Hello, ladies, and gentlemen, thank you for standing by for Li Auto's Fourth Quarter and Full Year 2025 Earnings Conference Call. At this time all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Janet Zhang, Investor Relations Director of Li Auto. Please go ahead, Janet. Thank you, Operator. Good evening and good morning everyone, welcome to Li Auto's Fourth Quarter and Full Year 2025 Earnings Conference Call. The company's financial and operating results were published in a press release earlier today and were posted on the company's IR website. On today's call, we will have our Chairman and CEO, Mr. Li Xiang, and our CFO, Mr. Johnny Tie Li, to begin with prepared remarks. Our President, Mr. Donghui Ma, and our CTO, Mr. Xie Yan will join for the Q&A discussion. Before we continue, please be reminded that today's discussion will contain forward-looking statements made under the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the Company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in certain company filings with the U.S. Securities and Exchange Commission and the Stock Exchange of Hong Kong Limited. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that Li Auto's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to Li Auto's disclosure documents on the IR section of our website, which contain a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures. Our CEO will start his remarks in Chinese. There will be English translation after he finishes all his remarks. With that, I will now turn the call over to our CEO, Mr. Li Xiang. Please go ahead. 大家好，我是李想，欢迎参加今天的业绩电话会议。过去一年对于理想汽车来说是一次重要的战略调整期。随着公司规模的扩大，我们也重新审视很多基础能力，其中一个非常核心的就是销售。我们过去最大的问题是在用经销商的管理方式来管理一个直营的体系，而直营体系最应该做的是应该以店面为核心进行运营管理。没有经销商帮我们管理店面，这应该变成我们自己的责任。自去年三季度以来，我们一直在探索如何更高质量地开店，如何管理好店面和激励好店长，如何对团队进行有效的赋能和培训。这一切的出发点都归结为一个核心命题：怎么用直营的体系把车卖好。为此，我们以结果为导向，以销量和人均产出为衡量标准，进行了一系列有效的改变。首先是分工的优化与人员的集中。我们通过门店派换解决选址不好的问题，将分散在人流下滑的二线商超的销售力量集中到更有潜力的市场，包含一线商圈和汽车的中心店，直接带来了门店效率和人均产出的提升。同时，为了真正激活一线销售的积极性，我们也在进行机制上的突破。今年三月，我们正式推出了门店合伙人计划，门店成为基本经营单元，优秀店长拥有了真正的经营决策权和利润分享权，从传统的销售管理角色转变成了店面真正的经营者。在今天汽车销售体系普遍不赚钱的大环境下，我们希望培养出来每年大量的收入超过百万的店长，让优秀店长的收入达到行业的三倍，也从销售能力层面确保公司订单量和交付量稳定在高端车第一梯队。产品方面，今年二季度我们将正式发布理想L9系列，凭借全面升级的动力系统、智能驾驶和底盘技术，我们要与竞品拉开显著的体验差，重回旗舰SUV的领先地位。理想L9将标配八百伏和5C超充技术，同时搭载我们新一代全栈自研的增程3.0系统，实现更高的发电效率和更大的发电量。凭借NVH优化和我们首创的EGR低温启动技术，理想L9可以提供媲美纯电车的静谧性与驾驶体验，以及更好的冬季能耗表现。我们还将全球首发的AI智能机油保养系统实现三年或三万公里的超长保养周期。售价55.98万元的理想L9 Livis版本则承载了我们对具身智能旗舰SUV的深度思考。理想L9 Livis将配备全球首个量产全线控底盘和八百伏的全主动悬架系统，提供顶级的舒适性和操控性以及悬架质感。转向、制动与悬架响应速度和安全性也大幅提升，为高级智驾和具身智能提供必要的执行基础。另外值得一提的是，理想L9 Livis将搭载两颗车规级五纳米理想自研的M 100芯片，算力达到了Thor的六倍，并通过数据流架构和资源置价的模型更好的适配，实现真正的资源模型和资源算力的软硬一体。理想L9的换代成功将直接决定了整个L系列的市场上限。如果说上一代理想L9的竞争力主要来自于精准的产品定义，那么新一代理想L9将在技术层面构建起核心竞争的壁垒。我们的纯电车型也在持续上量。首先，通过与供应商的持续努力，理想i6的供应问题逐步得到解决，我们会继续提升产能，争取让大家的提车周期更短一步。与此同时，我们也可以看到，随着车主使用里程的增加，体验上的反馈驱动了理想APP NPS增长超过20%。在年初J.D. Power发布的新能源汽车品牌健康度研究中，理想APP的NPS也位居中大型SUV的榜首。伴随这样的NPS的表现，三月份以来理想APP的订单较一月份有了三倍以上的增长。理想i6与理想i8共同夯实了理想纯电产品的市场根基。我们的目标是彻底解决之前的各类问题，让我们的纯电产品真正占领市场。此外，回顾去年理想i6在发布后面临的首销政策、产能提升和购置税补贴政策退坡周期带来的多重挑战，让理想i6的毛利率承受压力，但也为今年毛利率的改善预留了足够的空间。2026年下半年，我们还将推出一款全新的纯电旗舰SUV理想i9，进一步丰富我们的纯电产品矩阵，满足多元用户的需求。2026年是理想汽车进化为跻身智能企业的关键一年。面对竞争加剧的新能源汽车市场，我们将致力于拉高技术护城河，完成从智能电动车向跻身智能企业的跃迁，以确立下一个阶段的竞争优势。2025年，公司研发投入达到113亿元，其中AI相关的投入占50%。我们将在2026年延续这一投入战略，继续夯实跻身智能企业的核心能力。对理想汽车而言，AI主要涉及两个方面，一个是创造AI，第二个是如何使用AI。创造AI就是为产品赋予真正的生命，使用AI是提升我们的工作效率。在创造AI方面，我们全面重构了研发组织，真正以跻身智能公司的方式运行。造产品就是在造人。在处理芯片、基座模型、软件本体、硬件本体方面，建设相应的组织能力和培养顶尖的人才。在产品层面，我们视汽车为具有生命力的智能体，而AI是赋予产品活力的关键。相信依托新一代的技术平台，大家将陆续看到我们的产品的变化，它们不再是传统汽车或者电动车的简单延伸，而是具有生命力、主动性，并体现在我们日常的高频生活体验上。在效率层面，AI正在逆转公司规模扩大带来的信息流转与决策效率的下滑。通过引入Agent的协同工作，我们的迭代与进化速度开始重现创业公司的高效秘籍。这一变化在今年的日常运营中已初步体现。可以说，AI不仅带来了生产工具的革新，更催生了更具活力的组织形态。最后，我想强调，我们将把从2022年理想L9到今天积累的完整的汽车和跻身智能的技术系统变成真正的用户体验和商业价值，从而构建第二个十年的核心积累。所以请大家关注并放心地购买体验我们新一代的产品。下面有请我们的CFO 李铁给大家介绍我们的财务表现。 Now translating for Mr. Li Xiang. Thank you for joining our earnings call today. Over the past year, Li Auto has been going through an important period of strategic adjustment. As we scaled, we've reassessed a number of core capabilities, especially how to sustain sales efficiency and organization vitality in a direct sales model. The problem that we've identified is that in the past, we have used a dealership mindset to manage our storefront. However, for a direct sales model, the key is really managing each storefront and therefore, without dealers, we need to figure out how to manage these storefronts effectively on our own. Since the third quarter of last year, we've been focused on improving store rollout quality, strengthening day-to-day store operations, and upgrading incentives, training, and enablement for our teams. Ultimately, it comes down to one question: how do we sell well? With sales volume and productivity per salesperson as our key metrics, we've implemented a series of targeted changes. First, we optimized division of labor and consolidated our sales force. By closing and replacing underperforming locations, we addressed site selection issues and moved sales teams from lower traffic second-tier malls to higher potential locations, such as prime Tier 1 shopping districts and flagship stores in major auto hubs. This has directly improved store productivity and sales per head. To further enhance our frontline sales, we also upgraded our operating mechanisms. In March, we launched our store partner program, making each store the basic operating unit. Top store managers now have real operating decision power and profit sharing, shifting from a pure management role to true store operators. At a time when profitability is challenging across the auto retail industry, we want to develop store managers who can earn over RMB 1 million per year, and enable our top performers to make three times the industry average. Just as importantly, this strengthens our frontline capability and helps keep our orders and deliveries firmly in the top tier of the premium segment. Turning to products. We will officially launch the all-new L9 lineup in the second quarter. With comprehensive upgrades from powertrain, autonomous