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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR 12(g)OF THE SECURITIES EXCHANGE ACT OF 1934ORANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal yea
2、r ended December 31,2022ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from toORSHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company reportCommission Fi
3、le Number:001-39407Li Auto Inc.(Exact Name of Registrant as Specified in Its Charter)N/A(Translation of Registrants Name into English)Cayman Islands(Jurisdiction of Incorporation or Organization)11 Wenliang StreetShunyi District,Beijing 101399Peoples Republic of China(Address of Principal Executive
4、Offices)Tie Li,Chief Financial OfficerTelephone:+86(10)8742-7209Email:11 Wenliang StreetShunyi District,Beijing 101399Peoples 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
5、 Act:Title of Each Class Trading Symbol Name of Each Exchange on Which RegisteredAmerican depositary shares,each representing two Class A ordinary shares,par value US$0.0001 per shareClass A ordinary shares,par value US$0.0001 per shareLI2015The Nasdaq Stock Market LLC(The Nasdaq Global Select Marke
6、t)The Stock Exchange of Hong Kong LimitedSecurities 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
7、 the issuers classes of capital or common stock as of the close of the period covered by the annual report:Table of Contents1,707,099,212 Class A ordinary shares(excluding the 21,666,682 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upo
8、n the exercise orvesting 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 31,2022.Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of th
9、e Securities Act.Yes NoIf 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 NoNote Checking the box above will not relieve any registrant required to file re
10、ports pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934 from their obligations under thoseSections.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 mont
11、hs(or for suchshorter 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 NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted
12、 pursuant to Rule 405 of Regulation S-T(232.405 of thischapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated file
13、r,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 fi
14、nancial statements in accordance with U.S.GAAP,indicate by check mark if the registrant has elected not to use the extended transition period forcomplying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.The term“new or revised financial ac
15、counting 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 managements assessment of the effectiveness of its internal
16、 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 o
17、f the registrant included in the filing reflect the correction of an error topreviously 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 registrants exec
18、utive officersduring 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 Accounti
19、ng 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 18If this is an annual report,indicate by check mark whether the registrant is a shell company(as defined in
20、 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 subs
21、equent to the distribution ofsecurities under a plan confirmed by a court.Yes NoTable of ContentsiTABLE OF CONTENTSINTRODUCTIONiiFORWARD-LOOKING INFORMATIONivPART I.1ITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERS1ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE1ITEM 3.KEY INFORMATION1ITEM
22、 4.INFORMATION ON THE COMPANY67ITEM 4A.UNRESOLVED STAFF COMMENTS106ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS107ITEM 6.DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES124ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS136ITEM 8.FINANCIAL INFORMATION139ITEM 9.THE OFFER AND LISTING140ITEM 10
23、.ADDITIONAL INFORMATION140ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK152ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES153PART II.158ITEM 13.DEFAULTS,DIVIDEND ARREARAGES AND DELINQUENCIES158ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE
24、 OF PROCEEDS158ITEM 15.CONTROLS AND PROCEDURES159ITEM 16.RESERVED160ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT160ITEM 16B.CODE OF ETHICS160ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES161ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES161ITEM 16E.PURCHASES OF EQUITY SECURITIES BY
25、 THE ISSUER AND AFFILIATED PURCHASERS161ITEM 16F.CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT161ITEM 16G.CORPORATE GOVERNANCE161ITEM 16H.MINE SAFETY DISCLOSURE162ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS162ITEM 16J.INSIDER TRADING POLICIES162PART III.162ITEM 17.FINA
26、NCIAL STATEMENTS162ITEM 18.FINANCIAL STATEMENTS162ITEM 19.EXHIBITS163Table of ContentsiiINTRODUCTIONIn this annual report,unless otherwise indicated or unless the context otherwise requires:“ADAS”refers to advanced driver-assistance systems;“ADRs”refers to the American depositary receipts that evide
27、nce the ADSs;“ADSs”refers to the American depositary shares,each of which represents two Class A ordinary shares of our company;“BOM”refers to bill of materials;“CCASS”refers to the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited,a who
28、lly-ownedsubsidiary of Hong Kong Exchanges and Clearing Limited;“China”or“PRC”refers to the Peoples Republic of China,excluding,for the purpose of this annual report only,Hong Kong,Macau,and Taiwan;“Class A ordinary shares”refers to our Class A ordinary shares with a par value of US$0.0001 per share
29、;“Class B ordinary shares”refers to our Class B ordinary shares with a par value of US$0.0001 per share;“CLTC”refers to China Light-Duty Vehicle Test Cycle;“FOTA”refers to firmware over-the-air,a technology that updates vehicle firmware and software remotely through cloud network;“Hong Kong”refers t
30、o the Hong Kong Special Administrative Region of the Peoples Republic of China;“Hong Kong dollars”or“HK$”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 supplementedfro
31、m 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 des
32、cribing ouroperations 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.hold
33、s direct or indirect equityownership,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;“Macao”refers to the Macao S
34、pecial Administrative Region of the Peoples Republic of China;“Main Board”refers to the stock market(excluding the option market)operated by the Hong Kong Stock Exchange,which is independent from and operated inparallel with the Growth Enterprise Market of the Hong Kong Stock Exchange;Table of Conte
35、ntsiii“Meituan”refers to Meituan,formerly known as Meituan Dianping,a company incorporated in the Cayman Islands and listed on the Main Board of the HongKong Stock Exchange;“NEDC”refers to New European Driving Cycle;“NEVs”refers to new energy passenger vehicles,primarily including(i)“BEVs,”which ref
36、ers to battery electric passenger vehicles,(ii)“EREVs,”which refersto extended-range electric passenger vehicles,and(iii)“PHEVs,”which refers to plug-in hybrid electric passenger vehicles;“NOA”refers to navigation on ADAS;“ordinary shares”or“shares”refers to our Class A ordinary shares and Class B o
37、rdinary shares,par value US$0.0001 per share;“PCAOB”refers to Public Company Accounting Oversight Board,a nonprofit corporation established by the United States Congress to oversee the audits ofpublic companies,among others;“Renminbi”or“RMB”refers to the legal currency of China;“SEC”refers to the Un
38、ited States Securities and Exchange Commission;“SFC”refers to Securities and Futures Commission of Hong Kong;“SUVs”refers to sport utility vehicles;“U.S.dollars”or“US$”refers to the legal currency of the United States;“VIEs”refers to variable interest entities,which are PRC companies conducting busi
39、ness operations in China that have entered into a series of contractualarrangements with their respective shareholders and our PRC subsidiaries and whose financial information has been consolidated into the consolidated financialstatements of Li Auto Inc.under U.S.GAAP for accounting purposes;and“th
40、e VIEs”that Li Auto Inc.consolidates under U.S.GAAP include Beijing CHJInformation Technology Co.,Ltd.,or Beijing CHJ,and Beijing Xindian Transport Information Technology Co.,Ltd.,or Xindian Information;and“WLTC”refers to Worldwide Harmonized Light Vehicles Test Cycle.Any discrepancies in any table
41、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 otherwisestated,all translations from
42、 Renminbi to U.S.dollars were made at a rate of RMB6.8972 to US$1.00,which was the exchange rate in effect as of December 30,2022 as setforth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.The exchange rate in effect as of April 14,2023 was RMB6.8690 to US$1.
43、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.Table of ContentsivFORWARD-LOOKING INFORMATIONThis annual report contains forward-looking statements that reflect our curre
44、nt expectations and views of future events.The forward-looking statements are containedprincipally in“Item 3.Key InformationD.Risk Factors,”“Item 4.Information on the CompanyB.Business Overview,”and“Item 5.Operating and Financial Review andProspects.”These forward-looking statements are made under t
45、he“safe-harbor”provisions of the U.S.Private Securities Litigation Reform Act of 1995.Known and unknownrisks,uncertainties and other factors,including those listed under“Item 3.Key InformationD.Risk Factors,”may cause our actual results,performance,or achievements tobe materially different from thos
46、e 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 expre
47、ssions.We have based these forward-looking statements largely on our currentexpectations 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:
48、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 relations
49、hips with users,suppliers,third-party service providers,strategic partners,and other stakeholders;competition in our industryrelevant government policies and regulations relating to our industry;andgeneral economic and business conditions globally and in China.These forward-looking statements involv
50、e various risks and uncertainties.Although we believe that our expectations expressed in these forward-looking statementsare 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 couldcau
51、se our actual results to be materially different from our expectations are generally set forth in“Item 3.Key InformationD.Risk Factors,”“Item 4.Information on theCompanyB.Business Overview,”“Item 5.Operating and Financial Review and Prospects,”and other sections in this annual report.You should read
52、 thoroughly this annualreport 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 allof our forward-looking statements by these cautionary statements.Table of Contents1PART I.ITEM 1.IDENTIT
53、Y OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERSNot applicable.ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLENot applicable.ITEM 3.KEY INFORMATIONOur Holding Company Structure and Contractual Arrangements with the VIEs and Their ShareholdersThe following diagram illustrates our corporate structure,incl
54、uding our principal subsidiaries and the VIEs,as of the date of this annual report.Note:(1)Certain other subsidiaries include,among others,Chongqing Lixiang Automobile Co.,Ltd.,an indirect wholly-owned subsidiary of Leading Ideal HK Limited(HongKong).Table of Contents2Li Auto Inc.is not a Chinese op
55、erating company but a Cayman Islands holding company with no equity ownership in the VIEs and their subsidiaries.We conduct ouroperations in China through(i)our PRC subsidiaries and(ii)the VIEs,with which we have maintained contractual arrangements,and their subsidiaries.PRC laws andregulations rest
56、rict and impose conditions on foreign investment in value-added telecommunication services and certain other businesses.Accordingly,we operate thesebusinesses in China through the VIEs and their subsidiaries,and rely on contractual arrangements among our PRC subsidiaries,the VIEs,and their nominee s
57、hareholders todirect the business operations of the VIEs.Such structure enables investors to share economic interests in China-based companies in sectors where foreign direct investment isprohibited or restricted under PRC laws and regulations.Revenues contributed by the VIEs accounted for 84.6%,23.
