannan said, “The industry itself is accelerating, and we can’t stop the evolution of our products. For users, we are still more from the follow-up car after-sales service above, increase the satisfaction of everyone. By constantly improving the service, so that everyone is satisfied.”
However, before the release of the 2021 Li Auto ONE on May 25, Li Xiang posted an article on his microblog, “About the upgrade mode of the hardware product manager”, and under the microblog, a message that was liked and topped was “What about the old customers? Hardware upgrades are not mentioned, and now software upgrades are not the same as new cars, you’re killing yourself”.
Some old Li Auto ONE owners said that when they went to the store in mid-April to order the car, they repeatedly confirmed with the sales whether there was a facelift, but the sales replied categorically that there would be no facelift, and even if there was, it would be at the end of the year, and there would definitely not be one in the near future. Then in April, the Shanghai Auto Show did not show the facelift, and in May, the facelift was released directly.
There were even old Li Auto ONE owners who had just picked up their cars and were cut out of the leek, helping Li Auto Inc clear the inventory cars.
The main reason for the old users’ resentment and dissatisfaction is that during May 1 this year, Li Auto Inc launched a promotion to enjoy $8,000 off the purchase of the car and an interest-free offer of $150,000 for the loan portion in order to digest the inventory. And the new car only 10,000 more, in all aspects of the configuration have been upgraded a lot.
For the new brand, the product should pay special attention to the feelings of the old users when updating and replacing, and balancing the feelings of the old and new users is the path of benign brand upward development.
Perhaps, Li Auto Inc’s sales will be good in the future, but the dissatisfaction of some old users should also cause it to reflect and pay attention.
For Baidu, Xiaomi and other entry into the car, Li Xiang believes that “in the end, it depends on whether you can come up with real products, whether it is really All in in making products, or to take the product, take the market sales to speak.”
Li Xiang is still confident and a bit conceited, confident in the new Li Auto ONE, but also full of expectations.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/first-quarter-net-loss-of-360-million-yuan-september-sales-to-break-10000-li-auto-inc-with-what/
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