driving to chassis technology, we aim to create a clear step change in user experience versus competing models and regain leadership in the flagship SUV segment. The new Li L9 will come standard with 800 V architecture and 5C ultra-fast charging. It would also feature our next generation full stack in-house developed range extender 3.0 system, delivering higher generation efficiency and greater output. With further MBH improvements and our proprietary EGR low temperature start technology, the new Li L9 offers a cabin quietness and driving experience comparable to BEV, along with improved winter energy consumption. We will also debut the world's first AI-powered engine oil maintenance system, enabling long service intervals of up to three years or 30,000 km. Our top-of-the-line Li L9 Livis, priced at RMB 559,800, reflects our vision for a flagship SUV in an era of embodied AI. It will feature the world's first mass-produced, fully drive-by-wire chassis, along with an 800 V fully active suspension system, delivering best-in-class comfort and handling. Response speed and safety performance across steering, braking, and suspension are also significantly enhanced, providing the execution foundation for autonomous driving and embodied AI. In addition, the Li L9 Livis will be powered by two in-house developed 5 nm M100 chips, delivering six times the effective computing power of four Orin. Together with our data flow architecture and in-house intelligent driving stack, it enables end-to-end integration of our algorithms and computing platforms. The success of the new Li L9 will directly determine the market potential of the entire L-series. If the previous L9's competitiveness was driven primarily by smart product definition, the new generation L9 will build its core advantage through technology. Our BEV models are also continuing to ramp up. With sustained efforts alongside our suppliers, the supply constraints on the Li i6 have been gradually easing. We will keep increasing capacity to further shorten delivery lead times. Meanwhile, as owners put more miles on their vehicles, positive real-world experiences have driven the Li L8 NPS up by more than 20%. In the NEV Brand Health Study, recently released by Land Roads, the Li L8 also ranked number one in NPS among all large SUVs. Improved experience and satisfaction are now translating into a recovery in order and sales. Since March, Li L8 orders have increased 33% versus the same period in February, and 179% versus January. Together, the Li i6, i8 are strengthening the market foundation of our BEV portfolio. Our priority is to fully resolve the issues we encountered earlier to ensure our BEV offerings establish a solid foothold in the market. Looking back at that last year, the Li i6 faced multiple timing-related headwinds after launch, including initial sales policies, the production ramp, and the phase out of purchase tax subsidies, which pressured gross margin. At the same time, these factors also set the stage for margin improvements this year. In the second half of 2026, we'll be launching the Li i9, a new flagship BEV SUV, further expanding our BEV portfolio to meet a wider range of customer needs. 2026 will be a pivotal year in Li Auto's evolution into an embodied AI company. As competition intensifies in the NEV market, we will continue to strengthen our technology moat and complete our transformation from a smart EV company to an embodied AI company, positioning us for the next phase of the competition. In 2025, our R&D spending totaled RMB 11.3 billion, of which approximately 50% was allocated to AI-related initiatives. We will maintain this investment strategy in 2026 as we continue to build the core capabilities required of an embodied AI company. For Li Auto, AI has two main dimensions, creating AI and applying AI, bringing our products to life while improving efficiency across the organization. On the Create AI side, we have rebuilt our R&D organization from the ground up to operate the way an embodied AI company should. We're developing capabilities and attracting top talents across interface chips, foundation models, software, and hardware. At the product level, we see the vehicle as an intelligent agent with real vitality, and AI is what brings that vitality to life. Built on our next generation technology platform, our products will evolve in ways you will see over time. They will not be mere extensions of traditional cars or EVs. Instead, they will be proactive and increasingly lifelike in how they learn and improve, and that will be reified in our high-frequency experiences in daily lives. From an efficiency standpoint, AI is helping reverse the slowdown in information flow and decision-making that can come with scale. By integrating AI to work alongside agents, we're regaining the speed and agility of a startup in our iteration and evolution, and we are already seeing early results in day-to-day operations this year. In other words, AI is not only reshaping our tools, it also is enabling a more dynamic, high-velocity organization. In closing, I wanna emphasize that we will convert the capabilities and systems we built from the L9 launch in 2022 to today's broader automotive and embodied AI technology stack into real user experience and measurable business value. This will serve as the cornerstone of our long-term competitive positioning for the next decade. We look forward to your continued attention and welcoming you to experience our next generation of products. With that, we will turn the call over to our CFO, Johnny, to walk you through our financial performance. Oh, thank you, Li Xiang. Hello, everyone. Given time constraints, my remarks today will be limited to fourth quarter financial highlights. All figures will be quoted in RMB unless otherwise stated. For further details, including the corresponding U.S. dollar amounts and full year financial results, we encourage you to refer to our earnings press release. Total revenues in the fourth quarter were RMB 28.8 