58、3%,and 0%of our total revenues in 2020,2021,and 2022,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 conductedthrough our PRC subsidiaries and the VIEs and consolidated financial informat
59、ion,the VIEs in China,including but not limited to Beijing CHJ Information Technology Co.,Ltd.,or Beijing CHJ,and Beijing Xindian Transport Information Technology Co.,Ltd.,or Xindian Information.Investors in the ADSs are not purchasing equity interest in theVIEs in China but instead are purchasing e
60、quity interest in a holding company incorporated in the Cayman Islands,and may never directly hold equity interests in the VIEs inChina.A series of contractual agreements,including powers of attorney,business operation agreement,equity pledge agreements,exclusive consultation and serviceagreements,a
61、nd equity option agreements,have been entered into by and among our PRC subsidiaries,the VIEs,and their nominee shareholders.Terms contained in each setof these contractual arrangements are substantially similar.As a result of the contractual arrangements,we(i)have the power to direct activities of
62、the VIEs that mostsignificantly affect their economic performance and(ii)receive economic benefits from the VIEs that could be significant to them.Accordingly,Li Auto Inc.is considered theprimary beneficiary of the VIEs and their subsidiaries and has consolidated the financial information of these c
63、ompanies 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 equityownership of,the VIEs,and the contractual arrangements are not equivalent t
64、o an equity ownership in the business of the VIEs.For more details of these contractualarrangements,see“Item 4.Information on the CompanyC.Organizational StructureContractual Arrangements with the VIEs and Their Shareholders.”However,the contractual arrangements may not be as effective as direct own
65、ership in providing us with control over the VIEs and their subsidiaries;the nomineeshareholders 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 VIEstructure involves unique risks to investors of our
66、 Cayman Islands holding company.In addition,the legality and enforceability of the contractual agreements between our PRCsubsidiaries,the VIEs,and their nominee shareholders,as a whole,have not been tested in a court of law in China.See“Item 3.Key InformationD.Risk FactorsRisksRelating to Our Corpor
67、ate StructureWe rely on contractual arrangements with the VIEs and their respective shareholders to maintain a controlling financial interest in theVIEs,which may not be as effective as direct ownership in providing operational control.”and“Item 3.Key InformationD.Risk FactorsRisks Relating to Our C
68、orporateStructureThe registered shareholders of the VIEs may have potential conflicts of interest with us,which may materially and adversely affect our business and financialcondition.”There are also substantial uncertainties regarding the interpretation and application of current and future PRC law
69、s,regulations,and rules regarding the status of therights 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 PRClaws or regulations relating to variable interest entity structures will be ado
70、pted or,if adopted,what they would provide.If we or any of the VIEs is found to be in violation ofany existing or future PRC laws or regulations,or fail to obtain or maintain any of the required licenses,permits,registrations,or approvals,the relevant PRC regulatoryauthorities would have broad discr
71、etion to take action in dealing with such violations or failures.See“Item 3.Key InformationD.Risk FactorsRisks Relating to OurCorporate StructureIf the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment inthe rele
72、vant 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 relinquishour interests in those operations,”and“Item 3.Key InformationD.Risk FactorsRisks Relating to Doing Business in ChinaSubstantial
73、 uncertainties exist with respect tothe interpretation and implementation of the 2019 PRC Foreign Investment Law and its Implementation Rules and how they may impact the viability of our current corporatestructure,corporate governance,and operations.”Table of Contents3Our corporate structure is subj
74、ect to risks associated with our contractual arrangements with the VIEs.If the PRC government deems that our contractualarrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries,or if these regulations or the interpretation ofexisting
75、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.Ourholding company,our PRC subsidiaries,and the VIEs and their subsidiaries,and investors of our company face uncertainty about potenti
76、al future actions by the PRCgovernment that could affect the enforceability of the contractual arrangements with the VIEs and,consequently,significantly affect the financial performance of the VIEs andour company as a whole.The PRC regulatory authorities could disallow the VIE structure,which would
77、likely result in a material change in our operations and cause the valueof 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 InformationD.Risk FactorsRisks Relat
78、ing 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 aresubject to complex and evolving PRC laws and regulations.The PRC government has recently issued stateme
79、nts and carried out regulatory actions relating to areas such as theuse of contractual arrangements in certain industries,regulatory approvals on offshore offerings and listings by,and foreign investment in,China-based issuers,anti-monopolyregulatory actions,and oversight on cybersecurity and data p
80、rivacy.It remains uncertain how PRC government authorities will regulate overseas listing and offering in generaland whether we will be able to complete filing or obtain any specific regulatory approvals from the China Securities Regulatory Commission,or the CSRC,the CyberspaceAdministration of Chin
81、a,or the CAC,or any other PRC government authorities for our overseas offerings and listings,as applicable.In addition,if future regulatory updatesmandate clearance of cybersecurity review or other specific actions to be completed by China-based companies listed on foreign stock exchanges,such as us
82、,we faceuncertainties 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
83、 a United States or another foreign exchange.Theserisks 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 toinvestors,or cause the value of such securities to significantly declin
84、e.For a detailed description of risks relating to doing business in China,“Item 3.D.Key InformationRisk FactorsRisks Relating to Doing Business in China.”The PRC governments significant authority in regulating our operations and its oversight and control over offerings conducted overseas by,and fore
85、ign 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 inthis nature may cause the value of such securities to significantly decline.For more details,see“Item 3
86、.Key InformationD.Risk FactorsRisks Relating to Doing Businessin ChinaThe PRC governments significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value ofour ADSs.”Risks and uncertainties arising from the legal system in Ch
87、ina,including risks and uncertainties regarding the enforcement of laws and quickly evolving rules andregulations in China,could result in a material adverse change in our operations and the value of our Class A ordinary shares and the ADSs.For more details,see“Item 3.KeyInformationD.Risk FactorsRis
88、ks Relating to Doing Business in ChinaUncertainties with respect to the PRC legal system could adversely affect us.”Table of Contents4The Holding Foreign Companies Accountable ActPursuant to the Holding Foreign Companies Accountable Act,or the HFCAA,if the SEC determines that we have filed audit rep
89、orts issued by a registered publicaccounting firm that has not been subject to inspections by the PCAOB for two consecutive years,the SEC will prohibit our shares or ADSs from being traded on a nationalsecurities exchange or in the over-the-counter trading market in the United States.On December 16,
90、2021,the PCAOB issued a report to notify the SEC of its determinationthat the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong,including our auditor.InMay 2022,the SEC conclusively listed us as a Commission-Identif
91、ied Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year endedDecember 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 fromthe list of jurisdictions where it is
92、 unable to inspect or investigate completely registered public accounting firms.For this reason,we do not expect to be identified as aCommission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F.Each year,the PCAOB will determine whether it can inspect and investigateco
93、mpletely registered public accounting firms in mainland China and Hong Kong,among other jurisdictions.If PCAOB determines in the future that it no longer has fullaccess to inspect and investigate completely registered public accounting firms in mainland China and Hong Kong and we continue to use an
94、accounting firm headquartered inone 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 filingof the annual report on Form 20-F for the relevant fiscal year.There can be no assurance tha
95、t we would not be identified as a Commission-Identified Issuer for any future fiscalyear,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 InformationD.RiskFactorsRisks Relating to Our Business and IndustryThe
96、PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for ourfinancial 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
97、D.Risk FactorsRisks Relating to Our Business and IndustryOur ADSs may be prohibited from trading in the United States under the HFCAAin 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 t
98、heADSs,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 OperationsWe conduct our business primarily through our subsidiaries and the VIEs in China.Our operations in China are governed by PRC
99、laws and regulations.As of the dateof 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 arematerial for the business operations of our subsidiaries and the VIEs and their subsidiaries
100、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 OperatingLicense for Information Service(excluding internet information s
101、ervice),an Internet Culture Business Permit,and an Operating License for the Production and Disseminationof Radio and Television Programs.Given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by relevantgovernment authorities,we ma
