0001104659-22-126077 | 6-K | XBRL Viewer

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Document and Entity Information	9 Months Ended
Document and Entity Information	Sep. 30, 2022
Document Information [Line Items]
Document Type	6-K
Document Period End Date	Sep. 30, 2022
Entity Registrant Name	Li Auto Inc.
Entity Central Index Key	0001791706
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Current assets:
Cash and cash equivalents	¥ 37,472,617	$ 5,267,817	¥ 27,854,224
Restricted cash	3,097,127	435,387	2,638,840
Time deposits and short-term investments	14,492,404	2,037,310	19,668,239
Trade receivable, net of allowance for credit losses of RMB467, and RMB149 as of December 31, 2021 and September 30, 2022, respectively	32,582	4,580	120,541
Inventories	5,515,781	775,396	1,617,890
Prepayments and other current assets, net of allowance for credit losses of RMB2,192, and RMB14,172 as of December 31, 2021 and September 30, 2022, respectively	1,459,680	205,199	480,680
Total current assets	62,070,191	8,725,689	52,380,414
Non-current assets:
Long-term investments	1,480,987	208,194	156,306
Property, plant and equipment, net	9,361,504	1,316,019	4,498,269
Operating lease right-of-use assets, net	3,277,542	460,750	2,061,492
Intangible assets, net	832,030	116,965	751,460
Deferred tax assets	11,493	1,616	19,896
Other non-current assets, net of allowance for credit losses of RMB3,757, and RMB7,468 as of December 31, 2021 and September 30, 2022, respectively	2,196,550	308,787	1,981,076
Total non-current assets	17,160,106	2,412,331	9,468,499
Total assets	79,230,297	11,138,020	61,848,913
Current liabilities:
Short-term borrowings	528,065	74,234	37,042
Trade and notes payable	15,520,221	2,181,798	9,376,050
Amounts due to related parties	7,307	1,027	37,455
Deferred revenue, current	522,613	73,468	305,092
Operating lease liabilities, current	707,068	99,398	473,245
Accruals and other current liabilities	4,615,396	648,823	1,879,368
Total current liabilities	21,900,670	3,078,748	12,108,252
Noncurrent liabilities:
Long-term borrowings	8,964,211	1,260,169	5,960,899
Deferred revenue, noncurrent	584,635	82,187	389,653
Operating lease liabilities, noncurrent	1,743,489	245,096	1,369,825
Deferred tax liabilities	84,264	11,846	153,723
Other noncurrent liabilities	1,805,869	253,865	802,259
Total noncurrent liabilities	13,182,468	1,853,163	8,676,359
Total liabilities	35,083,138	4,931,911	20,784,611
Commitments and contingencies
SHAREHOLDERS' EQUITY
Treasury Shares	(84)	(12)	(89)
Additional paid-in capital	53,166,644	7,474,048	49,390,486
Accumulated other comprehensive loss	(236,207)	(33,205)	(1,521,871)
Accumulated deficit	(9,074,788)	(1,275,714)	(6,805,635)
Total Li Auto Inc. shareholders' equity	43,856,988	6,165,317	41,064,302
Noncontrolling interests	290,171	40,792	0
Total shareholders' equity	44,147,159	6,206,109	41,064,302
Total liabilities and shareholders' equity	79,230,297	11,138,020	61,848,913
Class A Ordinary Shares
SHAREHOLDERS' EQUITY
Ordinary shares	1,188	167	1,176
Class B Ordinary Shares
SHAREHOLDERS' EQUITY
Ordinary shares	¥ 235	$ 33	¥ 235

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) ¥ in Thousands	Sep. 30, 2022 CNY (¥) shares	Sep. 30, 2022 $ / shares	Dec. 31, 2021 CNY (¥) shares	Dec. 31, 2021 $ / shares
Accounts receivable, allowance for credit loss \| ¥	¥ 149		¥ 467
Prepayments and other current assets, allowance for credit losses \| ¥	14,172		2,192
Other noncurrent assets, allowance for credit losses \| ¥	¥ 7,468		¥ 3,757
Ordinary shares, shares issued	1,953,820,766		1,929,562,426
Ordinary shares, shares outstanding	1,953,820,766		1,929,562,426
Class A Ordinary Shares
Ordinary shares, par value \| $ / shares		$ 0.0001		$ 0.0001
Ordinary shares, shares authorized	4,500,000,000		4,500,000,000
Ordinary shares, shares issued	1,728,765,894		1,709,903,330
Ordinary shares, shares outstanding	1,598,008,686		1,573,750,346
Class B Ordinary Shares
Ordinary shares, par value \| $ / shares		$ 0.0001		$ 0.0001
Ordinary shares, shares authorized	500,000,000		500,000,000
Ordinary shares, shares issued	355,812,080		355,812,080
Ordinary shares, shares outstanding	355,812,080		355,812,080

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥) ¥ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares	Sep. 30, 2021 CNY (¥) ¥ / shares shares
Revenues:
Total revenues	¥ 27,636,942	$ 3,885,140	¥ 16,389,327
Cost of sales:
Total cost of sales	(22,412,817)	(3,150,744)	(13,007,852)
Gross profit	5,224,125	734,396	3,381,475
Operating expenses:
Research and development	(4,709,941)	(662,113)	(2,056,398)
Selling, general and administrative	(4,035,442)	(567,293)	(2,366,500)
Total operating expenses	(8,745,383)	(1,229,406)	(4,422,898)
Loss from operations	(3,521,258)	(495,010)	(1,041,423)
Other (expense)/income
Interest expense	(67,947)	(9,552)	(53,559)
Interest income and investment income, net	720,457	101,280	561,117
Others, net	540,927	76,042	98,283
Loss before income tax expense	(2,327,821)	(327,240)	(435,582)
Income tax (expense)/benefit	30,171	4,241	(181,384)
Net loss	(2,297,650)	(322,999)	(616,966)
Less: Net loss attributable to noncontrolling interests	(28,497)	(4,006)	0
Net loss attributable to ordinary shareholders of Li Auto Inc.	¥ (2,269,153)	$ (318,993)	¥ (616,966)
Weighted average number of ordinary shares used in computing net loss per share
Basic	1,936,947,462	1,936,947,462	1,829,434,693
Diluted	1,936,947,462	1,936,947,462	1,829,434,693
Net loss per share attributable to ordinary shareholders
Basic \| (per share)	¥ (1.17)	$ (0.16)	¥ (0.34)
Diluted \| (per share)	¥ (1.17)	$ (0.16)	¥ (0.34)
Other comprehensive (loss)/income
Foreign currency translation adjustment, net of tax	¥ 1,285,664	$ 180,736	¥ (144,620)
Total other comprehensive (loss)/income	1,285,664	180,736	(144,620)
Total comprehensive loss	(1,011,986)	(142,263)	(761,586)
Less: Net loss attributable to noncontrolling interests	(28,497)	(4,006)	0
Comprehensive loss attributable to ordinary shareholders of Li Auto Inc.	(983,489)	(138,257)	(761,586)
Vehicle sales
Revenues:
Total revenues	26,838,104	3,772,841	15,752,753
Cost of sales:
Total cost of sales	(21,870,088)	(3,074,448)	(12,697,925)
Other Sales And Services [Member]
Revenues:
Total revenues	798,838	112,299	636,574
Cost of sales:
Total cost of sales	¥ (542,729)	$ (76,296)	¥ (309,927)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands	Treasury Shares CNY (¥) shares	Ordinary Shares Class A Ordinary Shares Initial Public Offering CNY (¥) shares	Ordinary Shares Class A Ordinary Shares CNY (¥) shares	Ordinary Shares Class B Ordinary Shares CNY (¥) shares	Additional Paid-in Capital Initial Public Offering CNY (¥)	Additional Paid-in Capital CNY (¥)	Accumulated Other Comprehensive Income/(Loss) CNY (¥)	Accumulated Deficit Cumulative effect of adoption of credit loss guidance CNY (¥)	Accumulated Deficit CNY (¥)	Noncontrolling Interests CNY (¥)	Cumulative effect of adoption of credit loss guidance CNY (¥)	Class A Ordinary Shares shares	Class B Ordinary Shares shares	Initial Public Offering CNY (¥)	CNY (¥) shares	USD ($) shares
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT)/EQUITY
Issuance of ordinary shares as treasury shares	¥ (22)		¥ 22
Issuance of ordinary shares as treasury shares ( Shares) \| shares	(34,000,000)		34,000,000
Exercise of share options and vesting of RSUs						¥ 985									¥ 985
Exercise of share options and vesting of RSUs (in shares) \| shares	1,519,362
Share-based compensation						710,500									710,500
Foreign currency translation adjustment, net of tax							¥ (144,620)								(144,620)
CEO options	¥ (70)		¥ 70			70									70
CEO options (in shares) \| shares	(108,557,400)		108,557,400
Share issuance, net of issuance costs		¥ 74			¥ 10,995,213									¥ 10,995,287
Share issuance, net of issuance costs (in shares) \| shares		113,869,700
Net loss									¥ (616,966)						(616,966)
Balance at the end of period at Sep. 30, 2021	¥ (92)		¥ 1,176	¥ 235		48,996,529	(1,149,804)	¥ (1,955)	(7,101,146)		¥ (1,955)				40,746,898
Balance at the beginning of period at Dec. 31, 2020			¥ 1,010	¥ 235		37,289,761	(1,005,184)		(6,482,225)						¥ 29,803,597
Balance at the end of period (in shares) at Sep. 30, 2021 \| shares			1,709,903,330	355,812,080
Balance at the beginning of period (in shares) at Dec. 31, 2020 \| shares			1,453,476,230	355,812,080
Balance at the end of period (in shares) at Sep. 30, 2021 \| shares	(141,038,038)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT)/EQUITY
Exercise of share options (Shares) \| shares															11,673,130	11,673,130
Exercise of share options and vesting of RSUs	¥ 5					3,595									¥ 3,600
Exercise of share options and vesting of RSUs (in shares) \| shares	5,395,776
Share-based compensation						1,350,864									1,350,864
Foreign currency translation adjustment, net of tax							1,285,664								1,285,664
Capital injection by noncontrolling interests										¥ 318,668					318,668
Share issuance, net of issuance costs			¥ 12			2,421,699									2,421,711
Share issuance, net of issuance costs (in shares) \| shares			18,862,564
Net loss									(2,269,153)	(28,497)					(2,297,650)	$ (322,999)
Balance at the end of period at Sep. 30, 2022															43,856,988	$ 6,165,317
Balance at the beginning of period at Dec. 31, 2021	¥ (89)		¥ 1,176	¥ 235		49,390,486	(1,521,871)		(6,805,635)						¥ 41,064,302
Balance at the end of period (in shares) at Sep. 30, 2022 \| shares			1,728,765,894	355,812,080								1,728,765,894	355,812,080		1,953,820,766	1,953,820,766
Balance at the beginning of period (in shares) at Dec. 31, 2021 \| shares			1,709,903,330	355,812,080								1,709,903,330	355,812,080		1,929,562,426	1,929,562,426
Balance at the end of period (in shares) at Sep. 30, 2022 \| shares	(130,757,208)
Balance at the beginning of period (in shares) at Dec. 31, 2021 \| shares	(136,152,984)
Balance at the beginning of period at Dec. 31, 2021															¥ 41,064,302
Balance at the end of period at Sep. 30, 2022	¥ (84)		¥ 1,188	¥ 235		¥ 53,166,644	¥ (236,207)		¥ (9,074,788)	¥ 290,171					¥ 44,147,159	$ 6,206,109

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands	9 Months Ended			12 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)	Dec. 31, 2021 CNY (¥)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	¥ (2,297,650)	$ (322,999)	¥ (616,966)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	785,271	110,392	382,575
Share-based compensation expenses	1,350,864	189,901	710,500
Foreign exchange loss	14,157	1,990	55,947
Unrealized investment loss/(income)	(8,419)	(1,184)	8,704
Interest expense	20,210	2,841	50,955
Share of loss of equity method investees	7,457	1,048	465
Impairment loss related to the property, plant and equipment	0	0	27,388
Inventory write-downs and losses on purchase commitments relating to inventory	802,799	112,856	51,256
Allowance for credit losses	15,373	2,161	3,566
Deferred income tax, net	(61,056)	(8,583)	181,384
Loss on disposal of property, plant and equipment	53,848	7,570	19,843
Changes in operating assets and liabilities:
Prepayments and other current assets	(988,152)	(138,912)	(363,959)
Inventories	(4,162,785)	(585,195)	(490,372)
Operating lease rightofuse assets	(505,330)	(71,038)	(505,064)
Operating lease liabilities	607,486	85,399	546,537
Other non-current assets	(460,806)	(64,779)	(379,936)
Trade receivable	87,377	12,283	(152,634)
Deferred revenue	(16,644)	(2,340)	148,852
Trade and notes payable	5,628,720	791,273	3,881,128
Amounts due to related parties	(30,148)	(4,238)	(12,902)
Accruals and other current liabilities	944,560	132,784	630,130
Other noncurrent liabilities	667,784	93,877	326,090
Net cash provided by operating activities	2,454,916	345,107	4,503,487
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment and intangible assets	(3,459,878)	(486,382)	(1,786,162)
Disposal of property, plant and equipment	760	107	1
Purchase of longterm equity investments	(663,090)	(93,216)	0
Placement of long-term time deposits	(679,486)	(95,521)	(797,268)
Redemption of short-term time deposits	514,242	72,291	1,138,908
Placement of short-term financial investment	(44,221,644)	(6,216,580)	(194,477,476)
Redemption of short-term financial investment	49,502,709	6,958,981	198,841,957
Placement of long-term financial investment	(50,000)	(7,029)	0
Cash paid related to acquisition of Chongqing Zhizao Automobile Co., Ltd. ("Chongqing Zhizao"), net of cash acquired	0	0	(67,580)
Net cash provided by investing activities	943,613	132,651	2,852,380
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible debt	0	0	5,533,238
Proceeds from share issuance through an at-the-market equity offering program (the "ATM Offering")	2,465,441	346,587	0
Proceeds from exercise of stock options and vesting of RSUs	5,680	798	683
Proceeds from borrowings	2,977,934	418,632	400,000
Payment of borrowings	(149,850)	(21,066)	(429,692)
Proceeds from issue ordinary shares	0	0	70
Payment of issuance costs	(837)	(118)	0
Capital injection from noncontrolling interest	90,000	12,652	0
Proceeds from Hong Kong IPO, net of issuance cost	0	0	11,040,204
Net cash provided by financing activities	5,388,368	757,485	16,544,503
Effect of exchange rate changes on cash and cash equivalents and restricted cash	1,289,783	181,314	(111,698)
Net increase in cash, cash equivalents and restricted cash	10,076,680	1,416,557	23,788,672
Cash, cash equivalents and restricted cash at beginning of the period	30,493,064	4,286,647	10,172,519	¥ 10,172,519
Cash, cash equivalents and restricted cash at end of the period	40,569,744	5,703,204	33,961,191	¥ 30,493,064
Supplemental schedule of noncash investing and financing activities
Payable related to purchase of property, plant and equipment	(2,471,347)	(347,416)	(637,969)
Property, plant and equipment and other assets related to capital injection by noncontrolling interest shareholders	¥ 228,668	$ 32,146	¥ 0

Organization and Nature of Operations

9 Months Ended

Sep. 30, 2022

Organization and Nature of Operations

Organization and Nature of Operations

1.	Organization and Nature of Operations

(a)Principal activities

Li Auto Inc. (“Li Auto”, or the “Company”) was incorporated under the laws of the Cayman Islands in April 2017 as an exempted company with limited liability. The Company, through its consolidated subsidiaries and the consolidated variable interest entities (the “VIEs”) and the VIEs’ subsidiaries (collectively, the “Group”), is primarily engaged in the design, development, manufacturing, and sales of new energy vehicles in the People’s Republic of China (the “PRC”).