billion, down 35% year-over-year and up 5.2% quarter-over-quarter. This included RMB 27.3 billion from vehicle sales, down 36.1% year-over-year and up 5.4% quarter-over-quarter. The year-over-year decrease was mainly due to lower vehicle deliveries. The sequential increase was mainly due to the increase in vehicle deliveries, partially offset by lower average selling price due to the different mix following the commencement of the Li i6 deliveries. Cost of sales in the fourth quarter was RMB 23.6 billion, down 33% year-over-year, and up 3.3% quarter-over-quarter. Gross profit in the fourth quarter was RMB 5.1 billion, down 42.8% year-over-year and up 14.8% quarter-over-quarter. Vehicle margin in the fourth quarter was 16.8% versus 19.7% in the same period last year, and 15.5% in the prior quarter. The year-over-year decrease was mainly due to different product mix. The sequential increase was mainly due to the estimated Li MEGA recall cost booked in the prior quarter, partially offset by lower average selling price due to different product mix following the commencement of the Li i6 delivery. Gross margin in the fourth quarter was 17.8% versus 20.3% in the same period last year, and 16.3% in the prior quarter. Operating expenses in the fourth quarter were RMB 5.6 billion, up 5.8% year-over-year and down 1.3% quarter-over-quarter. R&D expenses in the fourth quarter were RMB 3 billion, up 25.3% year-over-year and 1.4% quarter-over-quarter. The year-over-year increase was mainly due to the cost related to AI and other programs to support product portfolio expansion and technology advancements. SG&A expenses in the fourth quarter were RMB 2.6 billion, down 14% year-over-year and 4.4% quarter-over-quarter. The year-over-year decrease was mainly due to decreased employee compensation. Loss from operations in the fourth quarter was RMB 442.6 million versus RMB 3.7 billion income from operations in the same period last year, and RMB 1.2 billion loss from operations in the prior quarter. Operating margin in the fourth quarter was - 1.5%, versus 8.4% in the same period last year, and - 4.3% in the third quarter. Net income in the fourth quarter was RMB 20.2 million, versus RMB 3.5 billion net income in the same period last year and RMB 624.4 million net loss in the prior quarter. Diluted net earnings per ADS attributable to ordinary shareholders was RMB 0.01 in the fourth quarter versus RMB 3.31 diluted net earnings in the same period last year and RMB 0.62 diluted net loss in the prior quarter. Turning to our balance sheet and cash flow. Our cash position remains solid with a year-end balance of RMB 101.2 billion. Net cash provided by operating activities in the fourth quarter was RMB 3.5 billion, versus RMB 8.7 billion provided in the same period last year and RMB 7.4 billion used in the third quarter. Free cash flow was RMB 2.5 billion in the fourth quarter versus RMB 6.1 billion in the same period last year, and - RMB 8.9 billion in the prior quarter. At the end of 2025, we had a total of 30,728 employees. Now for our business outlook. For the first quarter of 2026, the company expects the deliveries to be between 85,000 and 90,000 vehicles, and quarterly total revenue to be between RMB 20.4 billion and RMB 21.6 billion. This business outlook reflects the company's current and preliminary view on its business situation and market condition, which is subject to change. That concludes our prepared remarks. I will now turn the call over to the operator to start our Q&A session. Thank you. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. For the benefit of all participants on today's call, please limit yourself to two questions, and if you have additional questions, you can re-enter the queue. If you are a Mandarin speaker, please ask your questions in Chinese first, then follow with English translation. Your first question comes from Tim Hsiao with Morgan Stanley. My first question is about the channel. I think the management just mentioned that Li Auto now plans to optimize its sales networks and reportedly close up to 100 stores. What are the company's plans and progress regarding channel optimization? Separately, could you elaborate a bit more about the store partner mechanism? CEO just mentioned, in addition to the incentive program to the store manager, any further implementation details you can share with us? When should we expect it to show positive results? That's my first question. 另外，借此机会我也想介绍一下公司在三月初正式推出的门店合伙人机制。核心的话是我们将门店作为基本的经营单元，是希望走出一条具有理想特色的汽车直营的模式。那首先，我们肯定会坚持直营，直营的话来保证服务体验以及全国的价格政策是统一的。同时，通过下放经营的决策权和利润的分享权到店长，来激发团队的经营意识和活力。那经营决策权，包含获客的自主权、经营的自主权和团队的管理自主权。那从以往对店长的单一考核销量变成店长真正要对于本店的经营结果负责，是希望店长把店当成自己的事业的话来做。那我们也是希望这套机制能从根源上去解决过去盲目开店、扩门店外展等问题。然后并且未来的话，新店选址，会由店长全程参与的话评估。权责绑定到人，从源头去提升门店的经营质量。那公司，也会通过财务的支持和数字化工具全力去赋能一线。我们是希望力争在 Q3 能够看到明显的销售经营的改善和提升。那最后，我们始终认为，销售体系的健康和效率是保证销量的和市场地位的核心。从去年八月份开始，我们用了将近七个月的时间，系统理顺了直营模式的管理体系，包括高质量开店、精细化的话运营，以及对于店长的激励，一线的培训和功能性的机制，全力在夯实销售体系的长期竞争力。谢谢。 I need to first start with a clarification on channel optimization. The rumor about closing 100 stores is false. In reality, we've always conducted routine optimization of our stores, phasing out a small number of underperforming stores that cannot reach their sales targets. This is simply part of normal operations to address past issues like poor store locations or declining foot traffic in certain shopping districts. Our core channel strategy this year is very clear: quality over quantity. We will add new stores this year. New stores will prioritize top-tier shopping malls and premium auto parts to strengthen brand presence and attract higher quality traffic. As for city coverage, our footprint in lower-tier cities is already fairly completed, and going forward, we'll focus on increasing store density in higher-tier cities aligned with our ramp up of BEV sales. We'll continue to improve sales and service experience covering in-store reception, test drives, delivery, highway supercharging stations staffed with attendants during holidays. As a result, we've been