Li Auto Inc. (NASDAQ:LI) Q2 2023 Earnings Call Transcript

And the R&D really falls into four areas: first is data; and second is, big model training algorithms; and third is assessment and security; and lastly, application deliveries. On the training algorithm front, we’ve stated in line with mainstream algorithms in the industry, including the foundational model training, which utilizes 1.3 billion tokens, and to command, fine tuning and reinforce learning. And in order to make sure that the Mind GPT model can have accurate knowledge and be able to personalize based on the users, we’ve also introduced search and recommendation algorithms, which are also built in-house. Mind GPT is now in version one, which uses 16 billion parameters, and based on the foundation model, we can better suit the user scenarios of our users and to make Li Xiang Tong Xue more interactive with our users.

On the product front, the big model based Mind GPT is really going to — is going to power our first-generation multimodal human machine interface operating system. And it can allow every single person of our user family to use AI with ease and make Li Xiang Tong Xue a new member of the family and can be an expert on the car and can be a teacher and can be a tour guide, it can be everything. And in terms of progress, we’ll be sharing more details about the progress of R&D. And so far, we have already opened up Mind GPT for internal [indiscernible]. And after these tests, we’ll be releasing the models to a small number of early bird users through [indiscernible].

Operator: Our next question comes from Paul Gong with UBS. Please go ahead.

Paul Gong: [Foreign Language] So my first question is regarding the MEGA, regarding its capacity preparation as well as sales expectation. Does the Zeekr 009 the only purely electric MPV currently in the market provides benchmark? And after MEGA, what is our latest thoughts on the product pipeline for the BEV?

Xiang Li: [Foreign Language] [Interpreted] First on MEGA sales target, we’re confident that MEGA will become the top seller in the market above RMB500,000 across all the different energy forms and body types, just like we’ve seen from L7 and L8, which are respected market leaders in their segments. They’ve also won over market share from sedans and other segments.

Paul Gong: [Foreign Language]

Xiang Li: [Foreign Language] [Interpreted] Next year, we’re planning to release four vehicles, one range extender vehicle and three pure electric vehicles, not including MEGA, which we just talked about. For specific product details, we’ll be sharing on our product release next year when the time is appropriate.

Paul Gong: [Foreign Language] So the second question is regarding the parallel exports. We realize that there are some informal trading of the Li Auto’s products into other countries. How big is this in terms of scale? And do you have any plan to formalize it from gorilla into formal army and expand our sales volume as well as our global influence of the branding?

Johnny Tie Li: Hi, Paul. This is Johnny. I think we want to state again, we want to I think globalization after we become dominant in China, because China is a very big market, as we just mentioned. So, the answer is no, we want to — and also our product was designed and was available for sale only for China [Mainland] (ph). That’s all. Thank you.

Paul Gong: Okay. Thank you very much. Thank you.

Operator: Our next question comes from Jing Chang with CICC. Please go ahead.