(b)History of the Group and basis of presentation for the Reorganizations

Prior to the incorporation of the Company and starting in April 2015, the Group’s business was carried out under Beijing CHJ Information Technology Co., Ltd. (or “Beijing CHJ”) and its subsidiaries. Concurrently with the incorporation of the Company in April 2017, Beijing CHJ, through one of its wholly-owned subsidiaries, entered into a shareholding entrustment agreement with the management team (the legal owners of the Company at that time) to obtain full control over the Company (the “Cayman Shareholding Entrustment Agreement”). In the same year, the Company set up its subsidiaries Leading Ideal HK Limited (“Leading Ideal HK”), Beijing Co Wheels Technology Co., Ltd. (“Wheels Technology” or “WOFE”), and a consolidated VIE, Beijing Xindian Transport Information Technology Co., Ltd. (“Xindian Information”). The Company, together with its subsidiaries and the VIE, were controlled and consolidated by Beijing CHJ prior to the reorganization.

The Group underwent a reorganization (the “2019 Reorganization”) in July 2019. The major reorganization steps are described as follows:

●

Beijing CHJ terminated the Cayman Shareholding Entrustment Agreement, and concurrently the WOFE entered into contractual agreements with Beijing CHJ and its legal shareholders so that Beijing CHJ became a consolidated VIE of the WOFE;

●

the Company issued ordinary shares and Series Pre-A, A-1, A-2, A-3, B-1, B-2 and B-3 convertible redeemable preferred shares to shareholders of Beijing CHJ in exchange for respective equity interests that they held in Beijing CHJ immediately before the 2019 Reorganization.

All 2019 Reorganization related contracts were signed by all relevant parties on July 2, 2019, and all administrative procedures of the 2019 Reorganization, including but not limited to remitting share capital of Beijing CHJ overseas for reinjecting into the Company were completed by December 31, 2019.

As the shareholdings in the Company and Beijing CHJ were with a high degree of common ownership immediately before and after the 2019 Reorganization, even though no single investor controlled Beijing CHJ or Li Auto, the transaction of the 2019 Reorganization was determined to be a recapitalization with lack of economic substance, and was accounted for in a manner similar to a common control transaction. Consequently, the financial information of the Group is presented on a carryover basis for all periods presented. The number of outstanding shares in the unaudited condensed consolidated balance sheets, the unaudited condensed consolidated statements of changes in shareholders’ equity, and per share information including the net loss per share have been presented retrospectively as of the beginning of the earliest period presented on the unaudited condensed consolidated financial statements to be comparable with the final number of shares issued in the 2019 Reorganization. Accordingly, the effect of the ordinary shares and the preferred shares issued by the Company pursuant to the 2019 Reorganization have been presented retrospectively as of the beginning of the earliest period presented in the unaudited condensed consolidated financial statement or the original issue date, whichever is later, as if such shares were issued by the Company when the Group issued such interests.

1. Organization and Nature of Operations (Continued)

In preparation for the Listing on the main board of the Stock Exchange of Hong Kong Limited (“HKEx”), the Group underwent reorganization of its corporate structure (the “2021 Reorganization”) in the second quarter of 2021. The major reorganization steps were as follows:

●

In accordance with the requirements under the Listing Decision LD43-3 of HKEx to the extent practicable, the Company underwent reorganization of the holding structure of its onshore subsidiaries and the VIEs. The 2021 Reorganization mainly involved changing certain VIEs to wholly owned or partly-owned subsidiaries of the Company, to the extent permitted under the relevant PRC laws and regulations. Please refer to Note 1 (b) (i) and (ii).

●

In April, 2021, certain new contractual arrangements were entered into to replace the original contractual arrangements in place before the completion of 2021 Reorganization. Upon the completion of 2021 Reorganization, Beijing CHJ and Leading Ideal HK’s subsidiary each held 50% of equity interest of Chongqing Lixiang Automobile which was previously a wholly owned subsidiary of Beijng CHJ.

The transactions relating to the 2021 Reorganization were accounted for as common control transactions within the Group. Accordingly, the Group’s consolidated financial information was not impacted as a result of these transactions.

In March 2022, Beijing CHJ transferred its equity interest of Chongqing Lixiang Automobile to Leading Ideal HK’s subsidiary. Consequently, Chongqing Lixiang Automobile became a wholly owned subsidiary of the Company. The transaction was accounted for a common control transaction within the Group; accordingly, there was no impact to the Group’s consolidated financial information.

The Group’s unaudited condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, the consolidated VIEs and the VIEs’ subsidiaries.

1. Organization and Nature of Operations (Continued)

As of September 30, 2022, the Company’s principal subsidiaries, the consolidated VIEs and the VIEs’ subsidiaries are as follows:


	Equity Interest Held	Date of Incorporation or Date of Acquisition	Place of Incorporation	Principal Activities	Notes
Subsidiaries
Leading Ideal HK Limited (“Leading Ideal HK”)	100%	May 15, 2017	Hong Kong, China	Investment holding
Beijing Co Wheels Technology Co., Ltd. (“Wheels Technology”)	100%	December 19, 2017	Beijing, PRC	Technology development and corporate management
Beijing Leading Automobile Sales Co., Ltd.(“Beijing Leading”)	100%	August 6, 2019	Beijing, PRC	Sales and after sales management
Jiangsu Xindian Interactive Sales and Services Co., Ltd. (“Jiangsu XD”)	100%	May 08, 2017	Changzhou, PRC	Sales and after sales management	(i)
Chongqing Lixiang Automobile Co., Ltd. (“Chongqing Lixiang Automobile”)	100%	October 11, 2019	Chongqing, PRC	Manufacturing of automobile and purchase of manufacturing equipment	(ii)
		Date of Incorporation	Place of Incorporation	Principal Activities	Notes
The VIEs
Beijing CHJ Information Technology Co., Ltd. (“Beijing CHJ”)		April 10, 2015	Beijing, PRC	Technology development
Beijing Xindian Transport Information Technology Co., Ltd. (“Xindian Information”)		March 27, 2017	Beijing, PRC	Technology development

Notes:

(i)	Jiangsu XD was Beijing CHJ’s subsidiary before the 2021 Reorganization.

(ii)

Upon the completion of 2021 Reorganization, Beijing CHJ and Leading Ideal HK’s subsidiary each held a 50% equity interest in Chongqing Lixiang Automobile which was previously a wholly owned subsidiary of Beijing CHJ. In March 2022, Beijing CHJ transferred its equity interest of Chongqing Lixiang Automobile to Leading Ideal HK’s subsidiary. Consequently, Chongqing Lixiang Automobile became a wholly owned subsidiary of the Company.

1. Organization and Nature of Operations (Continued)

(c)Impact of the COVID-19

Due to the COVID-19 pandemic and the related nationwide precautionary and control measures that were adopted in China starting in January 2020, the Company postponed the production in its Changzhou manufacturing facility after the Chinese New Year holiday in February 2020, and also experienced short term delays in the suppliers’ delivery of certain raw materials needed for production. As a result of varying levels of travel and other restrictions for public health concerns in various regions of China, the Group also temporarily postponed the delivery of Li ONE to customers. Following this temporary closure in February 2020, the Group reopened the retail stores and delivery and servicing centers and have resumed vehicle delivery to customers. Subsequent to March 31, 2020, the Group continuously increased their production capacity and delivery to normal level as the Group had recovered from the adverse impact of COVID-19 across China until the third quarter of 2021.

Since October 2021, the supply of semiconductor chips used for automotive manufacturing has experienced a global shortage following the disruption to semiconductor manufacturers due to the COVID-19 pandemic and an increase in global demand for personal computers for work-from-home economies. For example, due to the COVID-19 pandemic in Malaysia, the production of chips dedicated for the Group’s millimeter-wave radar supplier had been severely hampered, and the production and deliveries for the third quarter of 2021 had been adversely affected. Subsequent to December, 2021, the Group gradually resumed normal vehicle production by continuing to obtain the chips or other semiconductor components at a reasonable cost from multiple sources. The Group concluded that there would be no material impact on the Group’s long-term forecast.

In late March and April 2022, the COVID-19 resurgence in the Yangtze Delta region of China caused renewed and severe industry-wide disruptions in supply chain, logistics and production. The Group’s Changzhou manufacturing base is located in the center of the Yangtze Delta region, which is home to over 80% of the Group’s parts suppliers, especially in Shanghai and Kunshan. Certain suppliers in Shanghai and Kunshan temporarily terminated the production or delivery of their products completely, resulting in the Group unable to maintain adequate inventory for production demand. This had a material adverse impact on production in April 2022, resulting in delayed deliveries for customers. The Group has been working with vendors to restore production capacity with the objective to shorten the delivery waiting time for Li ONE customers. Despite the significant ongoing industry-wide parts supply chain challenges resulting from the COVID-19 pandemic, the Group’s production and delivery of vehicles gradually began to resume and sustain pre-pandemic levels beginning in May 2022.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

(a)Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with US GAAP have been condensed or omitted consistent with Article 10 of Regulation S-X. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments as necessary for the fair statement of the Company’s financial position as of December 31, 2021 and September 30, 2022, results of operations and cash flows for the nine months ended September 30, 2021 and 2022. The consolidated balance sheet at December 31, 2021 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by US GAAP. The unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the unaudited condensed consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding fiscal years. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and related footnotes for the year ended December 31, 2021. The accounting policies applied are consistent with those of the audited consolidated financial statements for the preceding fiscal year. Interim results of operations are not necessarily indicative of the results expected for the full fiscal year or for any future period.

(b)Principles of consolidation

The unaudited condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and the VIEs’ subsidiaries for which the Company is the ultimate primary beneficiary.

2. Summary of Significant Accounting Policies (Continued)

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; has the power to appoint or remove the majority of the members of the board of directors (the “Board”); to cast majority of votes at the meeting of the Board or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

A VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, is able to direct the activities and derive the economic benefits of the entity. Accordingly, the Company is considered the primary beneficiary of each VIE and consolidates each entity in accordance with US GAAP.

All significant transactions and balances between the Company, its subsidiaries, the VIEs and the VIEs’ subsidiaries have been eliminated upon consolidation.

(c)Use of estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenue and expenses during the reported period in the unaudited condensed consolidated financial statements and accompanying notes.

Significant accounting estimates reflected in the Group’s unaudited condensed consolidated financial statements, to the extent applicable, mainly include, but are not limited to, standalone selling price of each distinct performance obligation in revenue recognition and determination of the amortization period of these obligations, the valuation of share-based compensation arrangements, fair value of investments and derivative instruments, useful lives of property, plant and equipment, useful lives of intangible assets, assessment for impairment of long-lived assets and intangible assets with indefinite lives, the provision for credit losses of financial assets, inventory valuation for excess and obsolete inventories, lower of cost and net realizable value of inventories, losses on purchase commitments, product warranties, determination of vendor rebates, assessment of variable lease payments, and valuation allowance for deferred tax assets. Actual results could differ from those estimates.

(d)Functional currency and foreign currency translation

The Group’s reporting currency is the Renminbi (“RMB”). The functional currency of the Company and its subsidiary which is incorporated in Hong Kong is United States dollars (“US$”). The functional currencies of the other subsidiaries, the VIEs and the VIEs’ subsidiaries are their respective local currencies (“RMB”). The determination of the respective functional currency is based on the criteria set out by ASC 830, Foreign Currency Matters.

Transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into functional currency using the applicable exchange rates at the balance sheet date. Non-monetary items that are measured in terms of historical cost in foreign currency are measured using the exchange rates at the dates of the initial transactions. Exchange gains or losses arising from foreign currency transactions are included in the unaudited condensed consolidated statements of comprehensive income/(loss).

The financial statements of the Group’s entities of which the functional currency is not RMB are translated from their respective functional currency into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB at the exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Income and expense items are translated into RMB using the periodic average exchange rates. The resulting foreign currency translation adjustments are recorded in other comprehensive income/(loss) in the unaudited condensed consolidated statements of comprehensive income/(loss), and the accumulated foreign currency translation adjustments are presented as a component of accumulated other comprehensive income/(loss) in the unaudited condensed consolidated statements of shareholders’ equity. Total foreign currency translation adjustment loss was RMB144,620 for the nine months ended September 30, 2021 and foreign currency translation adjustment income was RMB1,285,664 for the nine months ended September 30, 2022 respectively.

2. Summary of Significant Accounting Policies (Continued)

(e)Convenience translation

Translations of balances in the unaudited condensed consolidated balance sheets, unaudited condensed consolidated statements of comprehensive loss and unaudited condensed consolidated statements of cash flows from RMB into US$ as of and for the nine months ended September 30, 2022 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB7.1135, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on September 30, 2022. No representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate on September 30, 2022, or at any other rate.

(f)Cash, cash equivalents and restricted cash

Cash and cash equivalents represent cash on hand, time deposits and highly liquid investments placed with banks or other financial institutions, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less. As of December 31, 2021 and September 30, 2022, the Group had cash held in accounts managed by online payment platforms such as China Union Pay in connection with the collection of vehicle sales for a total amount of RMB33,540 and RMB64,218, respectively, which have been classified as cash and cash equivalents on the unaudited condensed consolidated balance sheets.

Cash that is restricted as to withdrawal for use or pledged as security is reported separately on the face of the unaudited condensed consolidated balance sheets and is not included in the total cash and cash equivalents in the unaudited condensed consolidated statements of cash flows. The Group’s restricted cash mainly represents (a) the secured deposits held in designated bank accounts for issuance of letter of credit, bank guarantee and bank acceptance bill; (b) the deposits held in designated bank accounts for security of the repayment of the notes payable (Note 14).

Cash, cash equivalents and restricted cash as reported in the unaudited condensed consolidated statements of cash flows are presented separately on our unaudited condensed consolidated balance sheets as follows:


	As of
	December 31,	September 30,
	2021	2022
Cash and cash equivalents	27,854,224	37,472,617
Restricted cash	2,638,840	3,097,127
Total cash, cash equivalents and restricted cash	30,493,064	40,569,744

(g)Time deposits and short-term investments

Time deposits are those balances placed with the banks. These deposits that have original maturities longer than three months but less than one year are classified as short-term time deposits which are reflected in the unaudited condensed consolidated statements of balance sheets as “Time deposits and short‑term investments”, while the balances with original maturities longer than one year are classified as long-term time deposits which are reflected in the unaudited condensed consolidated statements of balance sheets as “Long‑term investments”.

Short-term investments are investments in financial instruments with variable interest rates. These financial instruments which have maturity dates within one year are classified as short-term investments and are reflected in the unaudited condensed consolidated statements of balance sheets as “Time deposits and short‑term investments”, while those financial instruments which have maturity dates longer than one year are classified as long-term investments in the unaudited condensed consolidated statements of balance sheets. The Group elected the fair value method at the date of initial recognition and carried these investments subsequently at fair value. Fair value is estimated based on quoted prices of similar financial products provided by financial institutions at the end of each period. Changes in the fair value are reflected in the unaudited condensed consolidated statements of comprehensive income/(loss) as “Interest income and investment income, net”.

2. Summary of Significant Accounting Policies (Continued)

(h)Trade receivables and current expected credit losses

Trade receivable primarily includes amounts of vehicle sales related to government subsidies to be collected from the government on behalf of customers. The Group provides an allowance against trade receivable based on the expected credit loss approach (see below) and writes off trade receivable when they are deemed uncollectible. No material allowance for credit loss on trade receivable was recognized for the nine months ended September 30, 2021 and 2022.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses, which introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, including, but not limited to, trade and other receivables and net investments in leases. The Group assessed that trade receivable, other current assets, and other non-current assets are within the scope of ASC 326. The Group has identified the relevant risk characteristics of trade receivables, other current assets, and other non-current assets which include size, type of the services or the products the Group provides, or a combination of these characteristics, the historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses, etc. Other key factors that influence the expected credit loss analysis include industry-specific factors that could impact the credit quality of the Group’s receivables. This is assessed at each quarter based on the Group’s specific facts and circumstances. All forward looking statements are, by their nature, subject to risks and uncertainties, many of which are beyond the Group’s control. Considering the macroeconomic and market turmoil caused by COVID-19, the Group is continuously monitoring data and trends and took the latest available information into consideration.