seeing user satisfaction and positive feedback keep climbing. While we're on the topic, let me also share a bit about our new store partner program officially launched on March 1st. We're treating each store as a core business unit and building a direct sales model that's truly unique to Li Auto. First, we remain fully committed to direct sales. This ensures consistent service quality and a unified national pricing strategy. Meanwhile, we're now delegating decision-making power and sharing profits with store managers to really motivate our frontline teams and enable them to think like real business operators. In terms of store operations, store managers now have autonomy in three areas, customer acquisition, day-to-day operations, and managing their own teams. We've changed how we evaluate them as well, no longer just on sales volume. Now the performance is measured on operating results of the stores. The goal is to make every store manager feel like they're running their own businesses and be fully accountable for the results. This new model also helps us solve past problems at the root, like opening stores without thinking through, and other issues on store expansion. Going forward, store managers will be involved from day to day on site selection with clear ownership and accountability. This way, we raise store quality right from the start, and the company will back it up with financial support and digital tools to empower our frontline team. We aim to see significant sales and operational improvements from Q3. Ultimately, we believe a healthy, efficient sales and service system is the foundation of strong sales and market leadership. Since last August, we've spent seven months to systematically recalibrate our direct sales management framework. This includes high-quality store expansion, refined operations and store manager incentives, as well as frontline training. All is to build a truly sustainable competitive sales and service network for the long run. Thank you. 谢谢。我第二个问题是关于，产品。那能否请管理层分享一下，就是我们全新理想L9和L9 Livis的上市节奏、定价策略、产品力和盈利能力。My second question is about the product, the new product, for the upcoming all-new Li L9 and the Li L9 Livis, could you please shed light on the launch timeline, pricing strategy, product competitiveness in a crowded race and vehicle profitability? Thank you. 我是李想。这款搭载我们自研芯片马赫一百的全新一代理想L9将于二季度正式发布。该款车型之所以我们称之为具身智能，核心在于我们从整个这套系统的感知、大脑，还有本体三个维度，进行了整个技术的重构。我觉得第一重要的其实先讲的是感知。无论是智能驾驶、自动驾驶，还是今天的具身智能，本质上一个最大的挑战，相当于其实我们在通过看视频来学习，然后进行训练的学习，以及通过看视频来进行对车辆的控制。本质上，这个已经大家都在用的一个技术体系，其实并不真正地理解物理的世界，而是通过一种模仿学习的方式。在感知方面，我们将突破今天的摄像头，2D摄像头和激光雷达的方案，升级到3D ViT，真正地像人一样去感知和理解物理世界，而不是只是通过看视频的方式。我觉得这是一个重要的突破。这就要求我们从视频编码器到整个模型的研发，以及为编码器和模型提供强有力的计算，也就是芯片层面，联合进行设计，进行突破。我觉得这将是无论是自动驾驶还是具身智能，我认为在今年会发生一次全领域范围内最大的一个重要突破。伴随而来，我觉得VLA也会变成真正的VLA，那个位置并不是只是为了识别到底是什么东西，而是真正像人一样对物理世界理解和思考。我觉得这是一个重要的变化。另外一方面，作为机器的本体，也会发生重大的变化。我们在L9上搭载了完整的线控系统，包含了线控转向、线控制动、四轮转向，以及用四个独立电机控制的八百伏的驱动悬架。这使得车辆整个的响应速度、安全性远远超过了传统的汽车。并且还有一个很重要的一点，就是不再通过传统的MCU再到另外一个控制器MCU上进行控制，而是可以直接通过模型向控制系统直接进行输出。我觉得这样的一套体系，我们认为其实是未来整个汽车具身智能化的一套重要的标准，我们将要在理想L9上全部实现。 First, to your question about products. This year we will be launching in Q2 our all-new Li L9 vehicles equipped with our in-house developed M 100 chips. The reason we call it an embodied AI robot is really because we've completely revamped the technical stack from a sensing, brain and body from all these three dimensions. First of all, let me start with the autonomous driving front. In the past, the technical paradigm is really to have the machines to learn to drive through watching videos. They're not really understanding the physical world, but rather they're just watching videos and try to imitate human behavior from these videos. However, as we've conducted our R&D, we've identified that the most efficient way is really to understand the physical world. When we say VLA model, we're really trying to use the language to understand and behave and understand how the world works, as opposed to just simply interpreting the video. As we move from two-dimensional cameras to three-dimensional vision transformers, we can really understand the 3D world much better. That requires a revamp of the full stack from video encoder to the chips to the algorithms. How we can enable compute directly through from a large model to actually enable physical behavior. I believe this will be a major technological shift across the world across autonomous driving as well as physical robots happening this year. As I mentioned earlier, this is going to be real VLA. The language models really understand and thinks about the physical world before it makes the decision to move. That's on the sensing side, perception side. Next on the hardware itself, on the execution side, Li L9, as we've released earlier, will be equipped with a fully drive-by-wire system, which include drive-by-wire steering, four-wheel steering, electro-mechanical brake, 800 V fully independent active suspension, where we have pumps powering each suspension, each wheel, independently. What that all combined will do is that it will provide us with the level of agility that's never achieved before in a vehicle. Beyond that, all the signals and the decision making doesn't happen through an MCU, which was the paradigm before, but rather we have large models to directly process these inputs, and the outputs goes directly to the actuators as opposed to going through a much less sophisticated MCU. That's what we believe is the real smart car is going to be like. We believe that L9 is going to be the beginning of all this. Thank you. Your next question comes from Paul Gong with UBS. My first question is regarding the 2026 sales volume target based on the current environment. More importantly, how should we balance the volume and market share target versus our own margins? How important the volume target is in our overall balance of the development? So 2026, as you all know, is going to be an important year from product perspective as we release the third generation of products. We're very confident