102、y 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 InformationD.Risk FactorsRisks Relating to Our Business and IndustryWe may be adversely affected by the complexity,uncertainties,and changes
103、 inPRC 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,ourPRC subsidiaries,and the VIEs(i)are not required to obtain
104、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.Table of Contents5However,the PRC government has recently promulgated certain regulations and rules to exert
105、more oversight and control over offerings that are conducted overseasby,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 acybersecurity review conducted by the CAC,or meet other regulatory requir
106、ements that may be adopted in the future by PRC regulatory authorities.To the extent suchrequirements 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 inobtaining the required approval or complet
107、ing the required procedures could subject us to restrictions and penalties imposed by the CSRC,the CAC,or other PRC regulatoryauthorities,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 intoC
108、hina,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 ClassA ordinary shares or the ADSs.For more detailed information,see“Item 3.Key InformationD.Risk FactorsRisks Relating to Doing B
109、usiness in ChinaThe PRCgovernments 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 orADSs.”Cash and Asset Flows Through Our OrganizationLi Auto Inc.is a Cayman Islands holding company with
110、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 shareholder
111、s 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 pa
112、y 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 requ
113、ired 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 Prospect
114、sLiquidity and Capital ResourcesHolding Company Structure.”Uncertainties regarding the interpretation and implementation of the contractual arrangements with the VIEs could limit our ability to enforce such agreements.If thePRC government deems that our contractual arrangements constituting part of
115、the VIE structure do not comply with PRC laws and regulations,or if current laws andregulations 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
116、 the VIEs and their subsidiaries are subject to certain restrictions with respect to payment of dividends orotherwise 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 banksdesignated by the PRC
117、State Administration of Foreign Exchange,or the SAFE.These restrictions are benchmarked against the paid-up capital and the statutory reserve fundsof our PRC subsidiaries and the net assets of the VIEs in which we have no legal ownership.As of December 31,2020,2021,and 2022,the total amount of such
118、restriction towhich our PRC subsidiaries and the VIEs and their subsidiaries are subject was RMB7.6 billion,RMB11.4 billion,and RMB9.5 billion(US$1.4 billion),respectively.For risksrelating to the fund flows of our operations in China,see“Item 3.Key InformationD.Risk FactorsRisks Relating to Doing B
119、usiness in ChinaWe may rely on dividendsand 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 PRCsubsidiaries to make payments to us could have a material and adverse effect on our ability
120、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 31,2020,2021
121、,and 2022,the outstanding balance of the principalamount of loans by Li Auto Inc.to our intermediate holding companies,subsidiaries and the VIEs was RMB14.1 billion,RMB23.8 billion,and RMB48.0 billion(US$7.0billion),respectively.Table of Contents6Current PRC regulations permit our PRC subsidiaries,i
122、ncluding Beijing Co Wheels Technology Co.,Ltd.,or Wheels Technology,to pay dividends to us only out oftheir accumulated profits,if any,determined in accordance with PRC accounting standards and regulations.In addition,each of our PRC subsidiaries,the VIEs and their PRCsubsidiaries are required to se
123、t aside at least 10%of their respective accumulated profits each year,if any,to fund certain reserve funds until the total amount set aside reaches50%of their respective registered capital.Our PRC subsidiaries and the VIEs and their subsidiaries may also allocate a portion of their after-tax profits
124、 based on PRCaccounting standards to employee welfare and bonus funds at their discretion.These reserves are not distributable as cash dividends.Furthermore,if Wheels Technology incursdebt on its own behalf in the future,the instruments governing the debt may restrict its ability to pay dividends or
125、 make other payments to us.In addition,the PRC taxauthorities 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 affectWheels Technologys ability to pay dividends and other distributions to us.Any
126、limitation on the ability of our PRC subsidiaries,including Wheels Technology,to distributedividends to us or on the ability of the VIEs to make payments to Wheels Technology may restrict our ability to satisfy our liquidity requirements.Taxation on Dividends or DistributionsLi Auto Inc.s source of
127、dividend partly comes from dividends paid by its PRC subsidiaries,including Wheels Technology,which in part depends on paymentsreceived 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 intendto p
128、ay 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 andgrowth of our business.The undistributed earnings that are subject to dividend tax are expected to be indefinitely reinvested for th
129、e foreseeable future.See“Item 8.FinancialInformationA.Consolidated Statements and Other Financial InformationDividend Policy.”For PRC and United States federal income tax considerations of an investmentin our ADSs,see“Item 10.Additional InformationE.Taxation.”Under the current laws of the Cayman Isl
130、ands,Li Auto Inc.is not subject to tax on income or capital gains.Upon payments of dividends to our shareholders,noCayman Islands withholding tax will be imposed.For purposes of illustration,the following discussion reflects the hypothetical taxes that might be required to be paid withinmainland Chi
131、na,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 distri
132、bution 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 incomein China.(2)Under the terms of the VIE agreements,our PRC subsidiaries m
133、ay charge the VIEs for services provided to VIEs.These service fees shall be recognized as expenses of the VIEs,with acorresponding 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 ase
134、parate 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.However,such rate is subject to qualification,is tempo
135、rary in nature,and may not beavailable 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 wouldbe effective.(4)The PRC Enterprise Income Tax Law imposes a withholding income tax
136、of 10%on dividends distributed by a foreign invested enterprise,or FIE,to its immediate holding company outsideof China.A lower withholding income tax rate of 5%is applied if the FIEs immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangementwith C
137、hina,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 fullwithholding tax would be applied.Table of Contents7The table above has been prepared under the assumption that all profi
138、ts of the VIEs will be distributed as fees to our PRC subsidiaries under tax neutral contractualarrangements.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 structurebetween the intercompany entities is
139、 determined to be non-substantive and disallowed by PRC tax authorities),the VIEs could make a non-deductible transfer to our PRCsubsidiaries 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 th
140、ePRC subsidiaries.Such a transfer and the related tax burdens would reduce our after-tax income to approximately 50.6%of the pre-tax income.Our management believes thatthere is only a remote possibility that this scenario would happen.As of December 31,2022,the VIEs and its subsidiaries were in the
141、accumulated deficit position,therefore,the VIEs and its subsidiaries did not pay any service feesto Wheels Technology.Financial Information Relating to the VIEsThe following tables present the condensed consolidating schedules for our consolidated variable interest entities and other entities for th
142、e years and as of the datesindicated.Condensed Consolidated Statements of Loss InformationFor the Year Ended December 31,2022 Primary VIEs and Li AutoOtherBeneficiaryVIEsEliminatingConsolidatedInc.Subsidiariesof VIEsSubsidiariesAdjustmentsTotals(RMB in thousands)Third-party revenues(1)45,286,816 45,
143、286,816Inter-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)3,5
144、89,301Share 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 expenses(2,012,212)(2,446,907)1,313,831 670,911 315,022(2,159,355)Income tax(expense)/benefit(3)126,23
145、6 (7,927)8,701 127,007Net(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
146、 Ended December 31,2021 Primary VIEs and Li AutoOtherBeneficiaryVIEsEliminatingConsolidatedInc.Subsidiariesof VIEsSubsidiariesAdjustmentsTotals(RMB in thousands)Third-party revenues 20,715,104 6,294,675 27,009,779Inter-company revenues(2)5,891,611 2,471,182 22,287,788 (30,650,581)Third-party cost (9
147、92,755)(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,
148、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 expenses (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,
149、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)Table of Contents8 For the Year Ended December 31,2020 Primary VIEs and Li AutoOtherBeneficiaryVIEsEliminatingConsolidatedInc.Subsidiariesof VIEsSubsidiariesAdjustmentsTotals(RM
150、B in thousands)Third-party revenues 1,455,542 8,001,067 9,456,609Inter-company revenues(2)7,877,944 746,071 8,553,798 (17,177,813)Third-party cost (92,933)(23,751)(7,790,586)(7,907,270)Inter-company cost (7,682,609)(7,877,944)15,560,553 Third-party expenses(9,424)(374,899)(475,846)(1,358,507)(2,218,
151、676)Inter-company expenses (1,575,267)(25,858)1,601,125 Share of loss from subsidiaries and VIEs(3)(520,093)(188,821)(489,716)(1,179)1,199,809 Other income 377,860 59,771 340 40,309 2,180 480,460Loss before income tax expenses(151,657)(521,272)(242,902)(458,900)1,185,854 (188,877)Income tax benefit/
152、(expense)59,156 (36,309)22,847Net loss from continuing operations(151,657)(521,272)(183,746)(495,209)1,185,854 (166,030)Net income from discontinued operations,net of tax 14,373 14,373Net loss(151,657)(521,272)(183,746)(480,836)1,185,854(151,657)Accretion on convertible redeemable preferred shares t
153、o redemption value(651,190)(651,190)Effect of exchange rate changes on convertible redeemable preferred shares 10,862 10,862Less:Net loss attributable to noncontrolling interests (1,179)(5,075)6,254 Net loss attributable to shareholders of Li Auto Inc.(791,985)(520,093)(183,746)(475,761)1,179,600 (7