The Group adopted ASC 326 and several associated ASUs on January 1, 2021 using a modified retrospective approach with a cumulative effect recorded as an increase of accumulated deficit in the amount of RMB1,955. As of January 1, 2021, upon the adoption, the expected credit loss provisions for the current assets and non-current assets were RMB972 and RMB983, respectively. For the nine months ended September 30, 2021 and 2022, the Group recorded RMB3,566 and RMB15,373 in expected credit losses in selling, general and administrative expenses, respectively. As of December 31, 2021 and September 30, 2022, the expected credit loss reserves recorded in current assets were RMB2,659 and RMB14,321, and recorded in non-current assets were RMB3,757 and RMB7,468, respectively.

The Group typically does not carry significant trade receivable related to vehicle sales and related sales as customer payments are due prior to vehicle delivery, except for amounts of vehicle sales in relation to government subsidies to be collected from the government on behalf of customers. Other current assets and other non-current assets primarily consist of other receivables and deposits. The following table summarizes the activity in the allowance for credit losses related to trade receivable, other current assets and other non-current assets for the nine months ended September 30, 2021 and 2022:


	For the Nine Months Ended
	September 30, 2021	September 30, 2022
Balance as of the beginning of the period	1,955	6,416
Provisions	4,038	20,954
Reversal	(472)	(5,581)
Balance as of the end of the period	5,521	21,789

(i)Derivative instruments

Derivative instruments are measured at fair value and recognized as either assets or liabilities on the consolidated balance sheets in either other current or non-current assets or other current liabilities or non-current liabilities depending upon maturity and commitment. Changes in the fair value of derivatives are either recognized periodically in the unaudited condensed consolidated statements of comprehensive income/(loss) or in other comprehensive income/(loss) depending on the use of the derivatives and whether they qualify for hedge accounting.

2. Summary of Significant Accounting Policies (Continued)

The Group selectively uses financial instruments to manage market risk associated with exposure to fluctuations in foreign currency rates with foreign exchange forwards and option contracts. These financial exposures are monitored and managed by the Group as an integral part of its risk management program. The Group does not engage in derivative instruments for speculative or trading purposes. The Group’s derivative instruments are not qualified for hedge accounting, thus changes in fair value are recognized in “Interest income and investment income, net” in the unaudited condensed consolidated statements of comprehensive income/(loss). The cash flows of derivative financial instruments are classified in the same category as the cash flows from the items subject to the economic hedging relationships. The estimated fair value of the derivatives is determined based on relevant market information. These estimates are calculated with reference to the market rates using industry standard valuation techniques.

Derivative instruments are presented as net if rights of setoff exist, with all of the following conditions met: (a) each of two parties owes the other determinable amounts; (b) the reporting party has the right to set off the amount owed with the amount owed by the other party; (c) the reporting party intends to set off; and (d) the right of setoff is enforceable at law.

The Group did not have any outstanding derivative account balances instruments as of September 30, 2022 due to related maturities prior to December 31, 2021. The Group recorded a fair value gain of RMB61,241 and nil in Interest income and investment income, net on the unaudited condensed consolidated statement of comprehensive loss for the nine months ended September 30, 2021 and 2022, respectively.

(j)Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is calculated on the weighted average basis and includes all costs to acquire and other costs to bring the inventories to their present location and condition. The Group records inventory write-downs for excess or obsolete inventories based upon assumptions on current and future demand forecasts. If the inventory on hand is in excess of future demand forecast, the excess amounts are written off. The Group also reviews inventory to determine whether its carrying value exceeds the net amount realizable upon the ultimate sale of the inventory. This requires the determination of the estimated selling price of the vehicles less the estimated cost to convert inventory on hand into a finished product. Once inventory is written-down, a new, lower-cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. The Company recognized RMB51,256 and RMB802,799 in write-downs of inventories to net realizable value and losses on inventory purchase commitments in cost of sales for the nine months ended September 30, 2021 and 2022, respectively.

(k)Property, plant and equipment, net

Property, plant and equipment are stated at cost less accumulated depreciation and impairment loss, if any. Property, plant and equipment are depreciated at rates sufficient to write off their costs less impairment and residual value, if any, over their estimated useful lives on a straight-line basis. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the related assets. Direct costs that are related to the construction of property, equipment and software and incurred in connection with bringing the assets to their intended use are capitalized as construction in progress. Interest expense on specific outstanding debt is capitalized during the period of significant capital asset construction. Capitalized interest expense on construction-in-progress is included within property, plant and equipment and is amortized over the life of the related assets. Motor vehicles represent vehicles used for the Group’s daily operation, including driving testing purpose. Construction in progress is transferred to specific property, equipment and software items and the depreciation of these assets commences when the assets are ready for their intended use.

2. Summary of Significant Accounting Policies (Continued)

The estimated useful lives are as follows:

		Useful Lives
Buildings		20 years
Buildings improvements		5 to 10 years
Production machineries and facilities		3 to 10 years
Equipment		3 to 5 years
Motor vehicles		2 to 4 years
Mold and tooling		Unit-of-production
Leasehold improvements		Shorter of the estimated useful life or lease term

The cost of maintenance and repairs is expensed as incurred, whereas the cost of renewals and betterment that extends the useful lives of property, plant and equipment is capitalized as additions to the related assets. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in the unaudited condensed consolidated statements of comprehensive income/(loss).

The Company reviews the estimated useful lives of its Property, plant and equipment on an ongoing basis. In evaluating useful lives, the Company considers how long assets will remain functionally efficient and effective, given levels of production, competitive factors, and the economic environment. If the assessment indicates that the assets will continue to be used for a shorter or longer period than previously anticipated, the useful life of the assets is revised, resulting in a change in estimate. Changes in estimates are accounted for on a prospective basis by depreciating the assets’ current carrying values over their revised remaining useful lives.

As of September 30, 2022, the Company completed an assessment of the estimated units of production of certain molds and toolings and the useful lives of certain production facilitites, all of which can only be used for Li ONE vehicle production. The Company’s assessment in the third quarter of 2022 which reflects the planned cessation of Li ONE production by the end of October 2022, indicated that certain production facilities directly used for Li ONE vehicle production will not be used for the period of time originally estimated. As a result, the Company changed its estimates of useful lives for the certain production facilities from 10 years to 3 years, after considering the Company’s planned model succession from 2021 Li ONE to Li L8. In addition, depreciation of certain molds and toolings that are directly used in Li ONE production was also accelerated based on management’s revised best estimate for 2021 Li ONE’s production volume using the unit-of-production depreciation method. As a result of these changes in estimates, which are treated prospectively, the Company recorded in inventories and cost of sales an increase in depreciation expense of RMB225,791, for the nine months ended September 30, 2022.

(l)Product warranties

The Group provides product warranties on all new vehicles based on the contracts with its customers at the time of sale of vehicles. The Group accrues a warranty reserve for the vehicles sold by multiplying the expected unit costs for warranty services by the sales volume, which includes the best estimate of projected costs to repair or replace items under warranties. These estimates are primarily based on the estimates of the nature, frequency and average costs of future claims. These estimates are inherently uncertain given the Group’s relatively short history of sales, and changes to the historical or projected warranty experience may cause material changes to the warranty reserve in the future. The portion of the warranty reserve expected to be incurred within the next 12 months is included within the accrued and other current liabilities while the remaining balance is included within other non-current liabilities in the unaudited condensed consolidated balance sheets. Warranty cost is recorded as a component of cost of sales in the unaudited condensed consolidated statements of comprehensive income/(loss). The Group reevaluates the adequacy of the warranty accrual on a regular basis.

The Group recognizes the benefit from a recovery of the costs associated with the warranty when specifics of the recovery have been agreed with the Group’s suppliers and the amount of the recovery is virtually certain.

2. Summary of Significant Accounting Policies (Continued)

The accrued warranty activity consists of the following:


	For the Nine Months Ended
	September 30, 2021	September 30, 2022
Accrued warranty at beginning of the period	233,366	842,345
Warranty cost incurred	(15,069)	(35,128)
Provision for warranty	385,730	482,742
Accrued warranty at end of the period	604,027	1,289,959
Including: Accrued warranty, current	111,645	152,648
Accrued warranty, non-current	492,382	1,137,311

(m)Convertible debt

The Group recognized convertible debt issued in 2021 in the long-term borrowings on the unaudited condensed consolidated balance sheets.

In August 2020, the FASB issued ASU 2020-06 Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)(the “ASU 2020-06”). The Group determined to early adopt ASU 2020-06 from January 1, 2021. Since the ASU 2020-06 amended the guidance on convertible debt instruments by removing accounting models for the instruments with beneficial conversion features and cash conversion features. Accordingly, there is no need to consider beneficial conversion feature or cash conversion features for the convertible debt.

The Group assessed the convertible debt under ASC 815 and ASU 2020-06 and concluded that:

(i)Since the conversion option is considered indexed to the Company’s own stock and classified in shareholders’ (deficit)/ equity, bifurcation of conversion option from the convertible debt is not required as the scope exception prescribed in ASC 815-10-15-74 is met;

(ii)The repurchase option is considered clearly and closely related to its debt host and does not meet the requirement for bifurcation.

(iii)The Group presented the issuance costs of debt as a direct deduction from the related debt during the periods presented and subsequently amortized as interest expense over the contractual life.

(iv)The related accretion is recorded as interest expense in the unaudited condensed consolidated statement of comprehensive loss over the estimated term using the effective interest method.

(n)Revenue recognition

The Group launched the first volume manufactured extended-range electric vehicle, Li ONE, to the public in October 2018 and started making deliveries to customers in the fourth quarter of 2019. The Group released the 2021 Li ONE in May 2021, which is upgraded version of Li ONE and terminated the production of the first model Li ONE in May 2021. In June 2022, the Company launched extended-range electric vehicle Li L9 to the public and started making deliveries to customers in August 2022. Revenues of the Group are primarily derived from sales of vehicles, along with multiple distinct performance obligations within each sale of vehicle, as well as the sales of Li Plus Membership.

The Group adopted ASC 606, Revenue from Contracts with Customers, on January 1, 2018 by applying the full retrospective method.

2. Summary of Significant Accounting Policies (Continued)

Revenue is recognized when or as the control of the goods or services is transferred to a customer. Depending on the terms of the contract and the laws that apply to the contract, control of the goods and services may be transferred over time or at a point in time. Control of the goods and services is transferred over time if the Group’s performance:

●

provides all of the benefits received and consumed simultaneously by the customer;

●

creates and enhances an asset that the customer controls as the Group performs; or

●

does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

If control of the goods and services transfers over time, revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control of the goods and services.

Contracts with customers may include multiple performance obligations. For such arrangements, the Group allocates revenue to each performance obligation based on its relative standalone selling price. The Group generally determines standalone selling prices based on the prices charged to customers. If the standalone selling price is not directly observable, it is estimated using expected cost plus a margin, depending on the availability of observable information. Assumptions and estimations have been made in estimating the relative selling price of each distinct performance obligation, and changes in judgments on these assumptions and estimates may impact the revenue recognition.

2. Summary of Significant Accounting Policies (Continued)

When either party to a contract has performed, the Group presents the contract in the statement of financial position as a contract asset or a contract liability, depending on the relationship between the entity’s performance and the customer’s payment.

A contract asset is the Group’s right to consideration in exchange for goods and services that the Group has transferred to a customer. A receivable is recorded when the Group has an unconditional right to consideration. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due.

If a customer pays consideration or the Group has a right to an amount of consideration that is unconditional, before the Group transfers a good or service to the customer, the Group presents the contract liability when the payment is made, or a receivable is recorded (whichever is earlier). A contract liability is the Group’s obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer.

Vehicle sales

The Group generates revenue from sales of vehicles, currently the Li L9 and Li ONE, together with a number of products and services. There are multiple distinct performance obligations explicitly stated in the sales contracts including sales of Li L9 and Li ONE, charging stalls, vehicle internet connection services, firmware over-the-air upgrades (or “FOTA upgrades”) and initial owner extended lifetime warranty subject to certain conditions, which are accounted for in accordance with ASC 606. The standard warranty provided by the Group is accounted for in accordance with ASC 460, Guarantees, and the estimated costs are recorded as a liability when the Group transfers the control of Li L9 and Li ONE to a customer.

Customers only pay the amount after deducting the government subsidies to which they are entitled for the purchase of new energy vehicles, which is applied on their behalf and collected by the Group from the government according to the applicable government policy. The Group has concluded that government subsidies should be considered as a part of the transaction price it charges the customers for the new energy vehicles, as the subsidy is granted to the purchaser of the new energy vehicles and the purchaser remains liable for such amount in the event the subsidies were not received by the Group due to his fault such as refusal or delay of providing application information. Since July 2020, the Group was no longer eligible for the government subsidies as the Group’s selling price of vehicles is higher than threshold in the circular issued by the certain PRC authorities.

The overall contract price is allocated to each distinct performance obligation based on the relative estimated standalone selling price in accordance with ASC 606. The revenue for sales of the Li L9 and Li ONE and charging stalls are recognized at a point in time when the control of the product is transferred to the customer. For the vehicle internet connection service and FOTA upgrades, the Group recognizes the revenue using a straight-line method over the service period. As for the initial owner extended lifetime warranty, given the limited operating history and lack of historical data, the Group recognizes the revenue over time based on a straight-line method over the extended warranty period initially, and will continue monitoring the cost pattern periodically and adjust the revenue recognition pattern to reflect the actual cost pattern as it becomes available.

As the contract price for the vehicle and all embedded products and services must be paid in advance, which means the payments are received prior to the transfer of goods or services by the Group, the Group records a contract liability (deferred revenue) for the allocated amount regarding those unperformed obligations.

Sales of Li Plus Membership

The Group also sells the Li Plus Membership to enrich the ownership experience of customers. Total Li Plus Membership fee is allocated to each performance obligation based on the relative estimated standalone selling price. And the revenue for each performance obligation is recognized either over the service period or at a point in time when the relevant goods or service is delivered or when the membership expired, whichever is earlier.

2. Summary of Significant Accounting Policies (Continued)

Customer loyalty points

Beginning in January 2020, the Group offers customer loyalty points, which can be used in the Group’s online store to redeem the Group’s merchandise or services. The Group determines the value of each customer loyalty point based on cost of the Group’s merchandise or service that can be obtained through redemption of customer loyalty points.

The Group concludes the customer loyalty points offered to customers in connection with the purchase of the Li L9 and Li ONE is a material right and is considered as a separate performance obligation according to ASC 606, and should be taken into consideration when allocating the transaction price of the sales of vehicle. The amount allocated to the customer loyalty points as separate performance obligation is recorded as contract liability (deferred revenue) and revenue should be recognized when the customer loyalty points are used or expired.

Customers or users of the mobile application can also obtain customer loyalty points through other ways, such as referring new customers to purchase the vehicles via the mobile application. The Group offers these customer loyalty points to encourage user engagement and generate market awareness. As a result, the Group accounts for such points as selling and marketing expenses with a corresponding liability recorded under accruals and other current liabilities upon the points offering.