about our products. We also noticed that this is going to be the most competitive year to date. This year you will be seeing more cars released, more new cars released in the RMB 200,000 and above market than all of the years previously combined. But at the same time, the overall growth of the market is very limited. Considering all this, our total goal is still to reach a 20% year-on-year growth for all of 2026. To support all of this, we have a 3 + 2 strategy. First, starting on the three. The three pillars to support our sales. The first one is the sales system. We will continue to be committed to our direct sales model. As we've implemented new mechanisms, we will start to see benefits this year of the direct sales model. The second pillar is the L-series launch, starting with the Li L9. This new generation of L-series will really be a key pillar to our sales this year. We will make sure that we get every detail right from the product release to production to supply, to delivery, to ensure the success of Li L9 and upcoming L-series models. The third pillar is BEV ramp up, which includes Li i6, Li i8, Li i9, and Li MEGA. In the past few months, we've addressed the supply constraints. We've also fixed issues around release, sales and marketing. This year, as the year goes on, we believe that the volume on our L products will be steadily ramping up, which is going to account for a very significant market in the premium market. Now moving on to the two. The first one is AI-related investment. In the past year, we've spent RMB billions on chips, on models, and this is going to be the year I believe that all these investments start to bear fruits, meaning that they will provide a very differentiated product experience to our users. To summarize, these experiences will be proactive, will be high frequency that every consumer can feel and benefit from in their everyday life. The second of the two is our overseas strategy. This is going to be the first full year where we officially run our overseas markets, but through the years of accumulation before, and we believe that this year is going to start to see results and support a long-term growth, and overseas remains what we see as a long-term growth opportunity. Thank you. 好，我第二个问题是关于原材料价格涨价的影响，就我们看到不管是电池、内存还是铜、铝以及贵金属，其实都在最近都在涨价，不知道公司在此有一些什么样的措施可以应对，是通过供应链来消化，还是会转嫁一部分到车价里面去。So my second question is regarding the impact of raw material cost inflation, including the metals, memories, and batteries. What would be the strategy for the company to face this challenge? Shall we absorb it within the supply chain or shall we pass this part of the cost inflation to the downstream? 我是马东辉，我来回答这个问题。的确，这一轮像电池、包含存储芯片，这些核心零部件确实对于单车成本带来了不小的影响。面对这个压力，我们的应对措施主要有几点。第一个，肯定还是要强化和供应商伙伴的协同。一方面是稳价格，另外一方面还是要保供应。在成本上，我们和相关的核心供应商都签了长期的LTA协议，把关键的原材料、零部件的价格提前锁定，来对冲短期的波动。在供应上，尤其是最近存储这类智能化部件比较紧张，我们也提前和核心供应商锁定了份额，来保障新车的上市和生产。另外，有合同、有调价机制的，我们会严格按照合同来执行。没有约定的，我们也坚持和供应商共担成本，一起来扛周期，实现互利共赢。这里也非常感谢所有供应链伙伴长期以来对于理想汽车的支持。第二个，就是强化端到端的降成本，包括从产品研发、制造、物流，甚至质量全链条去挖降本的空间，同时通过平台化的研发来提高零部件的复用率，把规模效应做出来，尽量把内部…… 尽量在内部，然后把外部涨价的压力消化掉。像我们通过自研自制的增程器、电驱动、功率模块，还有自研代工的预控制器、碳化硅功率芯片，以及Mach M100的智驾芯片，包含定制电池包，都能够帮助我们更好地去控制成本。还有一点就是说新车型定价会更加合理，更加稳健。今年的新车型我们会综合考虑原材料的波动、技术投入以及用户价值，然后保证公司健康可持续的盈利能力，让新品的毛利率回到健康正常的水平。总体来说，我们是有信心通过供应链的协同、长期协议的锁价、平台化、自研技术降本，再加上合理的定价，把原材料涨价的影响控制在可控范围，保证公司的毛利率和经营质量保持稳定。谢谢。 We believe the current cost pressure is still largely concentrated on key components like batteries and memory chips, which has indeed had some impact on unit vehicle costs. In response, we've already put in place the following measures. First, we are strengthening supply chain collaboration to stabilize pricing while securing supply. On the cost side, we've signed long-term agreements with our core suppliers to lock in both pricing and volumes for our key raw materials upfront. This helps us hedge against short-term market volatility. On the supply side, especially for AI-related components like memory chips, we have been tight recently. We're continuing to work with key suppliers and to secure dedicated allocation, ensure priority of support for production and new model launches. Where contracts include clear pricing terms and adjustment mechanism, we strictly adhere to these terms. Where there is no such agreement, we work hand-in-hand with suppliers to share the cost pressure and navigate the cycle together, aiming for mutual benefits in the long term. We'd like to sincerely thank all of our supply chain partners for their ongoing support for Li Auto. Secondly, we're driving end-to-end cost optimizations in the meantime. We are identifying cost-saving opportunities across the entire value chain from product and R&D to manufacturing, logistics, cost and quality. At the same time, we're maximizing economies of scale through platform-based development and higher parts commonality across models. This allows us to absorb as much as possible of the external cost pressure internally. Our in-house developed and manufactured range extender, electric drive units, power modules, self-developed and contract manufactured domain controllers, silicon carbide power chips M 100 tons of driving chips and battery packs. All of this is helping us to better manage costs. Third, we're taking a more rational and steady approach to new vehicle pricing. For our 2026 models, pricing will reflect a balanced consideration of raw materials volatility, R&D investments, and user value to ensure healthy and sustainable profitability. Our goal is to bring gross margins of new products back to normal, to a healthy range. Overall, we're confident that by combining supply chain collaboration, long term agreements that lock in key costs, platformization, proprietary technologies and rational pricing, we can effectively contain the impact of raw material price increases with a manageable range and maintain stable gross margins and operational quality. Thank you. Thank you very much. Your next question comes from Jing Chang with CICC. First question is about recent media reports about the company's consideration of share buybacks. Could you please confirm if there are any related plans? Yes. I think, this is Johnny. I think this is not a media request about media reporter at Weibo. As a dual role primary listing company, both in U.S. and Hong Kong Stock Exchange, we recognize that share buyback is one of the ways or tools we should consider for enhancing shareholder value. With respect to share repurchase, currently we don't have any additional information need to be disclosed. Thank you. 