Company: LI
Filing Date: 2025-04-10
Form Type: 20-F
Source: 0001410578-25-000678
Chunk: 77

Company: Li Auto Inc.
Filing Date: 2025-04-10
Form: 20-F
Item: Item 3
Chunk 77
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’s economic growth through controlling the payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies.
While the PRC economy has experienced significant growth over the past decades, there can be no assurance that the growth would be even across sectors or continue. Any adverse changes in the economic conditions in China, in the policies of the PRC government, or in the PRC laws and regulations, could materially and adversely affect our operations. Any severe or prolonged economic downturn could adversely affect our business and operating results, leading to reduction in demand for our products, and adversely affect our competitive position.
Our ability to successfully maintain or grow business operations in China depends on various factors, some of which are beyond our control. These factors include, among others, macro-economic and other market conditions, political stability, social conditions, measures to control inflation or deflation, changes in the rate or method of taxation, changes in laws, regulations, and administrative directives or their interpretation, and changes in industry policies. If we fail to take timely and appropriate measures to adapt to any of the changes or challenges, our business, financial condition, and results of operations could be materially and adversely affected. In addition, the PRC government has oversight and discretion over the conduct of our business in accordance with PRC laws and regulations and may influence our operations. Our failure to meet the requirements in accordance with applicable laws could result in a material adverse change in our business operations and/or the value of our securities.
The PRC legal system is developing, which could lead to uncertainties that adversely affect us.
We conduct our business primarily through our PRC subsidiaries and the VIEs and their subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRC subsidiaries are subject to laws and regulations applicable to foreign investment in China. The PRC legal system is a civil law system based on written statutes. There is limited volume of published court decisions, which may be cited for reference but have limited precedential value unless otherwise stipulated by the Supreme People’s Court. The PRC legal system is developing rapidly, and the interpretation of laws, regulations, and rules and the enforcement of these laws, regulations, and rules could lead to uncertainties. For example, on December 29, 2023, the Standing Committee of the National People’s Congress promulgated the revised PRC Company Law, which took effect on July 1, 2024. The new Company Law makes substantial changes in a number of areas, including,