Sales of Automotive Regulatory Credits

Pursuant to the measurements and policies promulgated by China’s Ministry of Industry and Information Technology (“MIIT”), each of the vehicle manufacturers or importers above a certain scale is able to earn Automotive Regulatory Credits by manufacturing or importing New Energy Vehicle (“NEV”). The Automotive Regulatory Credits are tradable and sold to other companies through a credit management system established by MIIT. The Group earns the tradable new energy vehicle credits from the production of the Group’s electric vehicles. The Group sells these credits at agreed price to other regulated entities who can use the credits to comply with the regulatory requirements. The Group recognized revenue on the sale of Automotive Regulatory Credits at the time control of the Automotive Regulatory Credits were transferred to the purchasing party in September 2021 as MIIT has completed the review and approved the sale of Automotive Regulatory Credits, the related NEV Credits have been transferred to purchasing party. The full consideration for sale of Automotive Regulatory Credits was collected by the Group in the fourth quarter of 2021.

Practical expedients and exemptions

The Group elects to expense the costs to obtain a contract as incurred given the majority of the contract considerations for vehicle sales are allocated to the sales of Li L9 and Li ONE and recognized as revenue upon transfer of control of the vehicles, which is within one year after entering the sales contracts.

(o)Government grants

The Group’s PRC based subsidiaries received government subsidies from certain local governments. The Group’s government subsidies consist of specific subsidies and other subsidies. Specific subsidies are subsidies that the local government has provided for a specific purpose, such as research and development purpose, construction of production plants and facilities and capacity subsidies related to the Chongqing Manufacturing Base. Other subsidies are the subsidies that the local government has not specified its purpose for and are not tied to future trends or performance of the Group, receipt of such subsidy income is not contingent upon any further actions or performance of the Group and the amounts do not have to be refunded under any circumstances. The Group recorded specific purpose subsidies as a non-current liability if the amount is received in advance. For specific subsidies, upon government acceptance of the related project construction or asset acquisition, the specific purpose subsidies are recognized to reduce the cost of asset acquisition. Other subsidies are recognized as Others, net upon receipt as further performance by the Group is not required.

2.Summary of Significant Accounting Policies (Continued)

As of December 31, 2021 and September 30, 2022, other non-current liabilities included nil and RMB408,666 in deferred government grants relating to specific government subsidies for construction production plants and facilities and product development, respectively. These government grants are expected to be amortized using the straight-line method as a deduction of the depreciation expense of these assets over their useful lives upon construction and when placed in use.

(p)Fair value

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurement for assets and liabilities required or permitted to be either recorded or disclosed at fair value, the Group considers the principal or most advantageous market in which it would transact, and it also considers assumptions that market participants would use when pricing the asset or liability.

Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value:

Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2—Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities.

Level 3—Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates.

(q)Loss per share

Basic net loss per share is computed using the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share in the loss. Diluted net loss per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period. Potential ordinary shares include ordinary shares issuable upon the exercise of outstanding share options using the treasury stock method and ordinary shares issuable upon the conversion of convertible debt using the if-converted method. Potential ordinary shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares would be anti-dilutive.

(r)Segment reporting

ASC 280, Segment Reporting, establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers.

Based on the criteria established by ASC 280, the Group’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole, and hence, the Group has only one reportable segment. The Group does not distinguish between markets or segments for the purpose of internal reporting. As the Group’s long-lived assets are substantially located in the PRC, no geographical segment information is presented.

Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2022

Recent Accounting Pronouncements

Recent Accounting Pronouncements

3. Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, to remove specific exceptions to the general principles in Topic 740 and to simplify accounting for income taxes. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. The Group adopted this ASU from January 1, 2021. The ASU did not have a material impact on the unaudited condensed consolidated financial statements.

In January 2020, the FASB issued Accounting Standards Update No. 2020-01, Investments — Equity Securities (Topic 321), Investments — Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The amendments clarified that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The amendments also clarified that for the purpose of applying paragraph 815-10-15-141(a) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825. An entity also would evaluate the remaining characteristics in paragraph 815-10-15-141 to determine the accounting for those forward contracts and purchased options. The Group adopted ASU No. 2020-01 from January 1, 2021, which did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Concentration and Risks

9 Months Ended

Sep. 30, 2022

Concentration and Risks

Concentration and Risks

4. Concentration and Risks

(a)Concentration of credit risk

Assets that potentially subject the Group to significant concentrations of credit risk primarily consist of cash and cash equivalents, restricted cash, time deposits and short-term investments, long-term deposits and long-term financial instruments. The maximum exposure of such assets to credit risk is their carrying amounts as of the balance sheet dates. As of December 31, 2021 and September 30, 2022, most of the Group’s cash and cash equivalents, restricted cash and time deposits and short-term investments, long-term deposits and long-term financial instruments were held by major financial institutions located in the PRC and Hong Kong which management believes are of high credit quality. On May 1, 2015, China’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in the PRC are required to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. This Deposit Insurance Regulation would not be effective in providing complete protection for the Group’s accounts, as its aggregate deposits are much higher than the compensation limit. However, the Group believes that the risk of failure of any of these PRC banks is remote. The Group expects that there is no significant credit risk associated with cash and cash equivalents, time deposits and short-term investments, long-term deposits and long-term financial instruments which are held by reputable financial institutions in the jurisdictions where the Company, its subsidiaries and the VIEs are located. The Group believes that it is not exposed to unusual risks as these financial institutions have high credit quality. The Group has no significant concentrations of credit risk with respect to the assets mentioned above.

The Group relies on a limited number of third parties to provide payment processing services (“payment service providers”) to collect amounts due from customers. Payment service providers are financial institutions, credit card companies and mobile payment platforms such as Alipay and WeChat Pay, which the Group believes are of high credit quality.

4. Concentration and Risks (Continued)

(b)Currency convertibility risk

The PRC government imposes controls on the convertibility of RMB into foreign currencies. The Group’s cash and cash equivalents, restricted cash, time deposits and short-term investments and long-term financial instruments denominated in RMB that are subject to such government controls amounted to RMB24,509,656 and RMB50,848,631 as of December 31, 2021 and September 30, 2022, respectively. The value of RMB is subject to changes in the central government policies and to international economic and political developments affecting supply and demand in the PRC foreign exchange trading system market. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (the “PBOC”). Remittances in currencies other than RMB by the Group in the PRC must be processed through PBOC or other Chinese foreign exchange regulatory bodies which require certain supporting documentation in order to process the remittance.

(c)Foreign currency exchange rate risk

The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the People’s Bank of China. The Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. The value of Renminbi against the U.S. dollar and other currencies is affected by changes in China’s political and economic conditions and by China’s foreign exchange policies, among other things. The appreciation of the RMB against the US$ was approximately 0.6% for the nine months ended September 30, 2021. The depreciation of the RMB against the US$ was approximately 11.4% for the nine months ended September 30, 2022. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the US$ in the future.

Trade receivable

9 Months Ended

Sep. 30, 2022

Trade receivable

Trade receivable

5. Trade receivable

An aging analysis of the trade receivable as of December 31, 2021 and September 30, 2022, based on the recognition date and net of credit loss provisions, is as follows:


	As of
	December 31, 2021	September 30, 2022
Within 3 months	16,462	17,488
Between 3 months and 6 months	890	1,961
Between 6 months and 1 year	—	—
More than 1 year	103,189	13,133
Total	120,541	32,582

Inventories

9 Months Ended

Sep. 30, 2022

Inventories

Inventories

6. Inventories

Inventories consist of the following:


	As of
	December 31, 2021	September 30, 2022
Raw materials, work in process and supplies	1,468,801	3,004,293
Finished products	149,089	2,511,488
Total	1,617,890	5,515,781

Raw materials, work in process and supplies as of December 31, 2021 and September 30, 2022 primarily consist of materials for volume production which will be transferred into production cost when incurred as well as spare parts used for after sales services.

Finished products include vehicles ready for transit at production plants, vehicles in transit to fulfil customers’ orders, new vehicles available for immediate sales at the Group’s sales and servicing center locations.

The Company recognized inventory write-downs and losses on inventory purchase commitments which were recorded in cost of sales of RMB51,256 and RMB802,799 for the nine months ended September 30, 2021 and 2022, respectively. The amount recognized for the nine months ended September 30, 2022 was related primarily to the Company’s plan to cease production of Li ONE vehicles.

Prepayments and Other Current Assets

9 Months Ended

Sep. 30, 2022

Prepayments and Other Current Assets

Prepayments and Other Current Assets

7. Prepayments and Other Current Assets

Prepayments and other current assets consist of the following:


	As of
	December 31, 2021	September 30, 2022
Deductible VAT input	118,177	630,369
Prepaid rental and deposits	48,929	276,577
Prepayments to vendors	218,660	240,345
Receivables related to rebate	28,491	—
Others	68,615	326,561
Less:Allowance for Credit Losses	(2,192)	(14,172)
Total	480,680	1,459,680

Property, Plant and Equipment, Net

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment, Net.

Property, Plant and Equipment, Net

8. Property, Plant and Equipment, Net

Property, plant and equipment and related accumulated depreciation were as follows:


	As of
	December 31, 2021	September 30, 2022
Construction in process ⁽ⁱ⁾	1,942,953	3,834,714
Mold and tooling	1,098,392	2,202,863
Production machineries and facilities⁽ⁱⁱ⁾	804,281	2,192,717
Leasehold improvements	660,902	929,625
Buildings	409,123	877,066
Equipment	266,745	514,047
Motor vehicles	59,702	369,586
Buildings improvements	297,163	317,229
Total	5,539,261	11,237,847
Less: Accumulated depreciation⁽ⁱⁱⁱ⁾	(983,222)	(1,838,044)
Less: Accumulated impairment loss ^(iv)	(57,770)	(38,299)
Total property, plant and equipment, net	4,498,269	9,361,504

The Group recorded depreciation expense of RMB374,732 and RMB771,712 for the nine months ended September 30, 2021 and 2022 respectively.

(i)

Construction in process is primarily comprised of production facilities, equipment and mold and tooling related to manufacturing of the extended-range electric SUV vehicles and BEV models and a portion of Changzhou Manufacturing Base construction.

In July 2021, the Group signed a memorandum and a series of agreements (collectively “Beijing Manufacturing Base Agreements”) for collaboration on a construction and expansion project of an automobile manufacturing plant, for the Group’s specific use, in Shunyi District, Beijing, with an enterprise affiliated with the Beijing local government (“the Developer Enterprise”). Since May, 2022, the Group was entitled to lease the plant facility from the Developer Enterprise (responsible for the construction of the plant) with exemption of rental expenses to September 2028, and agreed to acquire the plant in September 2028. In October 2021, construction commenced on the Beijing Manufacturing Base, which is scheduled to be put into use in 2023. As of September 30, 2022, RMB404,111 of construction in process and along with RMB242,124 of other non-current liabilities were recognized in the unaudited condensed consolidated balance sheet.

8. Property, Plant and Equipment, Net (Continued)

(ii)

On August 27, 2021, Beijing CHJ entered into an investment agreement with Mianyang Xinchen(“Xinchen”), a wholly owned subsidiary of Xinchen China Power Holdings Limited, relating to the formation of Sichuan Li Xinchen Technology Co., Ltd (“Sichuan Li Xinchen”) in Mianyang, Sichuan Province, China. According to the investment agreement, Bejing CHJ has a 51% equity interest in Sichuan Li Xinchen and has the right to nominate three board members (out of five), therefore, providing Beijing CHJ with a controlling interest over Sichuan Li Xinchen. In June 2022, Sichuan Li Xinchen received a capital contribution of long-lived assets amounting to RMB228,668 from Xinchen and completed the necessary legal procedures as required in the investment agreement (pursuant to which Bejing CHJ will maintain a 51% equity interest).

(iii)

As of September 30, 2022, the Company completed a necessary assessment of the estimated units of production of certain molds and toolings and the useful lives of certain production facilities directly used for Li ONE vehicle production. The assessment was determined to be necessary as a result of the Company’s decision during the third quarter, 2022 to cease Li ONE production by the end of October 2022 (as a result of the Company’s planned migration to the Li L8 model). As a result of this assessment, the Company changed the estimated useful lives relating to dedicated Li ONE production facilities from 10 years to 3 years. In addition, depreciation of certain molds and toolings that are directly used in Li ONE production was also accelerated based on management’s best estimate for 2021 Li ONE’s production volume when using the unit-of-production depreciation method. As a result, the effect of these changes in estimates, accounted for on a prospective basis, was an increase in depreciation expense of RMB225,791, which is recorded in inventories and cost of sales for the nine months ended September 30, 2022.

(iv)

The Group launched 2021 Li ONE in May 2021, which subsequently led to a reduction in production and sales volume relating to the first model Li ONE. As of December 31, 2021, the Group recorded an impairment loss of RMB27,388 on its production facilities and molds and toolings used in the production of the first model Li ONE as a significant portion of the carrying value of these assets are not expected to be recovered in the foreseeable future. The Group recorded an impairment loss of RMB27,388 and nil for property, plant and equipment for the nine months ended September 30, 2021 and 2022, respectively.

Intangible Assets, Net

9 Months Ended

Sep. 30, 2022

Intangible Assets, Net

Intangible Assets, Net

9. Intangible Assets, Net

Intangible assets and related accumulated amortization were as follows:


	As of
	December 31, 2021	September 30, 2022
Automotive Manufacturing Permission	647,174	647,174
Insurance Agent License	—	35,000
Indefinite-lived intangible assets	647,174	682,174
Software	137,576	196,705
Patents	694	694
Definite‑lived intangible assets	138,270	197,399
Less: Accumulated amortization
Software	(33,290)	(46,849)
Patents	(694)	(694)
Accumulated amortization	(33,984)	(47,543)
Definite‑lived intangible assets, net	104,286	149,856
Total intangible assets, net	751,460	832,030

9. Intangible Assets, Net (Continued)

The newly acquired Insurance Agent License is considered to be an indefinite lived intangible asset and is carried at cost less any subsequent impairment loss. The Group believes, based upon regulatory precedent, that ongoing required license renewals (as approved by government authorities) is a normal activity, those providing the basis for the indefinite life assumption.

The Group recorded amortization expense of RMB7,843 and RMB13,559 for the nine months ended September 30, 2021 and 2022, respectively.

As of September 30, 2022, amortization expense related to intangible assets for future periods are estimated to be as follows:


		As of September 30,
		2022
Year ending September 30, 2023		22,341
Year ending September 30, 2024		19,501
Year ending September 30, 2025		16,798
Year ending September 30, 2026		15,925
Thereafter		75,291
Total		149,856

Leases

9 Months Ended

Sep. 30, 2022

Leases

Leases

10. Leases

Acquisition of Changzhou Manufacturing Base Phase I and Phase II and termination of lease agreements

In November 2021, Jiangsu CHJ, as a subsidiary of the Group, entered into an equity transfer agreement to acquire an 100% equity interest in Changzhou Chehejin which owns the legal title of Changzhou Manufacturing Base Phase I and Phase II Land use rights and Plants. According to the equity transfer agreement, the total consideration for this transaction was RMB567,118 in cash, of which RMB537,009 was paid as of September 30, 2022. Upon the completion of the transaction, the legal titles of Changzhou Manufacturing Base Phase I and II, including Land use rights and Plants, were transferred to the Group, and the original lease agreements were terminated accordingly.

There were no inputs and substantive processes acquired to significantly contribute to the ability to create outputs (no workforce or revenue supporting processes were acquired in connection with this transaction).Accordingly, this transaction was accounted for as an asset acquisition.

According to ASC 842-20-40-2, the termination of a lease that results from the purchase of an underlying asset by the lessee is not the type of termination of a lease contemplated but, rather, is an integral part of the purchase of the underlying asset. Upon the Group’s purchase of the Changzhou Manufacturing Base Phase I and II Land use right and Plants, the difference between the total consideration of this transaction and the carrying amount of the lease liabilities arising from Phase I assets and short-term borrowings arising from Phase II assets immediately prior to the transaction was recorded as an adjustment of the carrying amount of the asset, with an amount of RMB47,876 on the consolidated balance sheet as of December 31, 2021.