我的第二个问题是关于研发投入的一些规划。我们看到2025年的话，公司整体研发投入刚刚介绍有50%投向在AI相关的一个领域。那想问一下，2026年的话，我们整体研发费用的指引，然后以及其中关于AI或者是汽车智能相关的战略占比，大概有多少？My second question is about R&D expense. What will be our guidance for the R&D expense in 2026? Also, last year we spent almost half of our R&D related to intelligence or AI related areas. What is the portion guidance for this year? Okay, thanks for our question. This is also Johnny. We expect the R&D expenses this year to remain around RMB 12 billion with our AI related initiatives accounting for about half of the cost. This includes the investment in AI infrastructure such as in-house chip development and computing power, as well as R&D for AI products like autonomous driving system and Li Xiang engine invested in the last several years. Just to clarify, we don't see the automotive and AI as different as independent business. We invest on the R&D side to build the AI capability and put it in our company as a whole business model. We monetize all the R&D investment through our current business model. It's not a separate business model. Thank you. Your next question comes from Fei Xing Yao with CITICS. 好，谢谢管理层接受我的提问。我这边有两个问题，第一个是关于 i 系列的，那管理层能不能给我们一些详细的信息，具体包括 i6、i8 的订单，还有它的销售情况，以及 i6 的产能爬坡。同时的话，管理层如何考虑欣旺达的这个电池的安全性，以及未来降低成本的一个贡献。So my first question is about the i-series. Could you give us some details about Li i8 and Li i6 orders, sales and especially about the ramping up production of Li i6? How do you evaluate Sunwoda battery safety and its cost reduction contribution? Thank you. 我是马东辉，我来回答这个问题。 理想 i8 去年七月份上市以来，随着用户使用里程的增加，在驾驶体验、能耗还有智能化体验方面的口碑是在持续的提升。现在的话，NPS 较上市初期增长超过了 20%。像春节期间我们的 5C 超充，还有 OTA 8.3 智驾的升级都获得了用户高度的认可，NPS 也达到了历史的最高。然后在捷蓝路 2025 年下半年调研当中，理想 i8 也是在中大型 SUV 当中，NPS 是排在第一。凭借良好的口碑，i8 的订单也在稳步地回升。在三月份订单相比一月份的同期提升了 180%，市场的需求持续地向好。 关于理想 i6 的话，我们已经跨过了最艰难的产能爬坡期，正式进入了稳定的交付阶段。i6 的产品力也得到了充分的验证，凭借外观造型、空间、能耗，还有超控能力，精准地满足了年轻家庭的需求。上市之后，订单强劲。同时，供应链的瓶颈已经彻底地解决。此前，电池供应的短期波动带来挑战，通过我们和核心的供应商协同，提升了供应的产能。另外，我们也及时推出购置税补贴以及延期的交付关怀政策。这里也特别感谢理想 i6 用户的理解和等待过程当中的坚守。后续我们 i6 的月交付能力会达到两万台水平。在手的订单也会在未来一到两个月内高效地交付。更重要的是，i6 的成功也证明了理想的品牌势能不仅仅是增程产品，也成功延伸到纯电的市场。 关于电池的政策，我们始终是坚持开放合作的战略，与行业头部的高端伙伴合作。但是，我们要掌握主动权，从整车的性能需求出发，去主导电池的方案设计，然后层层去把关品质。不管电池是哪一家，它的性能、质量、安全都必须要达到我们统一的理想标准，用户实际使用起来体验完全一样，不会有任何的差别。另外也想说一下，2026 年，理想汽车所有的车型都将搭载两种品牌的电池，一个是理想品牌，一个是宁德时代的品牌。这也意味着我们和核心伙伴的合作会进入更加深层次的融合阶段。也请大家相信理想汽车本身这个品牌，因为理想的品质从来不是靠单一供应商决定的，而是由我们全栈自研的技术、严苛的品控体系，还有长期坚持的价值观共同定义的。选择理想就选择了最可靠的保障。谢谢。 Now let me start with Li L8. Since its launch in July last year, user satisfaction has continued to rise as owners accumulate miles on their vehicles, and they're satisfied particularly with driving, charging experience and autonomous driving. The NPS of Li L8 has risen by over 20% compared to the early post-launch period. During the Chinese New Year holiday, our 5C ultra-fast charging and OTA 8.3 autonomous driving upgrade received strong user acclaim, pushing NPS to an all-time high. In J.D. Power's second half of the 2025 survey, Li L8 ranked number one in NPS among all large SUVs. Fueled by the strong word of mouth, Li L8 orders have steadily rebounded. Daily orders in early March were up nearly 180% versus January. This clearly upward trend reflects strengthening market demand. Now turning to Li L6, we've successfully moved past the most challenging phase of production ramp up. We are now in the stable delivery phase. Li L6 product strength has been thoroughly validated with its distinctive exterior design, spacious interior, efficient energy consumption, and agile handling. It precisely meets the needs of young families. It experienced strong order momentum since launch, and at the same time, all of its supply chain bottlenecks have now been fully resolved. We used to face short-term volatility in battery supply, but we worked closely with our core suppliers to scale production capacity. We also introduced a purchase tax subsidy and extended care policy. I'd like to thank all of our Li L6 users for their understanding and patience. We expect Li L6 to sustain a steady monthly sales of around 20,000 units, and we're on track to efficiently deliver the current order backlog within the next one to two months. Most importantly, Li L6 success clearly shows that Li Auto's brand appeal has successfully extended from the EREV segment into the BEV segment. Moving on to our battery strategy, we are committed to an open partnership approach while working closely with industry leaders, we retain control in all these partnerships. When it comes to the vehicle performance, we led battery architecture design and rigorously control quality at every step. Regardless of which partner supplies the cell All batteries must meet Li Auto's unified Li standard for performance, quality, and safety. To the user, the experience is identical. There are no differences whatsoever. Additionally, starting in 2026, all Li Auto vehicles will be equipped with batteries from only two brands, Li Auto brand and CATL. This marks a deeper level of integration with our core partners. We ask for your continued trust in the Li Auto brand, because Li Auto's quality has never depended on any single supplier. It's defined by our full stack in-house R&D, our rigorous quality control systems, and the core values we've upheld from day one. When people choose Li Auto, it means they're choosing the most reliable assurance. Thank you. Okay, this is Yan. Let me answer your question. M100 will deliver with L9, our new series, and we already started mass production. For M100 itself, with the same silicon area, M100 delivers significantly