154、91,985)Condensed Consolidated Balance Sheet InformationFor the Year Ended December 31,2022 Primary VIEs and Li AutoOtherBeneficiaryVIEsEliminatingConsolidatedInc.Subsidiariesof VIEsSubsidiariesAdjustmentsTotals(RMB in thousands)Cash and cash equivalents 974,224 18,971,899 2,238 18,529,655 38,478,016
155、Restricted cash 962,796 977,346 1,940,142Time deposits and short-term investments 2,195,952 7,491,111 8,344,332 18,031,395Trade receivable 48,381 48,381Amounts due from the Group companies(5)47,993,884 61,113,464 8,058,719 37,885,882 (155,051,949)Inventories(4)6,804,439 254 6,804,693Prepayments and
156、other current assets 3,132 1,492,750 25,818 168,160 1,689,860Investments 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 1,484,491Property,plant and equipment,net(4)18 10,918,971 120,001 10
157、1,577 47,331 11,187,898Operating lease right-of-use assets,net 2,808,503 37,297 693,111 3,538,911Intangible assets,net(4)363,510 290,654 740,570 (562,114)832,620Goodwill 5,484 5,484Deferred tax assets,non-current 74,767 74,767Other non-current assets 1,760,306 77,020 583,967 2,421,293Total assets 51
158、,180,178 121,124,913 12,587,851 68,167,393 (166,522,384)86,537,951Short-term borrowings 6,965 383,785 390,750Trade and notes payable 18,652,642 48,491 1,323,196 20,024,329Amounts 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
159、,190Deferred revenue,current 569,234 569,234Operating lease liabilities,current 634,383 21,364 40,707 696,454Accruals and other current liabilities 59,533 4,800,392 490,386 334,333 5,684,644Deferred revenue,non-current 581,598 581,598Long-term borrowings 6,254,979 2,475,828 500,000 9,230,807Operatin
160、g lease liabilities,non-current 1,194,533 13,161 738,673 1,946,367Deferred tax liabilities,non-current 74,830 2,979 77,809Other non-current liabilities 2,134,692 50 7,720 2,142,462Total liabilities 6,321,477 122,634,084 5,223,881 63,487,145 (156,314,943)41,351,644Total shareholders equity 44,858,701
161、 (1,509,171)7,363,970 4,680,248 (10,207,441)45,186,307Total liabilities and shareholders equity 51,180,178 121,124,913 12,587,851 68,167,393 (166,522,384)86,537,951Table of Contents9For the Year Ended December 31,2021 Primary VIEs and Li AutoOtherBeneficiaryVIEsEliminatingConsolidatedInc.Subsidiarie
162、sof VIEssubsidiariesadjustmentstotals(RMB in thousands)Cash and cash equivalents 14,762,875 7,778,303 1,246 5,311,800 27,854,224Restricted cash 222,899 2,415,941 2,638,840Time deposits and short-term investments 7,020,662 4,321,036 8,326,541 19,668,239Trade receivable 17,137 348 103,056 120,541Amoun
163、ts due from the Group companies(5)23,763,053 32,475,611 2,160,737 23,402,104 (81,801,505)Inventories(4)225,739 1,396,992 (4,841)1,617,890Prepayments and other current assets 10,211 202,098 47,969 220,402 480,680Investments in subsidiaries(3)890,788 4,082,357 (4,973,145)Investments in VIEs and VIEs s
164、ubsidiaries(3)2,743,171 (2,743,171)Long-term investments 28,452 30,000 97,854 156,306Property,plant and equipment,net(4)2,059,011 73,871 2,329,507 35,880 4,498,269Operating lease right-of-use assets,net 1,274,429 55,189 731,874 2,061,492Intangible assets,net(4)67,467 897,107 703,274 (916,388)751,460
165、Deferred tax assets,non-current 11,969 7,927 19,896Other non-current assets 854,214 19,188 1,107,674 1,981,076Total assets 46,476,041 53,622,270 6,006,753 46,147,019 (90,403,170)61,848,913Short-term borrowings 5,495 31,547 37,042Trade and notes payable 782,323 46,546 8,547,181 9,376,050Amounts due t
166、o the Group companies(5)48,287,134 1,547,360 31,999,140 (81,833,634)Amounts due to related parties 30,000 6,178 1,277 37,455Deferred revenue,current 305,092 305,092Operating lease liabilities,current 365,967 26,672 80,606 473,245Accruals and other current liabilities 13,798 1,074,630 275,904 515,036
167、 1,879,368Deferred revenue,non-current 380,949 8,704 389,653Long-term borrowings 5,397,941 83,505 479,453 5,960,899Operating lease liabilities,non-current 629,939 20,258 719,628 1,369,825Deferred tax liabilities,non-current 153,723 153,723Other non-current liabilities 786,448 1,478 14,333 802,259Tot
168、al liabilities 5,411,739 52,731,482 1,924,396 42,550,628 (81,833,634)20,784,611Total shareholders equity 41,064,302 890,788 4,082,357 3,596,391 (8,569,536)41,064,302Total liabilities and shareholders equity 46,476,041 53,622,270 6,006,753 46,147,019 (90,403,170)61,848,913Condensed Consolidated Cash
169、Flow Information For the Year Ended December 31,2022 Primary VIEs and Li AutoOtherBeneficiaryVIEsEliminatingConsolidatedInc.Subsidiariesof VIEsSubsidiariesAdjustmentsTotals(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 b
170、y/(used in)other transactions 450,587 20,590,505 (2,738,637)(10,922,189)7,380,266Net cash provided by/(used in)operating activities 450,517 17,705,848 (2,688,318)(8,087,781)7,380,266Inter-company loan financing to group companies(7)(23,397,234)(23,424,257)46,821,491 Other investing activities with e
171、xternal 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
172、external entities 2,789,778 1,250,737 1,598,877 5,639,392Net cash provided by financing activities 2,789,778 24,647,971 3,006,631 22,016,503 (46,821,491)5,639,392Table of Contents10For the Year Ended December 31,2021 Primary VIEs and Li AutoOtherBeneficiaryVIEsEliminatingConsolidatedInc.Subsidiaries
173、of VIEsSubsidiariesAdjustmentsTotals(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)8,340,385Net cash provided by/(used in)operating activities 367,06
174、3 9,833,126 (507,945)(1,351,859)8,340,385Inter-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)(8,64
175、1,045)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 16,709,533Net cash provided by financing activities 16,539,225 10,246,678 564,358 14,940,274 (25,581,00
176、2)16,709,533For the Year Ended December 31,2020 Primary VIEs and Li AutoOtherBeneficiaryVIEsEliminatingConsolidatedInc.Subsidiariesof VIEssubsidiariesadjustmentsTotals(RMB in thousands)Net cash(used in)/provided by inter-company transactions(6)(2,813,046)618,704 2,194,342 Net cash provided by/(used
177、in)other transactions 109,961 2,111,172 (427,398)1,346,069 3,139,804Net cash provided by/(used in)operating activities 109,961 (701,874)191,306 3,540,411 3,139,804Inter-company loan financing to group companies(7)(10,006,889)(602,462)(701,169)11,310,520 Other investing activities with external entit
178、ies(14,451,131)(2,550,950)(69,662)(1,665,982)(18,737,725)Net cash used in by investing activities(24,458,020)(3,153,412)(770,831)(1,665,982)11,310,520 (18,737,725)Inter-company loan financing from group companies(7)10,006,889 508,336 795,295 (11,310,520)Other financing activities with external entit
179、ies 24,876,674 (21,277)(144,700)24,710,697Net cash provided by financing activities 24,876,674 9,985,612 508,336 650,595 (11,310,520)24,710,697Notes:(1)Third-party revenues were solely generated from sales of vehicles to customers by certain of the VIE subsidiaries before the 2021 Reorganization.No
180、third-party revenues were generated bythe VIEs in 2022 as these same VIE subsidiaries have become equity owned/controlled subsidiaries after the 2021 Reorganization.(2)It represents the elimination of the inter-company technical service fees,inter-company sales of vehicles and inter-company transfer
181、 of intangible assets.(3)It represents the elimination of the investment in VIEs and our subsidiaries by the Parent.(4)It represents the elimination of the unrealized profit from inter-company sales of vehicles and inter-company transfer of assets.(5)It represents the elimination of intercompany bal
182、ances among parent,VIEs and our subsidiaries.As of December 31,2020,2021,and 2022,there were no balances for management feescharged to VIEs.The amounts due from group companies represent the funds provided by the consolidated VIEs to the WFOEs and the operating receivables resulting from the provisi
183、on ofgoods and services to WFOEs.The amounts due to group companies represent the funds provided by group companies to the consolidated VIEs and the operating payables resulting from thetechnical service fees charged by WFOEs.(6)For the years ended December 31,2020,2021,and 2022,cash paid by subsidi
184、aries to VIEs for technical service fees,inter-company sales of vehicles and inter-company transfer of intangibleassets were RMB2.2 billion,RMB7.3 billion,and RMB2.8 billion,respectively.For the years ended December 31,2020,2021,and 2022,no management fees were paid by VIEs to WheelsTechnology as ea
185、ch of the VIEs was in an accumulated deficit as of December 31,2022(pursuant to each management fee arrangement with the VIEs).(7)For the years ended December 31,2020,2021,and 2022,inter-company loan financing paid by subsidiaries to VIEs were RMB795.3 million,RMB14.9 billion,and RMB20.4 billion,res
186、pectively.Table of Contents11A.ReservedSelected Financial DataThe following selected consolidated statements of comprehensive loss data and selected consolidated cash flow data for the years ended December 31,2020,2021,and 2022 and the selected consolidated balance sheet data as of December 31,2021
187、and 2022 have been derived from our audited consolidated financial statements,which areincluded 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 yearsended December 31,2018 and 2019 and the se
188、lected consolidated balance sheet data as of December 31,2018,2019,and 2020 have been derived from our auditedconsolidated financial statements that are not included in this annual report.Our historical results are not necessarily indicative of results expected for future periods.Youshould read this
189、 selected financial data together with our consolidated financial statements and the related notes and information under“Item 5.Operating and FinancialReview and Prospects”in this annual report.Our consolidated financial statements are prepared and presented in accordance with accounting principles
190、generally accepted inthe United States of America,or U.S.GAAP.The following table sets forth our selected consolidated statements of comprehensive loss data for the years indicated.For the Year Ended December 31,200212022 RMB RMB RMB RMB RMB US$(in thousands,except for share and per share
191、 data)Selected Consolidated Statements of Loss Data:Revenues:Vehicle sales 280,967 9,282,703 26,128,469 44,106,434 6,394,832Other sales and services 3,400 173,906 881,310 1,180,382 171,139Total revenues 284,367 9,456,609 27,009,779 45,286,816 6,565,971Cost of sales(1):Vehicle sales (279,555)(7,763,6