Acquisition of land use rights in Changzhou and Chongqing

For the nine months ended September 30, 2022, the Group acquired land use rights to construct production plants and facilities for manufacturing vehicles of the Group in Changzhou and Chongqing, the PRC. The total consideration of land use rights was RMB683,433.

Land use rights are classified as an operating lease and are recorded at cost, as a right of use asset less accumulated amortization. Amortization is provided on a straight-line basis over the estimated useful lives which are 50 years that represent the terms of land use rights certificate. The Group recorded amortization of land use rights in Changzhou and Chongqing of RMB9,112 for the nine months ended September 30, 2022.

Other Non-current Assets

9 Months Ended

Sep. 30, 2022

Other Non-current Assets

Other Non-current Assets

11. Other Non-current Assets

Other non-current assets consist of the following:


	As of
	December 31, 2021	September 30, 2022
Long-term deposits	653,030	1,025,566
Prepayments for purchase of property, plant and equipment ⁽ⁱ⁾	1,051,415	676,438
Deductible VAT input, non-current	263,390	412,696
Others	16,998	89,318
Less: Allowance for credit losses	(3,757)	(7,468)
Total	1,981,076	2,196,550

(i)

Prepayments for purchase of property, plants and equipment primarily consists of production facilities, leasehold improvements, equipment and mold and tooling related to manufacturing of the extended-range electric SUV vehicles and BEV models, a portion of Beijing, Chongqing and Changzhou Manufacturing Bases construction and production facilities and equipment relating to manufacturing of engines and parts of Sichuan Li Xinchen.

Long-term Investments

9 Months Ended

Sep. 30, 2022

Long-term Investments.

Long-term Investments

12. Long-term Investments

The Group’s long-term investments on the consolidated balance sheets consisted of the following:


	As of
	December 31, 2021	September 30, 2022
Equity investments:
Equity Method	34,704	184,447
Equity Security With Readily Determinable Fair Values	28,452	23,207
Equity Securities Without Readily Determinable Fair Values	93,150	508,730
Long-term held-to-maturity investments:
Long-term time deposits	—	714,518
Long-term financial instruments	—	50,085
Total Long-term Investments	156,306	1,480,987

Equity Method

On September 11, 2018, the Group acquired a 49% entity interest in Beijing Judianchuxing Technology Limited (“Beijing Judianchuxing”), which is a company established with another shareholder holding a 51% interest. The Group paid cash consideration of RMB98,000 for its equity interest, On January 30, 2019, the Group invested another RMB98,000 into the same venture proportionately with the other investor thereby maintaining its 49% equity interest. The Group has significant influence over the venture and applies the equity method in accounting for this investment. The proportionate share of the net loss or income of equity method investees are recorded in “Others, net” in the consolidated statements of comprehensive loss. As of September 30, 2022, the Group’s share of the venture’s cumulative net losses have exceeded its cost basis, thereby resulting in a carrying value of RMB0.

In July 2021, the Group entered into an agreement with Suzhou Huichuan United Power System Co., LTD (“Suzhou Huichuan”) to establish Changzhou Huixiang New Energy Auto Parts Co., LTD (“Changzhou Huixiang”). The Group should pay RMB73,500 in registered capital, representing a 49% equity interest in Changzhou Huixiang, while Suzhou Huichuan should pay RMB76,500 in registered capital, representing a 51% equity interest in Changzhou Huixiang. The Group has significant influence in Changzhou Huixiang and therefore the investment is accounted for using the equity method. As of September 30, 2022, the Group paid RMB30,000 out of its total RMB73,500 investment commitment.

The Group performs an impairment assessment of its equity method investments whenever events or changes in circumstances indicate that the carrying value of the investment may not be fully recoverable. No impairment of equity method investments was recognized for the nine months ended September 30, 2021 and 2022.

12. Long-term Investments (Continued)

Equity Security with Readily Determinable Fair Values

Equity security with readily determinable fair values are marketable equity securities which are publicly traded stocks measured at fair value.

The following table shows the carrying amount and fair value of equity securities with readily determinable fair values:


			Foreign Currency
Cango Inc.	Cost Basis	Unrealized Loss	Translation	Fair Value
As of December 31, 2021	100,303	(73,535)	1,684	28,452
As of September 30, 2022	100,303	(81,237)	4,141	23,207

The Company purchased 2,633,644 shares of Series C preferred shares issued by Cango Inc. (“Cango”), with a total cash consideration of US$15,634 (RMB100,303) in 2018. This investment was initially recorded as an equity holding without a readily determinable fair value given Cango was still a privately held company at that time. In July 2018, Cango completed its listing on the New York Stock Exchange (“Cango IPO”) and the Series C preferred shares held by the Company were converted to Class A ordinary shares of Cango.

Upon the completion of Cango IPO, the Company reclassified this investment from equity securities without readily determinable fair value to equity securities with readily determinable fair value. These securities are valued using the market approach based on the quoted prices in active markets at the reporting date. The Company classifies the valuation techniques that use these inputs as Level 1 of fair value measurements.

Any unrealized gain or loss is recognized in Interest income and investment income, net in the unaudited condensed consolidated statements of comprehensive loss.

Equity Securities without Readily Determinable Fair Values

Equity securities without determinable fair value represent investments in privately held companies with no readily determinable fair value. The Group’s investments are preferred shares, which are not considered as common stock or in substance common stock. Upon adoption of ASU 2016-01 on January 1, 2018, the Group elected the measurement alternative and recorded these investments at cost, less impairment (if any), adjusted for subsequent observable price changes.

In March 2022, one of the Group’s subsidiaries—Chongqing Chezhiyuan, entered into an agreement with Xin Wang Da Electronics Limited (“Xin Wang Da Electronics”), an A-share listed company engaging in design, production and sale of lithium battery cells and modules to purchase certain Series Pre-A preferred shares of Xin Wang Da Electric Vehicle and Battery Limited (“the investee”), a subsidiary of Xin Wang Da Electronics. This transaction, with a total consideration of RMB400,000, resulted in the Group’s 3.2% equity ownership in the investee. As of September 30,2022, Chongqing Chezhiyuan has fully paid the investment consideration of RMB400,000.

Impairment charges of nil and RMB7,200 were recorded in Interest income and investment income, net in the unaudited condensed consolidated statements of comprehensive loss for the nine months ended September 30, 2021 and 2022, respectively.

12. Long-term Investments (Continued)

Long-term time deposits

Long-term time deposits are those balances placed with the banks with original maturities longer than one year.

Long-term financial instruments

Long-term financial instruments are investments in financial instruments with variable interest rates and maturity dates greater than one year. The Group elected the fair value method at the date of initial recognition and carried these investments subsequently at fair value. Fair value is estimated based on quoted prices of similar financial products provided by financial institutions at the end of each period. Changes in the fair value are reflected in the unaudited condensed consolidated statements of comprehensive income/(loss) as “Interest income and investment income, net”.

Short-term Borrowings and Long-term Borrowings

9 Months Ended

Sep. 30, 2022

Short-term Borrowings and Long-term Borrowings

Short-term Borrowings and Long-term Borrowings

13. Short-term Borrowings and Long-term Borrowings

Borrowings consist of the following:

As of

Interest Rate

December 31,

September 30,

Maturity Date

Classification

Principal Amount

Per Annum

2021

2022

Convertible debt ⁽¹⁾

May 1, 2028

Non-current

US$

862,500

0.25%

5,397,941

6,024,126

Secured bank loan ⁽²⁾

February 15, 2027

Current and Non-current

RMB

900,000

5-year LPR - 0.40%

—

900,000

Credit guaranteed borrowing ⁽³⁾

June 29, 2024

Current and Non-current

US$

100,000

SOFR

—

709,980

Secured bank loan ⁽⁴⁾

September 28, 2029

Current and Non-current

RMB

600,000

4.80%

600,000

Secured borrowing ⁽⁵⁾

June 21, 2034

Non-current

RMB

311,735

5-year LPR - 0.60%

—

311,735

Credit guaranteed borrowing ⁽⁶⁾

July 26, 2025

Current and Non-current

RMB

300,000

3.70%

—

300,000

Unsecured borrowing ⁽⁷⁾

March 8, 2024

Non-current

RMB

260,000

1-year LPR - 0.70%

—

260,000

Secured borrowing ⁽⁸⁾

March 25, 2025

Current and Non-current

RMB

249,255

4.00%

—

249,255

Unsecured borrowing ⁽⁹⁾

April 19, 2023

Current

RMB

137,180

1-year LPR - 0.20%

—

137,180

Total borrowings

5,997,941

9,492,276

13. Short-term Borrowings and Long-term Borrowings (Continued)

The total borrowings are classified as short-term borrowings and long-term borrowings:


	As of
	December 31, 2021	September 30, 2022
Short-term borrowings:
Unsecured borrowing ⁽⁹⁾	—	137,180
Current portion of Secured bank loan ⁽²⁾	—	110,000
Current portion of Credit guaranteed borrowing ⁽⁶⁾	—	100,000
Current portion of Secured borrowing ⁽⁸⁾	—	99,702
Current portion of Secured bank loan ⁽⁴⁾	37,042	74,083
Current portion of Credit guaranteed borrowing ⁽³⁾	—	7,100
Total short-term borrowings	37,042	528,065


	As of
	December 31, 2021	September 30, 2022
Long-term borrowings:
Convertible debt ⁽¹⁾	5,397,941	6,024,126
Non-current portion of Secured bank loan ⁽²⁾	—	790,000
Non-current portion of Credit guaranteed borrowing ⁽³⁾	—	702,880
Non-current portion of Secured bank loan ⁽⁴⁾	562,958	525,917
Secured borrowing ⁽⁵⁾	—	311,735
Unsecured borrowing ⁽⁷⁾	—	260,000
Non-current portion of Credit guaranteed borrowing ⁽⁶⁾	—	200,000
Non-current portion of Secured borrowing ⁽⁸⁾	—	149,553
Total long-term borrowings	5,960,899	8,964,211
Total borrowings	5,997,941	9,492,276

(1)

In April 2021, the Company issued and sold convertible debt in an aggregate principal of US$862,500 through a private placement. The convertible debt will mature in 2028, bearing the interest at a rate of 0.25% per annum. The related interest is payable semiannually in arrears on May 1 and November 1 of each year, beginning on November 1, 2021. The net proceeds from this offering were approximately US$844,876, equivalent to RMB5,533,238.

The convertible debt may be converted, at an initial conversion rate of 35.2818 American depositary shares (the “ADSs”) per US$1,000 principal amount (which represents an initial conversion price of approximately US$28.34 per ADSs) at each holder’s option at any time on or after November 1, 2027, until the close of business on the second scheduled trading day immediately preceding the maturity date of May 1, 2028. Upon conversion, the Company will pay or deliver to such converting holders, as the case may be, either cash, ADSs, or a combination of cash and ADSs, at its election.

The initial conversion price of US$28.34 per ADSs, or US$14.17 per Class A Ordinary Share (the latter represents the effective cost per Class A Ordinary Share), represents a discount of approximately 26.56% to the maximum Public Offer Price of HK$150.00 per Class A Ordinary Share. The initial conversion rate may be adjusted in certain circumstances, including but not limited to when the Company effects a share split or share combination. As of September 30, 2022, no adjustment had been made to the initial conversion rate.

Holders of the convertible debt have the rights to require the Company to repurchase all or a portion for their convertible debt on May 1, 2024 and May 1, 2026 or in the event of certain fundamental changes, at a repurchase price equal to 100% of the principal amount of the convertible debt to be repurchased, plus accrued and unpaid interest.

13. Short-term Borrowings and Long-term Borrowings (Continued)

The Company accounted for the convertible debt as a single instrument measured at its amortized cost as long-term borrowings on the unaudited condensed consolidated balance sheets. The issuance costs were recorded as an adjustment to the long-term borrowings and are amortized as interest expense using the effective interest method over the contractual life to the maturity date (i.e., May 1, 2028). For the nine months ended September 30, 2021 and 2022, the convertible debt related interest expense was US$2,172 (RMB13,993) and US$3,215 (RMB22,871), respectively. As of December 31, 2021 and September 30, 2022, the principal amount of the convertible debt was RMB5,499,041 and RMB 6,123,578, and the unamortized debt issuance cost was RMB101,100 and RMB99,452, respectively.

(2)

In February, 2022, the Group entered into a 5-year pledged loan agreement with a commercial bank in the PRC, with total principal of RMB900,000. This loan was pledged by certain manufacturing facilities of the Group. As of September 30, 2022, the interest rate was between 3.90% to 4.05% per annum. The outstanding loan principal of RMB110,000 is due within 12 months, which is classified as current portion of long-term borrowing and the remaining portion of principal of RMB790,000 is presented as a long-term borrowing.

The borrowing contain covenants which includes limitations on certain asset sales and a requirement to maintain current assets above RMB5,000. The Group is in compliance with all of the loan covenants as of September 30, 2022.

(3)

In June 2022, the Group entered into loan agreements with a commercial bank pursuant to which the Group is entitled to borrow the group of banks from time to time until June 2024 up to an aggregate of US$200,000. In June 2022, the Group made the drawdown in the amount of US$100,000 (RMB709,980). Interest accrues on the principal amounts of the loans outstanding at an annual rate equal to the SOFR. As of September 30, 2022, the outstanding loan principal of RMB7,100 is due within 12 months, which is classified as current portion of long-term borrowing and the remaining portion of principal of RMB702,880 is presented as a long-term borrowing.

(4)

In September 2021, the Group entered into a loan facility agreement with a commercial bank in the PRC, which allows the Group to draw borrowings up to RMB1,009,900 as of periods ended September 28, 2029. The borrowings bear annual interest rate of 4.8% and were guaranteed by certain production facilities and toolings of the Group. As of September 30, 2022, the outstanding loan principal was RMB600,000, of which RMB74,083 will be due within 12 months, which is classified as current portion of long-term borrowing and the remaining balance of RMB525,917 will be due in October 1, 2023 and thereafter, which is classified as long-term borrowing. The unused credit limits under these facilities was RMB409,900 as of September 30, 2022.

(5)

In June 2022, the Group entered into a credit agreement with a group of banks pursuant to which the Group is entitled to borrow from the group of banks from time to time up to an aggregate of RMB3,000,000 until April 2024. The related principle is payable semiannually in arrears in June and December of each year, from June 2025 to June 2034. The related interest is payable quarterly in arrears on the twentieth of the last month of every quarter, from September 2022 to June 2034. As of September 30 2022, the Group made drawdown in the amount of RMB311,735. The loan is secured by the pledge of certain Groups land use rights and property relating to the production of electric vehicles, when the certificates of land use rights and property are approved and provided by the local authorities. Interest accrues on the principal amounts of the loans outstanding at an annual rate equal to the 5-year Loan Prime Rate (“LPR”) published by the National Interbank Funding Center, minus 0.6%. Borrowings under this credit agreement are classified as long-term borrowing.

13. Short-term Borrowings and Long-term Borrowings (Continued)

(6)

In July 2022, the Group entered into a 3-year loan agreement with a commercial bank in the PRC, with total principal of RMB300,000. The related principal is payable semiannually in arrears in January and July of each year, beginning from January 2023, until July 2025. The related interest is payable quarterly in arrears on the twenty-first of the last month of every quarter, from September 2022 to July 2025. As of September 30, 2022, the interest rate was 3.70% per annum and an outstanding loan principal of RMB100,000 is due within 12 months, which is classified as current portion of long-term borrowing and the remaining portion of principal of RMB200,000 is presented as a long-term borrowing.

(7)

In September 2022, the Group entered into a 18 month loan agreement with a commercial bank in the PRC, with total principal of RMB260,000. As of September 30, 2022, the annual interest rate was 1-year Loan Prime Rate (“LPR”) published by the National Interbank Funding Center, minus 0.7% per annum and all outstanding loan principal of RMB260,000 was presented as a long-term borrowing.