higher effective compute, giving our VLA algorithms much more design space. For example, we can run a VLA model with about six times the parameters and 10 times the compute of the previous generation, while still achieving higher frame rates and faster inference. More importantly, as our in-house models, compiler stack, and operating system evolve together through co-design, we are beginning to unlock the real potential of a full self-developed autonomous driving stack. The performance gain we see today are important, but the bigger impact is that this system-level integration will significantly accelerate how fast our autonomous driving capabilities improve over time. Once the system is officially deployed, we expect the pace of capability improvement to increase substantially. M100 also works closely with Halo OS and Vehicle Body system, enabling tighter coordination between autonomous driving compute, computation, pre- and post-processing and vehicle control. This shortens the end-to-end latency from sensor photon input to vehicle actuation to around 200 ms-300 ms, directly improving the driving experience. The higher local compute also allows us to deliver more intelligent capabilities beyond autonomous driving. Over time, the car will behave more and more like a robot. Some of these capabilities will first appear on the new L9, and we will continue to expand them in the future. M100 also brings significant cost advantage. First, the BOM cost per chip is much lower than external solutions. Second, we removed the XCU controller used in the previous generation platform. By replacing it with M100 combined with the Halo OS virtualization, we save over 1,000 IMD per vehicle. Third, thanks to our data flow architecture and the co-design of model and the chips, we achieve higher runtime efficiency today and maintain much greater headroom for future performance improvement. When we started developing our own chip in 2022, we believed that around 2025, the industry would move into a new phase where models, chips, and operating system have to be designed together. That kind of vertical integration creates real differentiation in performance, efficiency, and user experience. Over time, the gap between companies will start to look like the gap between Apple and Android in cell phone world. Once you achieve full stack hardware-software integration, the advantage becomes structural and it keeps widening. Thank you. Your next question comes from Tina Hou with Goldman Sachs. Thanks for taking my question. My first question is regarding embodied AI. For the next one to two years, wondering what's the strategic plan from Li Auto? What kind of products are we expect to see? Also the progress or timeline of these products. Also in terms of the strategic priority, how do you decide between EVs, robotaxi as well as a humanoid robot? 你好，我是李想。我觉得我们分两个方面、两个层面来看。我觉得第一个是在整个具身智能的完整的技术、垂直技术整合上，我们会100%的投入，因为我们认为整个具身智能在整个的系统级技术上是具备共性的，包含了端侧的推理的芯片，包含了不同的模型，也包含了像操作系统，还有背后的整个的数据和训练体系。我觉得这个其实是我们会全力以赴地投入的，并且认为这是所有具身智能最重要的基础。另外其实在真正的商业和产品落地方面，我们会小心翼翼，会不断地进行探索。在向更多的领域进行探索扩展的这种方式上，我们会以创业公司的方式来启动，包含我们的AI眼镜，包含我们的机器人的项目。我们避免了大公司那种大手大脚的方式，而是选择真正的以创业公司、创业团队的方式，去孵化这样的产品。所以这是大概我们的一个策略。 In terms of the embodied AI strategy, first of all on a technological and product front, we believe that there is a lot of commonality, regardless of what kind of physical product we're talking about. This is an area we will be investing heavily in because we believe that all these investments will be shared across different product shapes and forms. This includes the device side inference chips, the foundation models and operating system as well as the entire data training workflow. In the meantime, on the commercial side, we will be very careful as we invest and explore. We will be adopting a startup model in areas like AI glasses and robots. Instead of using a traditional large company approach where we invest heavily in unverified direction, we will work more like a startup company to start these new initiatives and wade our way through. 好的，我第二个问题是想请问一下，目前咱们对这个智能化研发的一个调整工作是否已经结束？然后在这个新的分工之下，咱们智驾的进展目前怎么样？ My second question is regarding our R&D restructuring. Wondering if the restructuring has been completed and then also under the new structure, how is the progress regarding our autonomous driving? 今年一月份我们组织发生了一个比较大的调整，最重要的是研发团队，从原来的这种硬件冷链的功能的定义的方式，划分不同功能，变成了创造人，创造数字人和硅基人的这样的一个管理方式。我们把不同的这样的一个划分，比如说一个数字人的脏器官，包含了心脏就是我们的芯片，也包含了我们的数据集，就像是肺，也包含了我们的操作系统，就像我们的神经。我们把这一类的团队放在一个大的体系下进行管理。另外，第二个其实很重要的其实是脑系统，包含脑系统连接了感知，我们的预训练、后续链、强化训练，还有基础的infrastructure，这样的整个脑系统的团队，我会放在一起来管理，而且脑系统团队只能做这些，不能去碰真正的应用。就避免了一个本来应该变成一个很强的脑子，但非要长出来小小的手脚。另外一方面，其实跟今天OpenAI还是Google一样，有我们的软件的应用团队，我们自己内部因为有硬件和软件，所以我们称之为软件本体，它要构建一个系统级的Agent，所以包含了背后的整个的软件的工具的开发，像MCP这种调用的协议，包括怎么来搭建Agent，记忆系统，还有skills。而且它跟我们的操作系统结合在一起，这么着就能够真正地去完成任务，去干活，而不是只是简单的对话，或给出一些文本上或者图片上的一些结果。我觉得这是我们的软件本体的这样的一个团队，而且我们对软件本体团队的要求是你要通过应用的改善，包括用好skills，用好记忆，也避免了过去的时候很多传统公司做AI的时候，每一个应用和软件团队也都想去碰一碰微调训练、搞搞LLM这些没什么用的东西，避免了就是身体非得长出一些没用的脑子出来，效率很低的脑子出来。我觉得这是软件本体的部分。另外一方面，硬件也发生了很大的变化，变成了专门为以后的具身考虑的完整的这样的一个硬件本体体系，包含很重要的能源体系、驱动体系、控制体系，把这些体系不再是原来每一个单独的控制器去进行管理，而是我们现在已经开始通过用MCP，用这种模型直接通过MCP对所有的执行器进行控制这样一个方式。从而我们能够让团队真正地联合在一起，来打造跟以往的传统的硬件软件所不同的数字人、硅基人的这样的一个组织模式和研发模式。我觉得这是我们今年一月份做的很重要的一个变化。我们在做这个变化的时候，很多团队最开始不太明白，但是我们实际能看到效率非常之高。我们的支架的模型的整个的训练的效率，会从过去的基本上两周迭代一次，现在基本上变成了一天迭代一次。另外一方面，团队之间的协作也完全不一样，过去还有部门墙的各个团队，今天大家完全坐在一起，不用考虑你是你的、我是我的，大家真的坐在一起来协作，因为我们核心的目的就是创造具身智能，像人一样地去构建我们的研发体系，打造最终的产品。 