192、28)(20,755,578)(35,688,343)(5,174,323)Other sales and services (4,907)(143,642)(492,747)(808,017)(117,151)Total cost of sales (284,462)(7,907,270)(21,248,325)(36,496,360)(5,291,474)Gross(loss)/profit (95)1,549,339 5,761,454 8,790,456 1,274,497Operating expenses:Research and development(1)(793,717)(1
193、,169,140)(1,099,857)(3,286,389)(6,780,032)(983,012)Selling,general and administrative(1)(337,200)(689,379)(1,118,819)(3,492,385)(5,665,301)(821,391)Total operating expenses (1,130,917)(1,858,519)(2,218,676)(6,778,774)(12,445,333)(1,804,403)Loss from operations (1,130,917)(1,858,614)(669,337)(1,017,3
194、20)(3,654,877)(529,906)Other(expense)/income (34,379)(559,260)480,460 864,508 1,495,522 216,830Loss before income tax expense (1,165,296)(2,417,874)(188,877)(152,812)(2,159,355)(313,076)Net loss (1,532,318)(2,438,536)(151,657)(321,455)(2,032,348)(294,662)Net loss attributable to ordinary shareholder
195、s of Li Auto Inc.(1,849,638)(3,281,607)(791,985)(321,455)(2,012,215)(291,743)Weighted average number of ordinary shares used in computing netloss per share Basic and diluted 255,000,000 255,000,000 870,003,278 1,853,320,448 1,941,230,998 1,941,230,998Net loss per share attributable to ordinary share
196、holders Basic and diluted (7.25)(12.87)(0.91)(0.17)(1.04)(0.15)Net loss (1,532,318)(2,438,536)(151,657)(321,455)(2,032,348)(294,662)Total other comprehensive income/(loss),net of tax 12,954 2,851 (1,020,728)(516,687)1,327,761 192,507Total comprehensive loss,net of tax (1,519,364)(2,435,685)(1,172,38
197、5)(838,142)(704,587)(102,155)Comprehensive loss attributable to ordinary shareholders of Li AutoInc.(1,836,684)(3,278,756)(1,812,713)(838,142)(684,454)(99,236)Note:(1)Share-based compensation expenses were allocated as follows:Table of Contents12As of December 31,200212022 RMB RMB RMB RMB
198、 RMB US$(in thousands)Cost of sales 1,515 26,713 44,845 6,502Research and development expenses 60,789 741,793 1,333,710 193,370Selling,general and administrative expenses 80,491 332,850 674,610 97,809Total 142,795 1,101,356 2,053,165 297,681The following table sets forth our selected consolidated ba
199、lance sheet data as of the dates indicated.As of December 31,200212022 RMB RMB RMB RMB RMB US$(in thousands)Selected Consolidated Balance Sheet Data:Cash and cash equivalents 70,192 1,296,215 8,938,341 27,854,224 38,478,016 5,578,788Restricted cash 25,000 140,027 1,234,178 2,638,840 1,940
200、,142 281,294Time deposits and short-term investments 859,913 2,272,653 19,701,382 19,668,239 18,031,395 2,614,307Total assets 5,780,940 9,513,422 36,373,276 61,848,913 86,537,951 12,546,825Total liabilities 2,977,676 4,932,291 6,569,679 20,784,611 41,351,644 5,995,426Total mezzanine equity 5,199,039
201、 10,255,662 Total shareholders(deficit)/equity (2,395,775)(5,674,531)29,803,597 41,064,302 45,186,307 6,551,399Total liabilities,mezzanine equity and shareholders(deficit)/equity 5,780,940 9,513,422 36,373,276 61,848,913 86,537,951 12,546,825The following table sets forth our selected consolidated c
202、ash flow data for the years indicated.For the Year Ended December 31,200212022 RMB RMB RMB RMB RMB US$(in thousands)Selected Consolidated Cash Flow Data:Net cash(used in)/provided by operating activities (1,346,805)(1,793,710)3,139,804 8,340,385 7,380,266 1,070,038Net cash used in investi
203、ng activities (191,512)(2,574,836)(18,737,725)(4,257,244)(4,364,661)(632,816)Net cash provided by financing activities 1,108,658 5,655,690 24,710,697 16,709,533 5,639,392 817,635Effects of exchange rate changes on cash and cash equivalentsand restricted cash 3,299 53,722 (376,646)(472,129)1,270,097
204、184,146Net(decrease)/increase in cash,cash equivalents and restrictedcash (426,360)1,340,866 8,736,130 20,320,545 9,925,094 1,439,003Cash,cash equivalents and restricted cash at the beginning ofthe year 521,883 95,523 1,436,389 10,172,519 30,493,064 4,421,079Cash,cash equivalents and restricted cash
205、 at the end of theyear 95,523 1,436,389 10,172,519 30,493,064 40,418,158 5,860,082B.Capitalization and IndebtednessNot applicable.C.Reasons for the Offer and Use of ProceedsNot applicable.Table of Contents13D.Risks FactorsSummary of Risk FactorsAn investment in our ADSs or Class A ordinary shares in
206、volves significant risks.Below is a summary of material risks that we face,organized under relevantheadings.These risks are discussed more fully in“Item 3.Key InformationD.Risk Factors.”Risks Relating to Our Business and IndustryWe have a limited operating history and face significant challenges as
207、a new entrant into our industry.Our ability to develop,manufacture,and deliver automobiles of high quality and appeal to users,on schedule,and on a large scale is unproven and still evolving.We currently and in the foreseeable future depend on revenues generated from a limited number of vehicle mode
208、ls.We are subject to risks associated with EREVs.We had negative net cash flows from operations in the past and have not been profitable,which may continue in the future.Our vehicles may not perform in line with user expectations and may contain defects.We may not be successful in the highly competi
209、tive China automotive market.Our research and development efforts may not yield the results as expected.We could experience disruptions in supply of raw materials or components used in our vehicles from our third-party suppliers,some of which are our single-source suppliers for the components they s
210、upply.Our business is subject to various evolving PRC laws and regulations regarding data privacy and cybersecurity.Failure of cybersecurity and data privacyconcerns could subject us to penalties,damage our reputation and brand,and harm our business and results of operations.Risks Relating to Our Co
211、rporate StructureWe are a Cayman Islands holding company with no equity ownership in the VIEs and 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.Investors in our Class A ordinary shares o
212、r the ADSs thus are notpurchasing equity interest in the VIEs in China but instead are purchasing equity interest in a Cayman Islands holding company.If the PRC government deemsthat our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the
213、 relevant industries,or if theseregulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests inthose operations.Our holding company in the Cayman Islands,the VIEs,and investors of our company face unce
214、rtainty about potential future actions by the PRCgovernment that could affect the enforceability of the contractual arrangements with the VIEs and,consequently,significantly affect the financial performance ofour consolidated VIEs and our company as a group.We rely on contractual arrangements with t
215、he VIEs and their respective shareholders to maintain a controlling financial interest in the VIEs,which may not be aseffective as direct ownership in providing operational control.Our ability to enforce the equity pledge agreements between us and the VIEs shareholders may be subject to limitations
216、based on PRC laws and regulations.Table of Contents14Risks Relating to Doing Business in ChinaChanges in Chinas economic,political,or social conditions,or government policies could have a material and adverse effect on our business and results ofoperations.Uncertainties with respect to the PRC legal
217、 system could adversely affect us.The PRC governments oversight and discretion over our business operations could result in a material adverse change in our operations and the value of ourClass A ordinary shares or ADSs.Substantial uncertainties exist with respect to the interpretation and implement
218、ation of the 2019 PRC Foreign Investment Law and its Implementation Rules andhow they may impact the viability of our current corporate structure,corporate governance,and operations.We may be adversely affected by the complexity,uncertainties,and changes in PRC regulations on automotive and internet
219、-related businesses and companies.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 thePCAOB to conduct inspections of our auditor in the past had deprived our investors with the benefits of such
220、inspections.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 completelyregistered public accounting firms located in mainland China and Hong Kong.The delisting of the ADSs,or the threat of their being delisted
221、,may materially andadversely affect the value of your investment.Risks Relating to our ADSs and Class A Ordinary SharesThe trading price of our Class A ordinary shares or ADSs has been and may be volatile,which could result in substantial losses to investors.Our dual-class voting structure will limi
222、t your ability to influence corporate matters and could discourage others from pursuing any change of control transactionsthat holders of our Class A ordinary shares or ADSs may view as beneficial.Risks Relating to Our Business and IndustryWe have a limited operating history and face significant cha
223、llenges as a new entrant into our industry.We were founded in 2015,started volume production of our first vehicle model in November 2019,and delivered over 257,334 vehicles as of December 31,2022.There is limited historical basis for making judgments on the demand for our vehicles or our ability to
224、develop,manufacture,and deliver vehicles,or our profitability in thefuture.It is difficult to predict our future revenues and appropriately budget for our expenses,and we may have limited insight into trends that may emerge and affect ourbusiness,particularly when we introduce all new models or adop
225、t technologies where we have less experience,such as BEVs or BEV technologies.You should consider ourbusiness and prospects in light of the risks and challenges that we face as a new entrant into our industry,including with respect to our ability to continually advance our NEVtechnologies such as ER
226、EV and HPC BEV technologies,develop and manufacture safe,reliable,and quality vehicles that appeal to users,achieve vehicle delivery andservicing in a large volume,turn profitable,build a well-recognized and respected brand cost-effectively,expand our vehicle lineup,navigate the evolving regulatorye
227、nvironment,improve and maintain our operating efficiency,manage supply chain effectively,adapt to changing market conditions,including technological developments andchanges in competitive landscape,and manage our growth effectively.We may adjust our strategies and plans from time to time to remain c
228、ompetitive as a new entrant into ourindustry.If we fail to address any or all of these risks and challenges,our business may be materially and adversely affected.Table of Contents15Our ability to develop,manufacture,and deliver automobiles of high quality and appeal to users,on schedule,and on a lar