(8)

In February 2022, the Group entered into an asset transfer agreement with a finance lease company to sell certain production facilities and equipment in Changzhou Production Base with a total consideration of RMB299,106. Immediately after the transfer, the Group entered into a lease agreement to lease back the production facilities and equipment for the period starting from March 25, 2022 to March 25, 2025, and further obtained an option to repurchase the production facilities and equipment with the notional amount of RMB0.001 on March 25, 2025.

As the repurchase option is not at the fair value of the assets when the option is exercised, and the assets repurchased are designed for the use of the Group, and no alternative assets that are substantially the same as the transferred assets are readily available in the market, as a result, the transaction did not qualify for the sales accounting, and was accounted for as a financing transaction and the Group recorded the sales proceeds as a borrowing in the unaudited condensed consolidated balance sheets. The Group repaid a portion of the principal in the amount of RMB49,851 for the nine months ended September 30, 2022. As of September 30, 2022, outstanding loan principal of RMB99,702 is due within 12 months, which is classified as current portion of long-term borrowing and the remaining portion of principal of RMB149,553 is presented as a long-term borrowing.

(9)

In December 2021 and April 2022, the Group entered into 1-year loan agreement and supplemental agreement with a commercial bank in the PRC, which the Group is entitled to borrow from time to time until December 2022 up to an aggregate of RMB500,000. As of September 30, 2022, the annual interest rate was 1-year Loan Prime Rate (“LPR”) published by the National Interbank Funding Center, minus 0.2% per annum and all outstanding loan principal of RMB137,180 was presented as a short-term borrowing.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

Trade and Notes Payable

9 Months Ended

Sep. 30, 2022

Trade and Notes Payable

Trade and Notes Payable

14. Trade and Notes Payable

Trade and notes payable consist of the following:


	As of
	December 31, 2021	September 30, 2022
Trade payable for raw materials	7,089,370	9,417,573
Notes payable	2,286,680	6,102,648
Total	9,376,050	15,520,221

An aging analysis of the trade and notes payable as at December 31, 2021 and September 30, 2022, based on the recognition date, is as follows:


	As of
	December 31, 2021	September 30, 2022
Within 3 months	7,539,833	14,790,078
Between 3 months and 6 months	1,639,286	619,430
Between 6 months and 1 year	161,913	49,608
More than 1 year	35,018	61,105
Total	9,376,050	15,520,221

Accruals and Other Current Liabilities

9 Months Ended

Sep. 30, 2022

Accruals and Other Current Liabilities

Accruals and Other Current Liabilities

15. Accruals and Other Current Liabilities

Accruals and other current liabilities consist of the following:


	As of
	December 31, 2021	September 30, 2022
Payables for purchase of property, plant and equipment	456,395	1,643,136
Salaries and benefits payable	417,449	688,164
Accrued costs of purchase commitments relating to inventory	—	519,470
Payables for research and development expenses	94,517	358,286
Tax payable	277,233	326,462
Payables for logistics expenses	143,632	263,051
Payables for marketing and promotional expenses	96,945	182,918
Accrued warranty	154,276	152,648
Deposits from vendors	27,716	25,847
Advances from customers	10,262	24,809
Other payables	200,943	430,605
Total	1,879,368	4,615,396

Revenue Disaggregation

9 Months Ended

Sep. 30, 2022

Revenue Disaggregation

Revenue Disaggregation

16. Revenue Disaggregation

Revenues by source consist of the following:


	For the Nine Months Ended September 30,
	2021	2022
Vehicle sales	15,752,753	26,838,104
Other sales and services	636,574	798,838
Total	16,389,327	27,636,942

Revenue by timing of recognition is analyzed as follows:


	For the Nine Months Ended September 30,
	2021	2022
Revenue recognized at a point in time	16,328,599	27,521,216
Including: Vehicle sales	15,752,753	26,838,104
Other sales and services	575,846	683,112
Revenue recognized over time	60,728	115,726
Total	16,389,327	27,636,942

Revenues arising from vehicle sales are recognized at a point in time when the control of the products are transferred to the users. Revenues from other sales and services which are recognized at a point in time include (i) sales and installment of charging piles, (ii) sales of goods from online store, (iii) certain services under the Li Plus Membership, and (iv) sales of Automotive Regulatory Credits. In such instances, revenue is recognized at a point in time when the control of the products and services are transferred to the users.

Certain revenue arising from other sales and services is recognized over time, including vehicle internet connection services, FOTA upgrades and certain services under the Li Plus Membership.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Deferred Revenue

9 Months Ended

Sep. 30, 2022

Deferred Revenue

Deferred Revenue

17. Deferred Revenue

The following table includes a rollforward of the deferred revenue balance for each period presented:


	For the Nine Months Ended September 30,
	2021	2022
Deferred revenue—at beginning of the period	407,168	694,745
Additions	16,641,641	27,961,660
Recognition	(16,492,788)	(27,549,157)
Deferred revenue—at end of the period	556,021	1,107,248
Including: Deferred revenue, current	244,083	522,613
Deferred revenue, non‑current	311,938	584,635

Deferred revenue represents contract liabilities allocated to the performance obligations that are unsatisfied, or partially satisfied which primarily resulted from undelivered vehicles, uninstalled charging piles and other performance obligations identified in the vehicle sales contracts.

The Group expects that RMB522,613 of the transaction price allocated to unsatisfied performance obligation as of September 30, 2022 will be recognized as revenue during the period from October 1, 2022 to September 30, 2023. The remaining RMB584,635 will be recognized in October 1, 2023 and thereafter.

Research and Development Expenses

9 Months Ended

Sep. 30, 2022

Research and Development Expenses.

Research and Development Expenses

18. Research and Development Expenses

Research and development expenses consist of the following:


	For the Nine Months Ended September 30,
	2021	2022
Employee compensation	1,339,965	2,761,585
Design and development expenses	584,921	1,660,395
Rental and related expenses	34,496	76,408
Depreciation and amortization expenses	38,635	62,371
Travel expenses	33,591	54,304
Others	24,790	94,878
Total	2,056,398	4,709,941

Selling, General and Administrative Expenses

9 Months Ended

Sep. 30, 2022

Selling, General and Administrative Expenses.

Selling, General and Administrative Expenses

19. Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of the following:


	For the Nine Months Ended September 30,
	2021	2022
Employee compensation	892,119	2,056,105
Marketing and promotional expenses	873,227	646,321
Rental and related expenses	214,967	452,943
Depreciation and amortization expenses	50,332	142,862
Travel expenses	42,280	72,156
Expected credit losses	3,566	15,373
Others	290,009	649,682
Total	2,366,500	4,035,442

Ordinary Shares

9 Months Ended

Sep. 30, 2022

Ordinary Shares

Ordinary Shares

20. Ordinary Shares

In April 2017, the Company was incorporated as a limited liability company in the Cayman Islands. In July 2019, the Company became the holding company of the Group pursuant to the Reorganization described in Note 1. In connection with the Reorganization and issuance of Series C convertible redeemable preferred shares (“Series C Preferred Shares”), 3,830,157,186 authorized shares of the Company were designated as Class A Ordinary Shares, and 240,000,000 authorized shares were designated as Class B ordinary shares. Each Class A Ordinary Share is entitled to one vote, and is not convertible into Class B Ordinary Shares under any circumstances. Each Class B Ordinary Share is entitled to ten votes, subject to certain conditions, and is convertible into one Class A Ordinary Share at any time by the holder thereof. Upon the Reorganization, the Company issued ordinary shares and Series Pre-A, A-1, A-2, A-3, B-1, B-2 and B-3 convertible redeemable preferred shares (the “Series Pre-A, A-1, A-2, A-3, B-1, B-2 and B-3 Preferred Shares”) to shareholders of Beijing CHJ in exchange for respective equity interests that they held in Beijing CHJ immediately before the Reorganization. Series Pre-A, A-1, A-2, A-3, B-1, B-2 and B-3 Preferred Shares would be converted into Class A Ordinary Shares based on the then-effective conversion price.

20. Ordinary Shares (Continued)

On July 4, 2016, Beijing CHJ issued Series Pre-A shares (“Series Pre-A Ordinary Shares”) with cash consideration of RMB100,000. Series Pre-A Ordinary Shares were classified as equity as they were not redeemable. In July 2017, upon Series A-2 financing, certain rights were granted to holders of Series Pre-A Ordinary Shares, including contingent redemption rights. Series Pre-A Ordinary Shares were effectively re-designated to Series Pre-A Preferred Shares. Such re-designation was accounted for as a repurchase and cancellation of Series Pre-A Ordinary Shares and a separate issuance of Series Pre-A Preferred Shares. Accordingly, the excess of fair value of the Series Pre-A Preferred Shares over the fair value of the Series Pre-A Ordinary Shares repurchased from employee shareholders was recorded as an employee compensation. While for other non-employee Series Pre-A shareholders, such difference was recognized as a deemed dividend given to these shareholders. The excess of the fair value of all Series Pre-A Ordinary Shares over the carrying value of these shares was accounted for as a retirement of the Series Pre-A Ordinary Shares. The Company elected to charge the excess entirely to accumulated deficits.

In August 2020, the Company completed its US IPO and 190,000,000 Class A Ordinary Shares were issued with proceeds of US$1,042,137, net of underwriter commissions and relevant offering expenses. Concurrently with completion of the IPO, 66,086,955 Class A Ordinary Shares were issued for a consideration of US$380,000. On August 7, 2020, the Company issued an additional 28,500,000 Class A Ordinary Shares upon the exercise of underwriters’ over-allotment option for a consideration of US$157,320.

All of the Preferred Shares (other than those beneficially owned by Mr. Li Xiang, the founder and the CEO of the Company) were automatically converted to 1,045,789,275 Class A Ordinary Shares immediately upon the completion of the IPO. Concurrently, all Preferred Shares beneficially owned by Mr. Li Xiang were automatically converted to 115,812,080 Class B Ordinary Shares.

In December 2020, the Company completed a follow-on offering of 108,100,000 Class A Ordinary Shares, which included 14,100,000 Class A Ordinary Shares issued in connection with the underwriters’ full exercise of their over-allotment option.

In February 2021, the Company issued 34,000,000 Class A Ordinary Shares as treasury shares for future exercise of share options.

In May 2021, the Company issued 108,557,400 Class B Ordinary Shares as treasury shares to Mr. Li Xiang, the Company’s founder and chief executive officer, pursuant to the Company’s 2021 Share Incentive Plan.

In August 2021, the Company completed its HK IPO and 100,000,000 Class A Ordinary Shares were issued with proceeds of HK$11,633,130, net of underwriter commissions and relevant offering expenses. In September 2021, the Company issued an additional 13,869,700 Class A Ordinary Shares upon the exercise of underwriters’ over-allotment option for a consideration of HK$1,634,462.

As of September 30, 2022, 11,673,130 share options that fulfilled the vesting conditions were exercised and 127,062 RUSs that fulfilled the vesting conditions were vested.

On June 28, 2022, the Company filed a prospectus supplement in the United States to sell up to an aggregate of US$ 2,000,000 of ADSs, each representing two Class A Ordinary Shares, through an at-the-market equity offering program (the “ATM Offering”) on the Nasdaq Global Select Market. As of September 30, 2022, 18,862,564 Class A Ordinary Shares were legally issued and the proceeds has been received by the Company.

As of December 31, 2021 and September 30, 2022, the Company had issued and outstanding ordinary shares of 1,929,562,426 and 1,953,820,766, respectively.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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-Subparagraph (b)
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Publisher FASB
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Loss Per Share

9 Months Ended

Sep. 30, 2022

Loss Per Share

Loss Per Share

21. Loss Per Share

Basic loss per share and diluted loss per share have been calculated in accordance with ASC 260 for the nine months ended September 30, 2021 and 2022 as follows:


	For the Nine Months Ended September 30,
	2021	2022
Numerator:
Net loss	(616,966)	(2,297,650)
Less: Net loss attributable to noncontrolling interests	—	(28,497)
Net loss attributable to ordinary shareholders of Li Auto Inc.	(616,966)	(2,269,153)

Denominator:
Weighted average ordinary shares outstanding—basic and diluted	1,829,434,693	1,936,947,462

Basic and diluted net loss per share attributable to ordinary shareholders of Li Auto Inc.	(0.34)	(1.17)

For the nine months ended September 30, 2021 and 2022, the Company had ordinary equivalent shares, including options and RSUs granted and convertible debt issued (shares subject to conversion) in April 2021 (Note 13). As the Group incurred a loss for each of the periods ended September 30, 2021 and 2022, these ordinary equivalent shares were determined to be anti-dilutive and excluded from the calculation of diluted loss per share of the Company. The weighted average numbers of options and RSUs granted and convertible debt (shares subject to conversion) excluded from the calculation of diluted loss per share of the Company were 69,003,813 and 39,682,332 for the nine months ended September 30, 2021 and 83,592,560 and 60,861,105 for the nine months ended September 30, 2022, respectively.

Share-based Compensation

9 Months Ended

Sep. 30, 2022

Share based Compensation

Share based Compensation

22. Share-based Compensation

Compensation expenses recognized for share-based awards granted by the Company were as follows:


	For the Nine Months Ended September 30,
	2021	2022
Research and development expenses	471,728	857,188
Selling, general and administrative expenses	220,244	465,475
Cost of sales	18,528	28,201
Total	710,500	1,350,864

22. Share-based Compensation (Continued)

(i)	2019 and 2020 Share Incentive Plan

In July 2019, the Group adopted the 2019 Share Incentive Plan (the “2019 Plan”), which allows the Company to grant options and RSUs of the Group to its employees, directors and consultants. As of September 30, 2022, the maximum number of Class A ordinary shares that may be issued under the 2019 Plan is 141,083,452.

The Group began to grant share options to employees from 2015. In conjunction with the Company’s Reorganization in July 2019, the Group transferred share options from Beijing CHJ to the Company according to the 2019 Plan. The share options of the Group under the 2019 Plan have a contractual term of ten years from the grant date. The options granted have both service and performance condition. The options are generally scheduled to be vested over five years, one-fifth of the awards shall be vested upon the end of the calendar year in which the awards were granted. Meanwhile, the options granted are only exercisable upon the occurrence of an IPO by the Group.

These awards have a service condition and a performance condition related to an IPO. For share options granted with performance condition, the share-based compensation expenses are recorded when the performance condition is considered probable. As a result, the cumulative share-based compensation expenses for these options that have satisfied the service condition were recorded upon the completion of the US IPO in the third quarter of 2020. The Group recognized the share options of the Company granted to the employees using graded-vesting method over the vesting term of the awards, net of estimated forfeitures.

In July 2020, the Group adopted the 2020 Share Incentive Plan (the “2020 Plan”), which allows the Company to grant options and RSUs of the Group to its employees, directors and consultants. As of September 30, 2022, the maximum number of Class A ordinary shares that may be issued under the 2020 Plan is 165,696,625. The Group began to grant share options from January 1, 2021 and ceased to grant options from July 2, 2021 under the 2020 Plan. The Company commenced to grant RSUs from July 1, 2021 under the 2020 plan.The contractual term is ten years from the grant date and the options and RSUs granted only have service conditions. The options and RSUs are generally scheduled to be vested over five years, one-fifth of the awards shall be vested upon the end of the calendar year in which the awards were granted.

