Company: LI
Filing Date: 2025-04-10
Form Type: 20-F
Source: 0001410578-25-000678
Chunk: 21

Company: Li Auto Inc.
Filing Date: 2025-04-10
Form: 20-F
Item: Item 3
Chunk 21
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 of EREVs, we currently face competition from other automakers that have successfully commercialized EREVs as well. Notably, in 2024, a number of other automakers entered into the EREV market by launching vehicle models with similar functionality or features with our EREVs, some of which are priced at RMB200,000 or above and directly compete with our vehicles. We cannot assure you that we will be able to maintain efficient and automated manufacturing capabilities and processes, or reliable sources of component supply that will enable us to meet the quality, price, design, engineering, and production standards. In addition, increasing competition in the EREV market in China, such as pricing strategies conducted by our competitors, may cause us to experience lower vehicle sales and slower inventory turnover, which may result in downward price pressure and may adversely affect our business, financial condition, results of operations, and prospects.
We also believe that user confidence in EREVs is essential in promoting our vehicles. As a result, consumers will be less likely to purchase our EREVs if they are not convinced of the technical and functional superiority of EREVs. Any defects in or significant malfunctioning of the range extension system, or any negative perceptions of EREVs with or without any grounds, may weaken consumer confidence in EREVs, cause safety concerns among consumers, and negatively impact our brand name, financial condition, and results of operations. Similarly, suppliers and other third parties will be less likely to invest time and resources in developing business relationships with us if they are not convinced that our business will succeed.
We had net losses in the past and may not be able to maintain our profitability.
Although we generated net income of RMB11.8 billion and RMB8.0 billion (US$1.1 billion) in 2023 and 2024, respectively, we incurred net losses of RMB2.0 billion in 2022. While we had net cash provided by operating activities of RMB7.4 billion, RMB50.7 billion and RMB15.9 billion (US$2.2 billion) in 2022, 2023 and 2024, respectively, we had net cash used in operating activities of RMB3.8 billion in the first half of 2024 mainly due to increased payment related to inventory purchase. We made capital expenditures of RMB5.1 billion, RMB6.5 billion, and RMB7.7 billion (US$1.1 billion) in