229、ge scale is unproven and still evolving.The sustainability of our business depends,in large part,on our ability to timely execute our plan to develop,manufacture,and deliver on a large scale automobiles ofhigh quality and appeal to users.Our vehicles are produced in our own manufacturing bases,and t
230、he production volume can be increased with our increased efficiency andtechnological capabilities.However,our production capacity may not be sufficient to meet the future demand of our vehicles.To date we have limited automobilemanufacturing experience to balance production volume and vehicle qualit
231、y and appeal,and therefore cannot assure you that we will be able to achieve our targeted productionvolume of commercially viable vehicles on a timely basis,or at all.Our continued development,manufacturing,and delivery of automobiles of high quality to achieve our targeted production volume are and
232、 will be subject to risks,including with respect to:lack of necessary funding;delays or disruptions in our supply chain;delays in the research and development of technologies necessary for our vehicles;quality control deficiencies;compliance with environmental,workplace safety,and relevant regulatio
233、ns;andcost overruns.Historically,automakers are expected to periodically introduce new and improved models to stay abreast of the market.To remain competitive,we may be required tointroduce new vehicle models and perform facelifts on existing vehicle models earlier or more frequently than is origina
234、lly planned.We cannot assure you that facelifts on ourexisting models or any future models we launch will appeal to the users as we expect or that any introduction of new models or facelifts will not affect the sales of existingmodels.Furthermore,we rely mostly on third-party suppliers for the provi
235、sion and development of many of the key components and materials used in our vehicles.To theextent our suppliers experience any difficulties in providing us with or developing necessary components,we could experience delays in delivering vehicles.Any delay in thedevelopment,manufacturing,and deliver
236、y of our existing or future models,or in performing facelifts to existing models,could subject us to user complaints and materially andadversely affect our reputation,demand for our vehicles,and our growth prospects.Any of the foregoing could materially and adversely affect our business,financialcon
237、dition,and results of operations.We currently and in the foreseeable future depend on revenues generated from a limited number of vehicle models.Although we already have established a multi-model product line,we currently and in the foreseeable future depend substantially on the sales and success of
238、 a limitednumber of vehicle models.Our current product line comprises large and full-size SUVs with similar exterior designs,which may not appeal to certain consumers.To the extentour product variety,design,and cycles do not meet consumer expectations,or cannot be achieved on our projected timelines
239、 and cost and volume targets,our future sales maybe adversely affected.Given that for the foreseeable future our business will depend on a limited number of vehicle models,to the extent a particular model,such as ourplanned HPC BEV model,is not timely launched or well-received by the market,our sale
240、s volume could be materially and adversely affected,which in turn could materiallyand adversely affect our business,financial condition,and results of operations.Our vehicles are designed and manufactured for Chinese families,and this is likely the case in the foreseeable future.If the demand for ou
241、r vehicles significantlydecreases,due to a significant change in the average spending power of Chinese families,significant decrease in the number of Chinese families,mismatched marketpositioning,or other reasons,our business,financial condition,results of operations,and prospects could be materiall
242、y and adversely affected.Table of Contents16In addition,our current pricing model may not be as effective as intended.While we are providing more personalized configurations in our recent vehicle models,wegenerally provide premium and technology features that are typically offered as costly add-ons
243、by our competitors as standard in our vehicles to save users time and moneywhile alleviating our burden in production,sales,and support.However,we cannot assure you that such endeavors will succeed.Users may prefer more personalized featuresbased on diverse tastes and needs.In addition,our pricing r
244、ange,which targets the premium segment of the market,could still exceed certain users budget significantly.To theextent that we are unable to meet various user needs in promoting current pricing model for our vehicles,our business may be materially and adversely affected.We are subject to risks asso
245、ciated with EREVs.EREV technologies are advanced technologies with limited instances of successful commercialization.We cannot assure you that EREVs will continue to be acceptedby the market.Moreover,our business and future results of operations will depend on our ability to continue to develop our
246、EREV technologies and improve the performanceand efficiency in a cost-effective and timely manner.Our research and development efforts may not be sufficient to adapt to changes in the EREV technologies as well asdevelopments in other NEV technologies,including BEV technologies,which may reduce the c
247、ompetitive advantages of EREV technology.As technologies evolve,we plan toupgrade or adapt our vehicles and introduce new models with the latest technologies,including EREV technologies.This will require us to invest resources in research anddevelopment and to cooperate effectively on new designs wi
248、th our suppliers,develop actionable insights from data analysis and user feedback,and respond effectively totechnological changes and policy and regulatory developments.As a pioneer to successfully commercialize EREVs in China,we have limited experience to date in volume production of EREVs.We canno
249、t assure you that we willbe 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,as well as the production volumes to satisfy the market dema
250、nd for our existing and future models.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 notconvinced of the technical and functional superiority of EREVs.Any defects in or significant malfu
251、nctioning of the range extension system,or any negative perceptions ofEREVs with or without any grounds,may weaken consumer confidence in EREVs,cause safety concerns among consumers,and negatively impact our brand name,financialcondition,and results of operations.Similarly,suppliers and other third
252、parties will be less likely to invest time and resources in developing business relationships with us ifthey are not convinced that our business will succeed.We had negative net cash flows from operations in the past and have not been profitable,which may continue in the future.We have not been prof
253、itable since our inception.We incurred net losses of RMB151.7 million,RMB321.5 million,and RMB2.0 billion(US$294.7 million)in 2020,2021,and 2022,respectively.Although we had positive net cash flows from operating activities of RMB3.1 billion,RMB8.3 billion,and RMB7.4 billion(US$1.1 billion)in2020,20
254、21,and 2022,respectively,we had negative net cash flows from operating activities in prior years.We made capital expenditures of RMB675.2 million,RMB4.0billion,and RMB5.1 billion(US$743.5 million)in 2020,2021,and 2022,respectively.The pressure on us to maintain positive cash flow may be exacerbated
255、by ourcontractual obligations,including capital commitments,operating lease obligations,purchase obligations,finance leases and borrowings.We expect to continue to invest inresearch and development,production ramp-up of our new models,development of our manufacturing bases,and expansion of retail st
256、ores,galleries,and delivery andservicing centers to further expand our business.These investments may not result in revenue increase,or at all,and we may have negative net cash flows from operations inthe future.We may not generate sufficient revenues or continue to incur substantial losses for a nu
257、mber of reasons,including lack of demand for our vehicles,increasingcompetition,and other risks discussed herein,and we may incur unforeseen expenses,or encounter difficulties,complications,or delays in deriving revenues or achievingprofitability.Our vehicles may not perform in line with user expect
258、ations and may contain defects.Our vehicles may not perform in line with user expectations.Any product defects or any other failure of our vehicles to perform or operate as expected could harm ourreputation and result in negative publicity,lost revenue,delivery delays,product recalls,product liabili
259、ty claims,harm to our brand,and significant expenses includingwarranty and other items that could materially and adversely affect our business,financial condition,results of operations,and prospects.Table of Contents17Our vehicles may contain design and manufacturing defects.The design and manufactu
260、ring of our vehicles are complex and could contain latent defects and errors,which may cause our vehicles not to perform or operate as expected or even result in property damage or personal injuries.Furthermore,our vehicles use a substantial amountof third-party and in-house software codes and compl
261、ex hardware to operate.We rely mostly on third-party suppliers for the provision and development of many of the keycomponents and materials used in our vehicles.Advanced technologies are inherently complex,and defects and errors may be revealed over time.Our control over the long-term consistent per
262、formance of third-party services and systems is limited.We also have limited control over the effectiveness of our third-party suppliers quality controlprocedures.While we have performed extensive internal testing on our vehicles software and hardware systems,we have a limited frame of reference by
263、which to assess thelong-term performance of our systems and vehicles.We cannot assure you that we will be able to detect and fix any defects in the vehicles on a timely basis,or at all.In addition,we have limited operating history in testing,delivering,and servicing our vehicles.Although we have est