(a)	The following table summarizes Company share option activity under the 2019 Plan and 2020 Plan for the nine months ended September 30, 2021 and 2022:


			Weighted
	Number of	Weighted	Average	Aggregate
	Options	Average	Remaining	Intrinsic
	and Shares	Exercise Price	Contractual Life	Value
		US$	In Years	US$
Outstanding as of December 31, 2020	56,914,000	0.10	5.95	814,724
Granted	36,987,700	0.10
Exercised	(1,519,362)	0.10
Forfeited	(3,408,000)	0.10
Outstanding as of September 30,2021	88,974,338	0.10	9.83	1,160,670
Outstanding as of December 31, 2021	83,391,284	0.10	7.66	1,330,091
Granted	—	0.10
Exercised	(5,268,714)	0.10
Forfeited	(3,372,800)	0.10
Outstanding as of September 30, 2022	74,749,770	0.10	5.81	852,521

Vested and expected to vest as of September 30, 2021	85,493,499	0.10	9.70	1,115,263
Exercisable as of September 30, 2021	45,896,638	0.10	7.54	598,722
Vested and expected to vest as of September 30, 2022	71,206,919	0.10	5.69	812,115
Exercisable as of September 30, 2022	46,825,570	0.10	4.34	534,046

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the estimated fair value of the underlying stock at each reporting date.

22. Share-based Compensation (Continued)

The weighted - average grant date fair value for options granted under the Company’s 2019 Plan and 2020 Plan for the nine months ended September 30, 2021 was US$15.78, computed using the binomial option pricing model. No share options were granted for the nine months ended September 30, 2022.

The Company did not grant options under 2019 plan and 2020 plan since July 2, 2021. The fair value of each option granted under the Company’s 2019 Plan and 2020 Plan for the nine months ended September 30, 2021 was estimated on the date of each grant using the binomial option pricing model with the assumptions (or ranges thereof) in the following table:


		For the Nine Months Ended September 30,
		2021
Exercise price (US$)		0.10
Fair value of the ordinary shares on the date of option grant (US$)		14.42-17.35
Risk‑free interest rate		0.93%-1.48%
Expected term (in years)		10.00
Expected dividend yield		0%
Expected volatility		47%-48%

The risk- free interest rate is estimated based on the yield curve of US Sovereign Bond as of the option valuation date. The expected volatility at the grant date and each option valuation date is estimated based on annualized standard deviation of daily stock price return of comparable companies with a time horizon close to the expected expiry of the term of the options. The Group has never declared or paid any cash dividends on its capital stock, and the Group does not anticipate any dividend payments in the foreseeable future. Expected term is the contract life of the options.

As of September 30, 2022, there was US$96,799 of unrecognized compensation expense related to the share options granted to the Group’s employees, which are expected to be recognized over a weighted-average period of 3.54 years and may be adjusted for future changes in forfeitures.

(b)	The following table summarizes Company’s RSU activity under the 2019 plan and 2020 Plan for the nine months ended September 30, 2021 and 2022:


		Weighted Average
	Number of	Grant Date
	Shares	Fair Value
		US$
Unvested as of December 31, 2020	—	—
Granted	8,586	17.25
Forfeited	—	—
Unvested as of September 30, 2021	8,586	17.25
Unvested as of December 31, 2021	8,586	17.25
Granted	36,199,400	17.13
Vested	(127,062)	18.76
Forfeited	(4,522,600)	16.62
Unvested as of September 30, 2022	31,558,324	17.20

As of September 30, 2022, there was US$246,971 in unrecognized compensation expense related to RSUs granted to the Group’s employees, which are expected to be recognized over a weighted-average period of 4.45 years and may be adjusted for future changes in forfeitures.

22. Share-based Compensation (Continued)

(ii)	2021 Share Incentive Plan

In March 2021, the Group adopted the 2021 Share Incentive Plan (the “2021 Plan”), which granted options to purchase 108,557,400 Class B ordinary shares to Mr. Li Xiang, the Company’s founder and chief executive officer. The exercise price of the options is US$14.63 per share, or US$29.26 per ADS. The date of expiration for this grant is March 8, 2031. The granted options are subject to performance-based vesting conditions. The granted options are divided into six equal tranches, or 18,092,900 each. The first tranche will become vested when the aggregate number of the Group’s vehicle deliveries in any 12 consecutive months exceeds 500,000. The second to sixth tranches will become vested when the aggregate number of vehicle deliveries in any 12 consecutive months exceeds 1,000,000, 1,500,000, 2,000,000, 2,500,000 and 3,000,000, respectively.

On May 5, 2021, the board of directors of the Company approved to replace the options to purchase 108,557,400 Class B ordinary shares of the Company under the Company’s 2021 Share Incentive Plan previously granted to Mr. Li Xiang on March 8, 2021 with the same amount of restricted Class B ordinary shares (the ”Award Shares”) under the same plan, all of which will become legally vested upon grant on May 5, 2021. However, Mr. Li Xiang has also agreed, undertaken, and covenanted not to transfer or dispose of, directly or indirectly, any interest in the Class B ordinary shares acquired upon vesting of the Award Shares, which are still subject to certain restrictions, terms and performance conditions substantially similar to the vesting conditions of the options being replaced. In addition to the performance conditions, Mr. Li Xiang is required to pay US$14.63 per share, which is equal to the exercise price of the options being replaced, to have the relevant tranche of the Award Shares released from the restrictions. Mr. Li Xiang also has agreed, undertaken, and covenanted not to cast any vote or claim any dividend paid on any Award Shares before such number of Award Shares are released from the restrictions. Any Award Shares that are not released from the restrictions by March 8, 2031 are subject to compulsory repurchase by the Company at their par value.

In July 2021, all such 108,557,400 Award Shares were converted from Class B Ordinary Shares (10 votes per share) to Class A Ordinary Shares (1 vote per share) on one-to-one basis with effect immediately upon the Company’s listing on the Main Board of HKEx in August 2021. The modification is solely subjected to satisfy HKEx’s requirement from legal perspective. Pursuant to the grant of the Award shares, Mr. Li Xiang has undertaken and covenanted that unless and until, in respect of any tranche of Award Shares, (a) the relevant performance condition has been met and (b) the relevant exercise price (US$14.63) has been paid, Mr. Li Xiang will not offer, pledge, sell any relating award shares and claim dividend or voting rights in respect of the Award Shares.

As of September 30, 2022, the Group did not recognize any compensation expense for shares granted to Mr. Li Xiang, because the Group considers it is not probable, as of September 30, 2022, that the performance-based vesting conditions will be satisfied. Therefore, there were US$538,445 of unrecognized compensation expenses related to the restricted shares granted under 2021 Plan as of September 30, 2022.

The following table summarizes Company performance-based restricted share activity under the 2021 Plan for the nine months ended September 30, 2021 and 2022:


	Number of	Weighted	Weighted Average
	Shares	Average Exercise	Remaining	Aggregate
	Granted	Price	Contractual Life	Intrinsic Value
		US$	In Years	US$
December 31, 2020	—	—	—	—
Granted	108,557,400	14.63
September 30, 2021	108,557,400	14.63	9.44	—

December 31, 2021	108,557,400	14.63	9.19	—
Granted	—	—
September 30, 2022	108,557,400	14.63	8.44	—

22. Share-based Compensation (Continued)

The weighted-average grant date fair value for restricted shares granted under the Company’s 2021 Plan for the nine months ended September 30, 2021 and 2022 were both US$4.96, computed using the binomial pricing model.

The fair value of the restricted shares granted under the Company’s 2021 Plan was estimated on the date of grant using the binomial pricing model with the assumptions (or ranges thereof) in the following table (no new grants during the comparative September 30, 2022 period):


		For the Nine Months Ended
		September 30, 2021
Exercise price (US$)		14.63
Fair value of the ordinary shares on the date of restricted shares grant (US$)		10.67
Risk-free interest rate		1.59%
Expected term (in years)		10.00
Expected dividend yield		0%
Expected volatility		47%

Risk-free interest rate is estimated based on the yield curve of US Sovereign Bond as of the valuation date. The expected volatility at the grant date and each valuation date is estimated based on annualized standard deviation of daily stock price return of comparable companies with a time horizon close to the expected expiry of the term of the restricted shares. The Group has never declared or paid any cash dividends on its capital stock, and the Group does not anticipate any dividend payments in the foreseeable future. Expected term is the contract life of the restricted shares.

Taxation

9 Months Ended

Sep. 30, 2022

Taxation

Taxation

23. Taxation

(a)Value added tax

The Group is subject to statutory VAT rate of 13% for revenue from sales of vehicles and spare parts in the PRC.

Wheels Technology is subject to 13% VAT for software research and development and relevant services. Wheels Technology is entitled to a VAT refund in excess of 3% output VAT on the total VAT payable from April 2021, after completing the registration with relevant authorities and obtaining a refund approval from local tax bureau. For the nine months ended September 30, 2021 and 2022, nil and RMB 207,924 of VAT refunds were received and were recorded as Others, net.

(b)Income taxes

Cayman Islands

The Company is incorporated in the Cayman Islands and conducts most of its business through its subsidiaries located in Mainland China and Hong Kong. Under the current laws of the Cayman Islands, the Company is not subject to tax on either income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.

PRC

Beijing CHJ and Wheels Technology are qualified as a “high and new technology enterprise” under the EIT Law and are eligible for a preferential enterprise income tax rate of 15%, respectively. The high and new technology enterprise certificate is effective for a period of three years. Other Chinese companies are subject to enterprise income tax (“EIT”) at a uniform rate of 25% as of September 30, 2022.

23. Taxation (Continued)

Wheels Technology, which is our wholly-owned entity primarily engaged in the operations of technology, software research and development and relevant services, was awarded as a Software Enterprise and was thereby entitled to an income tax exemption for two years beginning from its first profitable calendar year since 2021, and a 50% reduction in the standard statutory rate for the subsequent three consecutive years.

Under the EIT Law enacted by the National People’s Congress of PRC on March 16, 2007 and its implementation rules which became effective on January 1, 2008, dividends generated after January 1, 2008 and payable by a foreign investment enterprise in the PRC to its foreign investors who are non-resident enterprises are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a different withholding arrangement. Under the taxation arrangement between the PRC and Hong Kong, a qualified Hong Kong tax resident which is the “beneficial owner” and directly holds 25% or more of the equity interest in a PRC resident enterprise is entitled to a reduced withholding tax rate of 5%. The Cayman Islands, where the Company was incorporated, does not have a tax treaty with PRC.

The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The Implementing Rules of the EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” Based on a review of surrounding facts and circumstances, the Group does not believe that it is likely that its operations outside of the PRC will be considered a resident enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the EIT Law, there is uncertainty as to the application of the EIT Law. Should the Company be treated as a resident enterprise for PRC tax purposes, the Company will be subject to PRC income tax on worldwide income at a uniform tax rate of 25%.

According to relevant laws and regulations promulgated by the State Administration of Tax of the PRC, enterprises engaging in research and development activities were entitled to claim 150% of their research and development expenses incurred as tax deductible expenses when determining their assessable profits for that year (the “R&D Deduction”). The State Taxation Administration of the PRC announced in September 2018 that enterprises engaging in research and development activities would be entitled to claim 175% of their research and development expenses as R&D Deduction from January 1, 2018 to December 31, 2023.

Withholding tax on undistributed dividends

According to the current EIT Law and its implementation rules, foreign enterprises, which have no establishment or place in China but derive dividends, interest, rents, royalties and other income (including capital gains) from sources in China or which have an establishment or place in China but the aforementioned incomes are not connected with the establishment or place shall be subject to the PRC withholding tax (“WHT”) at 10% (a further reduced WHT rate may be available according to the applicable double tax treaty or arrangement provided that the foreign enterprise is the tax resident of the jurisdiction where it is located and it is the beneficial owner of the dividends, interest and royalties income).

Hong Kong

Under the current Hong Kong Inland Revenue Ordinance, the subsidiaries of the Group incorporated in Hong Kong are subject to 16.5% Hong Kong profit tax on their taxable income generated from operations in Hong Kong. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax.

Composition of income tax expense and income tax benefit for the periods presented is as follows:


	For the Nine Months Ended September 30,
	2021	2022
Current income tax expense	—	30,885
Deferred income tax expense/(benefit)	181,384	(61,056)
Total	181,384	(30,171)

23. Taxation (Continued)

A reconciliation of the income tax expense computed by applying the PRC statutory income tax rate of 25% to the Group’s income tax expense for each of the periods presented is as follows:


	For the Nine Months Ended September 30,
	2021	2022
Loss before income tax expense	(435,582)	(2,327,821)
Income tax credit computed at PRC statutory income tax rate of 25%	(108,896)	(581,955)
Tax effects of tax‑exempt entity and preferential tax rate	(58,380)	(320,294)
Tax effect of R&D deduction and others	(92,702)	(193,946)
Inventory write-downs and losses on inventory purchase commitments	12,814	200,700
Non‑deductible expenses	58,775	397,904
Change in valuation allowance	369,773	467,420
Income tax expense/(benefit)	181,384	(30,171)

(c)	Consumption tax

Chongqing Lixiang Automobile Co Ltd (“Chongqing Lixiang Automobile”), as a subsidiary of the Company, is eligible for consumption tax rate of 3% and related surcharge. The consumption tax is calculated based on the sales price of its self-manufactured vehicles at 3% consumption tax rate from August 2021.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Fair Value Measurement

9 Months Ended

Sep. 30, 2022

Fair Value Measurement

Fair Value Measurement

24. Fair Value Measurement

Assets and liabilities measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis include: short-term investments and investment in equity securities with readily determinable fair values.

The following table presents the major financial instruments measured at fair value, by level within the fair value hierarchy as of December 31, 2021 and September 30, 2022.


		Fair Value Measurement at Reporting Date Using
		Quoted Prices
	Fair Value as of	in Active Markets for	Significant Other	Significant
	December 31,	Identical Assets	Observable Inputs	Unobservable Inputs
	2021	(Level 1)	(Level 2)	(Level 3)
Assets
Short-term investments	19,157,428	—	19,157,428	—
Equity securities with readily determinable fair value	28,452	28,452	—	—
Total assets	19,185,880	28,452	19,157,428	—


		Fair Value Measurement at Reporting Date Using
		Quoted Prices
	Fair Value as of	in Active Markets for	Significant Other	Significant
	September 30,	Identical Assets	Observable Inputs	Unobservable Inputs
	2022	(Level 1)	(Level 2)	(Level 3)
Assets
Short-term investments	14,487,344	—	14,487,344	—
Long-term financial instruments	50,085	—	50,085	—
Equity securities with readily determinable fair value	23,207	23,207	—	—
Total assets	14,560,636	23,207	14,537,429	—

24. Fair Value Measurement (Continued)

Valuation Techniques

Short-term investments: Short-term investments are investments in financial instruments with variable interest rates and maturity dates within one year. Long-term financial instruments: Long-term financial instruments are investments in financial instruments with variable interest rates and maturity dates greater than one year. Fair value is estimated based on quoted prices of similar financial products provided by the banks at the end of each period (Level 2). The related gain/(loss) amounts are recognized in “interest income and investment income, net” in the unaudited condensed consolidated statements of comprehensive income/(loss).

Equity securities with readily determinable fair value: Equity securities with readily determinable fair values are marketable equity securities which are publicly traded stocks measured at fair value. These securities are valued using the market approach based on the quoted prices in active markets at the reporting date. The Group classifies the valuation techniques that use these inputs as Level 1 of fair value measurements. The related gain/(loss) amounts are recognized in “interest income and investment income, net” in the unaudited condensed consolidated statements of comprehensive income/(loss).

Assets measured at fair value on a nonrecurring basis

Assets measured at fair value on a non- recurring basis include: investments in equity securities without readily determinable fair value and equity method investments. For investments in equity securities without readily determinable fair value, no measurement event occurred during the periods presented. The equity securities without readily determinable fair value were RMB93,150 and RMB508,730 as of December 31, 2021 and September 30, 2022. Nil and RMB7,200 impairment charges were recognized for the nine months ended September 30, 2021 and 2022. For equity method investments, no impairment loss was recognized for all periods presented. The Group recorded RMB27,388 and nil impairment loss of property, plant and equipment and nil and RMB283,329 inventory write-downs for the nine months ended September 30, 2021 and 2022, respectively.