We went through a major organization change in January, where we completely revamped our hardware and software functions. All this has a shared goal, which is to build a silicon-based digital human being or a smart human being. That's our overall goal. In order to achieve this reorganization, we've basically reconnected across our businesses and regrouped the functions by the specific part of the human that they're responsible for, as opposed to previously dividing by the so-called business units or the product. This organization or the specialization happens in three areas. The first one is what we think of as brain, and this includes like datasets, which is comparable to human lungs, and the chips, which is comparable to the heart and operating system compared to the neural system. All of these are organized together so that we can work through pre-training and post-training and infrastructure together and think of these as the brain. My rule for these teams is that they cannot touch applications because in many companies the fundamental research team are tempted to work on applications. In our case, the brain should not have their own hands, but they should focus on building a very robust brain that can be used across different hardware and software applications. On top of the brain team, we have what we call the applications team or in our language we call it the core software team. This core software team includes software tools like MCP. They include teams that build agents, teams that focus on skills and teams that focus on memories. All of these different components are designed to work with a shared operating system. That's how we can organize all these different components of software to actually do things for us, as opposed to just become a conversational robot. It can actually strategize and execute a task when given a human being. Everything I mentioned above is software, which includes skills, memories. Again, here we avoid the teams set to the temptation to want to build their own brains. We don't want the body to have its own little brain, but rather we want them to fully utilize the powerful brain that was built by the previous team that I mentioned. This team focuses mostly on the body, the applications. Then finally we have the hardware team. This is about building dedicated hardware for AI, for embodied AI, which includes an energy team, an electric drive team, and a controllers team. When I say controller teams, we don't necessarily use actual controllers like the ones seen in automobiles in the past because we're now working with a model where we build MCPs for the different components so that the large model can directly talk to these MCPs and control these different components, which makes them a lot more intelligent and more efficient. When I put these three teams together, the major benefit that I see is that they're able to work together across different products because they enable each other's work as opposed to the silos that you see with the traditional models. That's how we can deliver products that are also differentiated from the traditional products. After we've made this reorganization, many people at the beginning didn't understand why we were making this change. Over time, very quickly, they're starting to see the efficiency gain in the workflow. For example, for the autonomous driving team, they used to iterate their models every two weeks, but after the change, they're now able to turn out iteration every one day, which is a 14-time improvement. Again, as I mentioned earlier, this is partly thanks to the collaboration across different teams. They all sit in one room and work together as opposed to having different departments talk between silos. That's how we believe we can really build an embodied AI that we will see very soon. There's one important thing that I want to add. Around the beginning of this year, we've seen many important managers, especially in the R&D field. We've seen several major departures. Many of them have been with the company for over five years, which is something I believe you've also noticed in the market. These leaders, in many cases, they're first in line of their business. They went through the entire zero to one cycle with Li Auto, in a startup mode, and they've been very well received by the investment community, and many of them have had a major funding, and as we've seen on the news already. First of all, I wanted to congratulate these former colleagues for getting good reception in the market, not just funding, but also overall reception. I really wish all of you good luck and to compete in your respective markets and wish your business to develop well, and for you to have a success in your new venture. At the same time, I also want to point out that this change has really given rise to a very exciting change within the company. It has enabled many of our young leaders across technology in business units in foundation models, vehicle product lines, and embodied AI. It has enabled new leaders in these areas. Many were born after 1990 or 1995 to really take the spot and take the burden. There's really we are starting to see a full bench of very talented and motivated colleagues, which is prepping the company really for the next decade. I believe this overall is really a win-win situation for us and our employees, and really ready us for the new decade of development. I want all of you, investors and those who care about the company to rest assured that this young generation is taking over very well, and they're building on the solid foundation that's built by their predecessors, and have yielded some really, really good results, especially in some key technical areas, including some of these, and key research problems, our post-1995 generation has made a major contribution. Even some fresh college graduates, many of them were born after the year 2000. They've made some major contributions to our products, to our technology and our, and are at the forefront of our research, R&D. This is really exciting time, and I'm really excited to see all this and also that makes me very confident about the next decade that's to come. Thank you. As we are reaching the end of our conference call now, I'd like to turn the call back over to the company for closing remarks. Ms. Janet Zhang, please go ahead. Thank you once again for joining us today. If you have further questions, please feel free to contact Li Auto's Investor Relations team through the contact information provided on our IR website. This concludes this conference call. You may now disconnect your line. Thank you.