264、ablished rigorous protocols in each process oftesting,delivering,and servicing of our vehicles where manual operations are required,there could be maloperation,negligence,or failure to follow protocols by ouremployees or third-party service providers.Such human error could result in failure of our v
265、ehicles to perform or operate as expected.We cannot assure you that we will beable to completely prevent human errors.In addition,any defects in or significant malfunctioning of the range extension system may weaken user confidence in EREVs.If any of our vehicles fail to perform oroperate as expecte
266、d,whether as a result of human error or otherwise,we may need to delay deliveries,initiate product recalls,provide servicing or updates under warranty atour expense,and face potential lawsuits,which could adversely affect our brand,business,financial condition,and results of operations.We may not be
267、 successful in the highly competitive China automotive market.The China automotive market is highly competitive.We compete with ICE vehicles and new energy vehicles,including BEVs.Many of our current and potentialcompetitors or new market entrants have significantly greater financial,technical,manuf
268、acturing,marketing and branding,talents,and other resources than we do and may beable to devote greater resources to the design,development,manufacturing,marketing,sales,and support of their vehicles.We expect competition in the China automotive market to intensify in the future in light of intense
269、price competition and phase-out of government subsidies.Factorsaffecting competition include,among others,technological innovation,product quality and safety,product pricing,sales efficiency,manufacturing efficiency,quality ofservices,branding,and design and styling.Increasing competition may lead t
270、o lower vehicle unit sales and increasing inventory,which may result in downward price pressureand may adversely affect our business,financial condition,results of operations,and prospects.Our ability to successfully compete against other vehicle brands will befundamental to our future success in ex
271、isting and new markets and our market share.We cannot assure you that we will be able to compete successfully in our markets.Ifproducts from our competitors successfully compete with or surpass the quality or performance of our vehicles at more competitive prices,our profitability and results ofoper
272、ations may be materially and adversely affected.We may not succeed in continuing to establish,maintain,and strengthen our brand,and our brand and reputation could be harmed by negative publicity with respect tous,our directors,officers,employees,shareholders,peers,business partners,or our industry i
273、n general.Our business and prospects are affected by our ability to develop,maintain,and strengthen our brand.If we fail to do so we may lose the opportunity to build a criticalmass of users.Promoting and positioning our brand will likely depend significantly on our ability to provide high quality v
274、ehicles and services and engage with our users asintended,and we have limited experience in these areas.In addition,we expect that our ability to develop,maintain,and strengthen the brand will depend heavily on thesuccess of our branding efforts.We market our brand through media,word-of-mouth,events
275、,and advertising.Such efforts may not achieve the desired results.If we do notdevelop and maintain a strong brand,our business,financial condition,results of operations,and prospects will be materially and adversely affected.Table of Contents18Our reputation and brand are vulnerable to many threats
276、that can be difficult or impossible to predict,control,and costly or impossible to remediate.From time totime,our vehicles are reviewed by media or other third parties.Any negative reviews or reviews that compare us unfavorably to competitors could adversely affect consumerperception about our vehic
277、les.Negative publicity about us,such as alleged misconduct,unethical business practices,or other improper activities,or rumors relating to ourbusiness,directors,officers,employees,or shareholders,or negative publicity about third parties that use the same or similar brand name as ours,can harm our r
278、eputation,business,and results of operations,even if they are baseless,irrelevant,or satisfactorily addressed.These allegations,even if unproven or meritless,may lead to inquiries,investigations,or other legal actions against us by regulatory or government authorities as well as private parties.Any
279、regulatory inquiries or investigations and lawsuits againstus,perceptions of inappropriate business conduct by us or perceived wrongdoing by any member of our management team,among other things,could substantially damage ourreputation,and cause us to incur significant costs to defend ourselves.Any n
280、egative market perception or publicity regarding our suppliers or other business partners that weclosely cooperate with,or any regulatory inquiries or investigations and lawsuits initiated against them,may also have an impact on our brand and reputation,or subject us toregulatory inquiries or invest
281、igations or lawsuits.Moreover,any negative media publicity about the auto industry,especially the NEV industry,or product or service qualityproblems of other automakers in the industry in which we operate,including our competitors,may also negatively impact our reputation and brand.In particular,giv
282、en thepopularity of social media,including WeChat and Weibo in China,any negative publicity,whether true or not,such as road accidents,vehicle self-ignition,or other perceivedor actual safety issues,could quickly proliferate and harm user perceptions and confidence in our brand.Perceived or actual c
283、oncerns on battery deterioration that are oftenassociated with NEVs could also negatively impact user confidence in EREVs and our vehicles in particular.If we are unable to maintain a good reputation or further enhanceour brand recognition,our ability to attract and retain users,third-party partners
284、,and key employees could be harmed and,as a result,our business,financial position,andresults of operations could be materially and adversely affected.Our research and development efforts may not yield the results as expected.As an emerging automaker,we heavily rely on research and development to es
285、tablish and strengthen our market position.We develop electric vehicle technologies,such as next-generation EREV powertrain system,high C-rate battery,high-voltage platform,ultra-fast charging technologies,autonomous driving technologies,next-generation intelligent cockpit,operating systems,and comp
286、uting platforms.In 2020,2021,and 2022,our research and development expenses amounted to RMB1.1 billion,RMB3.3 billion,and RMB6.8 billion(US$983.0 million),respectively.Our research and development expenses accounted for 11.6%,12.2%,and 15.0%of our total revenuesin 2020,2021,and 2022,respectively.As
287、technologies evolve,we plan to upgrade or adopt our vehicles and introduce new models with latest technologies,which will requireus to invest resources in research and development.Therefore,we expect that our research and development expenses will continue to be significant.As research anddevelopmen
288、t activities are inherently uncertain,we cannot assure you that we will continue to achieve desirable developments from our research and development activitiesand successfully commercialize such developments.Consequently,our significant research and development efforts may not yield the results as e
289、xpected.If our research anddevelopment efforts fail to keep up with the latest technological developments,we could suffer a decline in our competitive position,which may materially and adversely affectour business,financial condition,and results of operations.We could experience disruptions in suppl
290、y of raw materials or components used in our vehicles from our third-party suppliers,some of which are our single-sourcesuppliers for the components they supply.We collaborate with various third-party suppliers for sourced parts,including battery cells and semiconductor chips,to build our vehicles.S
291、ome of the third-partysuppliers are currently our single-source suppliers selected from two or more suppliers that are readily available in the market for these components,and we expect that thismay continue for our future vehicles consistent with market practice.We also rely on key raw materials,su
292、ch as steel and aluminum,sourced from our third-party suppliers.The prices for these raw materials may fluctuate depending on factors beyond our control,including market conditions and global demand for these materials,and thus couldadversely affect our business,financial condition,and results of op
293、erations.The supply chain exposes us to multiple potential sources of delivery failure or componentshortages.The supply of our chips had been adversely affected by the COVID-19 pandemic,as it caused disruptions to semiconductor manufacturers and an increase in globaldemand for personal computers for
294、 work-from-home economies.Although the situation has been significantly improved and normalized since January 2023,we still mayexperience supply chain constraints as Chinas automotive industry is undergoing a structural change that is leading to increased demand for advanced components and chips,man
295、y of which are used in our vehicles.In addition,the current tension in international trade and politics,including various restrictions related to the Chinese semiconductorindustry imposed by the U.S.government,may also adversely affect the supply of our chips.In the past,we adjusted our delivery out
296、look and may continue to make similaradjustment in the future due to various reasons,such as supply chain constraints or insufficient consumer demand,and such adjustments may have a negative impact on theprices of our Class A ordinary shares and the ADSs.Table of Contents19We do not control our thir
297、d-party suppliers or their business practices.Accordingly,we cannot assure you that the quality of the components manufactured by themwill be consistent and maintained to a high standard.Any defects of or quality issues with these components or any noncompliance incidents associated with these third
298、-partysuppliers could result in quality issues with our vehicles and hence compromise our brand image and results of operations.Additionally,we cannot assure you of third-partysuppliers compliance with ethical business practices,such as environmental responsibilities,fair wage practices,and complian
299、ce with child labor laws,among others.A lack ofdemonstrated compliance could lead us to seek alternative suppliers,which could increase our costs and results in delayed delivery of our products,product shortages,or otherdisruptions of our operations.Furthermore,qualifying alternate third-party suppl
300、iers or developing our own replacements for certain highly customized components of our vehicles may be timeconsuming and costly.Any disruption in the supply of components,whether or not from a single-source supplier,could temporarily disrupt production of our vehicles until analternative supplier i
301、s fully qualified by us or is otherwise able to supply us the required material.We cannot assure you that we would be able to successfully retain alternativethird-party suppliers or supplies on a timely basis,on acceptable terms,or at all.Changes in business conditions,force majeure,government chang
302、es,or other factors beyondour control or anticipation,could also affect our third-party suppliers ability to deliver components to us on a timely basis.Moreover,if we experience a significant increase indemand or need to replace our existing third-party suppliers,we cannot assure you that additional
303、 supplies will be available when required on terms that are favorable to us,orat all,or that any third-party supplier would allocate sufficient supplies to us in order to meet our requirements or fill our orders in a timely manner.Any of the foregoing couldmaterially and adversely affect our busines
304、s,financial condition,results of operations,and prospects.Orders for our vehicles may be canceled by users despite their deposit payment and online confirmation.Our users may cancel their orders for many reasons out of our control,and we have experienced cancelation of orders in the past.In addition
305、,users may terminatetheir orders even after they have paid deposits and waited for 24 hours upon which their orders automatically become confirmed orders and the deposits become non-refundable.The potentially long wait from reservation to delivery could also impact user decisions on whether to ultim
306、ately make a purchase,due to potential changes inpreferences,competitive developments,and other factors.If we encounter delays in the deliveries of our existing or future vehicle models,a significant number of orders maybe canceled.As a result,we cannot assure you that orders will not be canceled an
307、d will ultimately result in the final purchase,delivery,and sale of the vehicles.Suchcancelations could harm our business,brand image,financial condition,results of operations,and prospects.Our future growth is dependent on the consumer demand for NEVs.The demand for our vehicles will highly depend
308、upon consumers demand for and adoption of NEVs,including EREVs and BEVs.The market for NEVs is stillrapidly evolving,characterized by rapidly changing technologies,intense competition,evolving government regulation and industry standards,and changing consumerdemands and behaviors.Other factors that
309、may influence the adoption of NEVs include:perceptions about vehicle safety in general,in particular safety issues that may be attributed to the use of advanced technology,including BEV and EREVtechnologies,regenerative braking systems,and autonomous driving;perceptions about NEV quality,safety,desi
310、gn,performance,and cost,especially if adverse events or accidents occur that are linked to the quality or safety ofNEVs,whether or not such vehicles are produced by us or other automakers;concerns about electric grid capacity and reliability and the availability of other supporting infrastructure;th
311、e availability of servicing for NEVs;the actual or perceived deterioration of battery capacity over time;the environmental consciousness of consumers;access to charging stations and cost of charging vehicles;Table of Contents20the availability of tax and other governmental incentives to purchase and
312、 operate NEVs or future regulation requiring increased use of nonpolluting vehicles;improvements in the fuel economy of the ICE vehicles;andmacroeconomic factors.Any of the factors described above may change the consumer demand for our vehicles,including causing current or prospective users not to p
313、urchase our vehicles.Ifthe market for NEVs,and HPC BEVs in particular,does not develop as we expect or develops more slowly than we expect,our business,financial condition,results ofoperations,and prospects will be affected.Our future growth is dependent on the consumer demand for passenger vehicles
314、,the prospects of which are subject to many uncertainties.China is currently one of the worlds major automotive markets,and its passenger vehicle sales volume reached 24.4 million units in 2018.However,since July 2018,Chinas automotive industry had experienced negative year-over-year growth in sales
315、 volume,and new automobile purchases in China had been declining consecutively untilApril 2020.COVID-19 also had a significant adverse impact on automobile sales in China.As a result,Chinas passenger vehicles sales volume decreased by 9.6%to 21.4million units in 2019,and further decreased by 6.0%to
316、20.2 million units in 2020.Although the sales volume bounced back in 2021 and 2022,we cannot predict how theconsumer demand for passenger vehicles will develop in the future.Amid the market slowdown,certain automakers operating in China have suffered declining performance or financial difficulties.C
317、hinas automotive industry may beaffected by many factors,including the potentially continuing impact of the COVID-19 pandemic,general economic conditions in China,the urbanization rate of Chinaspopulation,the growth of disposable household income,the costs of new automobiles,the trade tensions and o
318、ther governmental protectionist measures,as well as taxes andincentives related to automobile purchases.If the consumer demand for passenger vehicles in China does not recover as expected,or at all,our business,financial conditionand results of operations could be materially and adversely affected.C
319、hanges in PRC government policies that are favorable for NEVs or domestically manufactured vehicles could materially and adversely affect our business,financialcondition,results of operations,and prospects.The growth of our business benefits from PRC government policies at central and local levels t
320、hat support the development of NEVs and domestically manufacturedvehicles.There are uncertainties about government support for an HPC network,which is essential to our plan to launch HPC BEVs.The PRC government has been implementing strict vehicle emission standards for ICE vehicles.On December 28,2
321、018,the PRC State Administration for MarketRegulation,or the SAMR,and the PRC National Standardization Administration jointly issued the Electric Vehicle Energy Consumption Standards,effective on July 1,2019,to regulate electric vehicles regarding their energy efficiency.Our EREVs are equipped with
322、both an ICE-based range extension system and electric motors and are thusrequired to comply with both standards.If the electric vehicle energy consumption standards and vehicle emission standards become significantly stricter,we may incursignificant costs to obtain advanced energy technology to upgr
323、ade our vehicles or design new vehicles if we are able to at all,which could materially and adversely affect ourbusiness,financial condition,results of operations,and prospects.Table of Contents21In addition,changes in classification of NEVs and license plate policies have affected,and may continue
324、to affect our business.In certain cities in China,municipalgovernments impose quotas and lottery or bidding systems to limit the number of license plates issued to ICE vehicles,but exempt NEVs from these restrictions to incentivizethe development of the NEV market.Nevertheless,in January 2018,the Be
325、ijing municipal government announced that it would only allow BEVs to be considered the NEVsexempt from the license plate restrictions,and EREVs would be treated as ICE vehicles in Beijing for the purposes of obtaining license plates.On December 10,2018,theNational Development and Reform Commission,
326、or the NDRC,promulgated the Provisions on Administration of Investment in Automotive Industry,effective on January 10,2019,which categorize EREVs as electric vehicles,although its impact on the Beijing municipal governments license plate policy remained uncertain.Similarly,in February2021,the local
327、counterpart of the NDRC and other four governmental authorities in Shanghai announced similar arrangements that only BEVs would be considered the NEVsexempt from the license plate restrictions starting from January 1,2023.As a result,our EREVs sold in Beijing and Shanghai are ineligible to enjoy the
328、 exemptions from thelicense plate restrictions available to the BEVs.There are uncertainties whether the arrangements regarding license plate restrictions will reduce the demand for EREVs inBeijing and Shanghai,which are two of the major markets for our vehicles.Although we are currently not aware o
329、f any government plan to adopt similar policies in areas otherthan Beijing and Shanghai,changes in government policies on the classification of NEVs and license plates,at a local or central level,may materially and adversely affect thedemand for our existing and future EREVs,which in turn could mate
330、rially and adversely affect our business,results of operations,financial conditions,and prospects.Furthermore,changes in government incentives or subsidies to support NEVs could adversely affect our business.EREVs enjoy certain favorable governmentincentives and subsidies,including exemption from ve
331、hicle purchase tax,one-time government subsidies,exemption from license plate restrictions in certain cities,exemptionfrom driving restrictions in certain cities,and preferential utility rates for charging facilities.However,Chinas central government has implemented a phase-out schedule forthe subsi
332、dies provided for purchasers of NEVs and the national-level subsidies for NEVs ceased as of the date of this annual report.We cannot assure you that any further changes in regulatory policies would be favorable to our business.Furthermore,any reduction,elimination or discriminatoryapplication of gov
333、ernment subsidies and economic incentives because of policy changes,the reduced need for such subsidies and incentives due to the perceived success ofNEVs,fiscal tightening or other factors may affect government incentives or subsides and result in the diminished competitiveness of the NEV industry generally.Our vehicles sales are also affected by government policies including tariffs on imported