Assets and liabilities not measured at fair value but fair value disclosure is required

Financial assets and liabilities not measured at fair value include cash equivalents, time deposits, restricted cash, trade receivable, amounts due from related parties, prepayments and other current assets, short-term borrowings, trade and notes payable, amounts due to related parties, accruals and other current liabilities, other non-current assets, other non-current liabilities, and long-term borrowings.

The Group values its time deposits held in certain bank accounts using quoted prices for securities with similar characteristics and other observable inputs, and accordingly, the Group classifies the valuation techniques that use these inputs as Level 2. The Group classifies the valuation techniques that use the inputs as Level 2 for short-term borrowing as the rates of interest under the loan agreements with the lending banks were determined based on the prevailing interest rates in the market.

Trade receivable, amounts due from related parties, prepayments and other current assets, trade and notes payable, amounts due to related parties and accruals and other current liabilities are measured at amortized cost, their fair values approximate their carrying values given their short maturities.

Borrowings and convertible debt are measured at amortized cost. Their fair values were estimated by discounting the scheduled cash flows through to estimated maturity using estimated discount rates based on current offering rates of comparable institutions with similar services. The fair value of these borrowings obligations approximate their carrying value as the borrowing rates are similar to the market rates that are currently available to the Group for financing obligations with similar terms and credit risks and represent a level 2 measurement.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies.

Commitments and Contingencies

25. Commitments and Contingencies

(a)Capital commitments

The Group’s capital commitments primarily relate to commitments on construction and purchase of production facilities, equipment and tooling. Total capital commitments contracted but not yet reflected in the unaudited condensed consolidated financial statements as of September 30, 2022 were as follows:


	Total	Less than One Year	1‑3 Years	3‑5 Years	Over 5 Years
Capital commitments	5,367,125	4,926,406	440,719	—	—

(b)Purchase obligations

The Group’s purchase obligations primarily relate to commitments on purchase of raw materials. Total purchase obligations contracted but not yet reflected in the unaudited condensed consolidated financial statements as of September 30, 2022 were as follows:


	Total	Less than One Year	1‑3 Years	3‑5 Years	Over 5 Years
Purchase obligations	13,890,466	13,890,466	—	—	—

(c)Legal proceedings

The Group records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Group reviews the need for any such liability on a regular basis.

Chongqing Zhizao was subject to ongoing legal proceedings arising from disputes of contracts entered into prior to the Group’s acquisition of Chongqing Zhizao in December 2018. Most of these legal proceedings were still at preliminary stages, and the Group was unable to predict the outcome of these cases, or reasonably estimate a range of the possible loss, if any, given the current status of the proceedings. Other than the unpaid contract amount that the Group assumed from Lifan Acquisition and included as the Retained Assets and Liabilities, the Group did not record any accrual for expected loss payments with respect to these cases as of December 26, 2019. The unpaid contract amounts were immaterial as of December 31, 2021 and September 30, 2022. In addition to the indemnification of the Retained Assets and Liabilities the Group obtained from Lifan Passenger Vehicle, Lifan Industry also agreed in the Lifan Acquisition Agreement that, it will indemnify any damages and loss arising from disputes of contracts entered into by Chongqing Zhizao prior to the Group’s acquisition of Chongqing Zhizao, including but not limited to above legal proceedings.

On December 26, 2019, the Group disposed 100% equity interest of Chongqing Zhizao, and the ongoing legal proceedings of Chongqing Zhizao were transferred out to Lifan Industry and Lifan Passenger Vehicle.

Other than the above legal proceedings, the Group does not have any material litigation, and has not recorded any material liabilities in this regard as of December 31, 2021 and September 30, 2022.

Related Party Balances and Transactions

9 Months Ended

Sep. 30, 2022

Related Party Balances and Transactions

26. Related Party Balances and Transactions

The principal related parties with which the Group had transactions during the periods presented are as follows:


Name of Entity or Individual		Relationship with the Company
Beijing Yihang Intelligent Technology Co., Ltd. (“Beijing Yihang”)		Affiliate
Neolix Technologies Co., Ltd. (“Neolix Technologies”)		Affiliate
Airx (Beijing) Technology Co., Ltd. (“Airx”)		Affiliate
Beijing Judianchuxing Technology Limited (“Beijing Judianchuxing”)		Affiliate
Beijing Sankuai Online Technology Co., Ltd. (“Beijing Sankuai ”)		Controlled by Principal Shareholder
Suzhou Yihang Intelligent Technology Co., Ltd. (“Suzhou Yihang”)		Affiliate
Changzhou Huixiang New Energy Auto Parts Co., Ltd. (“Changzhou Huixiang”)		Affiliate
Hanhai Information Technology (Shanghai) Co., Ltd. (“Hanhai”)		Controlled by Principal Shareholder

26. Related Party Balances and Transactions (Continued)

The Group entered into the following related party transactions:


	For the Nine Months Ended September 30,
	2021	2022
Purchased services from Beijing Sankuai	370	4,643
Purchase materials from Changzhou Huixiang	—	702
Purchased services from Hanhai	—	572
Purchased R&D services from Beijing Yihang	11,274	281
Purchased materials from Beijing Yihang	31,564	73
Purchased R&D service from Suzhou Yihang	872	—

The Group had the following related party balances:


	As of
	December 31, 2021	September 30, 2022
Due from Neolix Technologies	678	678
Due from Hanhai	—	373
Due from Beijing Yihang	334	—
Total	1,012	1,051


	As of
	December 31, 2021	September 30, 2022
Due to Beijing Yihang	7,102	5,921
Due to Changzhou Huixiang	30,000	702
Due to Beijing Sankuai	330	661
Due to Airx	23	23
Total	37,455	7,307

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies

Basis of presentation

(a)Basis of presentation

Use of estimates

(c)Use of estimates

Functional currency and foreign currency translation

(d)Functional currency and foreign currency translation

Convenience translation

(e)Convenience translation

Cash, cash equivalents and restricted cash

(f)Cash, cash equivalents and restricted cash


	As of
	December 31,	September 30,
	2021	2022
Cash and cash equivalents	27,854,224	37,472,617
Restricted cash	2,638,840	3,097,127
Total cash, cash equivalents and restricted cash	30,493,064	40,569,744

Time deposits and short-term investments

(g)Time deposits and short-term investments

Trade receivables and current expected credit losses

(h)Trade receivables and current expected credit losses


	For the Nine Months Ended
	September 30, 2021	September 30, 2022
Balance as of the beginning of the period	1,955	6,416
Provisions	4,038	20,954
Reversal	(472)	(5,581)
Balance as of the end of the period	5,521	21,789

Derivative instruments

(i)Derivative instruments

Inventories

(j)Inventories

Property, plant and equipment, net

(k)Property, plant and equipment, net

The estimated useful lives are as follows:

		Useful Lives
Buildings		20 years
Buildings improvements		5 to 10 years
Production machineries and facilities		3 to 10 years
Equipment		3 to 5 years
Motor vehicles		2 to 4 years
Mold and tooling		Unit-of-production
Leasehold improvements		Shorter of the estimated useful life or lease term

Product warranties

(l)Product warranties

The accrued warranty activity consists of the following:


	For the Nine Months Ended
	September 30, 2021	September 30, 2022
Accrued warranty at beginning of the period	233,366	842,345
Warranty cost incurred	(15,069)	(35,128)
Provision for warranty	385,730	482,742
Accrued warranty at end of the period	604,027	1,289,959
Including: Accrued warranty, current	111,645	152,648
Accrued warranty, non-current	492,382	1,137,311

Convertible debt

The Group assessed the convertible debt under ASC 815 and ASU 2020-06 and concluded that:

(ii)The repurchase option is considered clearly and closely related to its debt host and does not meet the requirement for bifurcation.

(iii)The Group presented the issuance costs of debt as a direct deduction from the related debt during the periods presented and subsequently amortized as interest expense over the contractual life.

(iv)The related accretion is recorded as interest expense in the unaudited condensed consolidated statement of comprehensive loss over the estimated term using the effective interest method.

Revenue recognition

Vehicle sales

Sales of Li Plus Membership

Customer loyalty points

Sales of Automotive Regulatory Credits

Practical expedients and exemptions

Government grants

Fair value

(p)Fair value

Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2—Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities.

Level 3—Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Loss per share

(q)Loss per share

Segment reporting

(r)Segment reporting

Organization and Nature of Operations (Tables)

9 Months Ended

Sep. 30, 2022

Variable Interest Entity [Line Items]

Schedule of Company's principal subsidiaries, consolidated VIEs and VIEs' subsidiaries

As of September 30, 2022, the Company’s principal subsidiaries, the consolidated VIEs and the VIEs’ subsidiaries are as follows:


	Equity Interest Held	Date of Incorporation or Date of Acquisition	Place of Incorporation	Principal Activities	Notes
Subsidiaries
Leading Ideal HK Limited (“Leading Ideal HK”)	100%	May 15, 2017	Hong Kong, China	Investment holding
Beijing Co Wheels Technology Co., Ltd. (“Wheels Technology”)	100%	December 19, 2017	Beijing, PRC	Technology development and corporate management
Beijing Leading Automobile Sales Co., Ltd.(“Beijing Leading”)	100%	August 6, 2019	Beijing, PRC	Sales and after sales management
Jiangsu Xindian Interactive Sales and Services Co., Ltd. (“Jiangsu XD”)	100%	May 08, 2017	Changzhou, PRC	Sales and after sales management	(i)
Chongqing Lixiang Automobile Co., Ltd. (“Chongqing Lixiang Automobile”)	100%	October 11, 2019	Chongqing, PRC	Manufacturing of automobile and purchase of manufacturing equipment	(ii)
		Date of Incorporation	Place of Incorporation	Principal Activities	Notes
The VIEs
Beijing CHJ Information Technology Co., Ltd. (“Beijing CHJ”)		April 10, 2015	Beijing, PRC	Technology development
Beijing Xindian Transport Information Technology Co., Ltd. (“Xindian Information”)		March 27, 2017	Beijing, PRC	Technology development

Notes:

(i)	Jiangsu XD was Beijing CHJ’s subsidiary before the 2021 Reorganization.

(ii)

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies

Schedule of cash, cash equivalents and restricted cash


	As of
	December 31,	September 30,
	2021	2022
Cash and cash equivalents	27,854,224	37,472,617
Restricted cash	2,638,840	3,097,127
Total cash, cash equivalents and restricted cash	30,493,064	40,569,744

Schedule of estimated useful lives of property, plant and equipment

		Useful Lives
Buildings		20 years
Buildings improvements		5 to 10 years
Production machineries and facilities		3 to 10 years
Equipment		3 to 5 years
Motor vehicles		2 to 4 years
Mold and tooling		Unit-of-production
Leasehold improvements		Shorter of the estimated useful life or lease term

Schedule of accrued warranty activity


	For the Nine Months Ended
	September 30, 2021	September 30, 2022
Accrued warranty at beginning of the period	233,366	842,345
Warranty cost incurred	(15,069)	(35,128)
Provision for warranty	385,730	482,742
Accrued warranty at end of the period	604,027	1,289,959
Including: Accrued warranty, current	111,645	152,648
Accrued warranty, non-current	492,382	1,137,311

Schedule of accounts notes loans and financing receivable


	For the Nine Months Ended
	September 30, 2021	September 30, 2022
Balance as of the beginning of the period	1,955	6,416
Provisions	4,038	20,954
Reversal	(472)	(5,581)
Balance as of the end of the period	5,521	21,789

Trade receivable (Tables)

9 Months Ended

Sep. 30, 2022

Trade receivable

Schedule of aging analysis of trade receivable


	As of
	December 31, 2021	September 30, 2022
Within 3 months	16,462	17,488
Between 3 months and 6 months	890	1,961
Between 6 months and 1 year	—	—
More than 1 year	103,189	13,133
Total	120,541	32,582

Inventories (Tables)

9 Months Ended

Sep. 30, 2022

Inventories

Summary of inventories


	As of
	December 31, 2021	September 30, 2022
Raw materials, work in process and supplies	1,468,801	3,004,293
Finished products	149,089	2,511,488
Total	1,617,890	5,515,781

Prepayments and Other Current Assets (Tables)

9 Months Ended

Sep. 30, 2022

Prepayments and Other Current Assets

Summary of prepayments and other current assets

7. Prepayments and Other Current Assets

Prepayments and other current assets consist of the following:


	As of
	December 31, 2021	September 30, 2022
Deductible VAT input	118,177	630,369
Prepaid rental and deposits	48,929	276,577
Prepayments to vendors	218,660	240,345
Receivables related to rebate	28,491	—
Others	68,615	326,561
Less:Allowance for Credit Losses	(2,192)	(14,172)
Total	480,680	1,459,680

Property, Plant and Equipment, Net (Tables)

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment, Net.

Summary of property, plant and equipment and related accumulated depreciation


	As of
	December 31, 2021	September 30, 2022
Construction in process ⁽ⁱ⁾	1,942,953	3,834,714
Mold and tooling	1,098,392	2,202,863
Production machineries and facilities⁽ⁱⁱ⁾	804,281	2,192,717
Leasehold improvements	660,902	929,625
Buildings	409,123	877,066
Equipment	266,745	514,047
Motor vehicles	59,702	369,586
Buildings improvements	297,163	317,229
Total	5,539,261	11,237,847
Less: Accumulated depreciation⁽ⁱⁱⁱ⁾	(983,222)	(1,838,044)
Less: Accumulated impairment loss ^(iv)	(57,770)	(38,299)
Total property, plant and equipment, net	4,498,269	9,361,504

Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2022

Intangible Assets, Net

Summary of intangible assets and related accumulated amortization


	As of
	December 31, 2021	September 30, 2022
Automotive Manufacturing Permission	647,174	647,174
Insurance Agent License	—	35,000
Indefinite-lived intangible assets	647,174	682,174
Software	137,576	196,705
Patents	694	694
Definite‑lived intangible assets	138,270	197,399
Less: Accumulated amortization
Software	(33,290)	(46,849)
Patents	(694)	(694)
Accumulated amortization	(33,984)	(47,543)
Definite‑lived intangible assets, net	104,286	149,856
Total intangible assets, net	751,460	832,030

Summary of amortization expenses related to intangible assets for future periods


		As of September 30,
		2022
Year ending September 30, 2023		22,341
Year ending September 30, 2024		19,501
Year ending September 30, 2025		16,798
Year ending September 30, 2026		15,925
Thereafter		75,291
Total		149,856

Other Non-current Assets (Tables)

9 Months Ended

Sep. 30, 2022

Other Non-current Assets

Schedule of other non-current assets

Other non-current assets consist of the following:


	As of
	December 31, 2021	September 30, 2022
Long-term deposits	653,030	1,025,566
Prepayments for purchase of property, plant and equipment ⁽ⁱ⁾	1,051,415	676,438
Deductible VAT input, non-current	263,390	412,696
Others	16,998	89,318
Less: Allowance for credit losses	(3,757)	(7,468)
Total	1,981,076	2,196,550

(i)

Long term Investments (Tables)

9 Months Ended

Sep. 30, 2022

Long-term Investments.

Schedule of long-term investments


	As of
	December 31, 2021	September 30, 2022
Equity investments:
Equity Method	34,704	184,447
Equity Security With Readily Determinable Fair Values	28,452	23,207
Equity Securities Without Readily Determinable Fair Values	93,150	508,730
Long-term held-to-maturity investments:
Long-term time deposits	—	714,518
Long-term financial instruments	—	50,085
Total Long-term Investments	156,306	1,480,987

Schedule of carrying amount and fair value of equity securities with readily determinable fair values


			Foreign Currency
Cango Inc.	Cost Basis	Unrealized Loss	Translation	Fair Value
As of December 31, 2021	100,303	(73,535)	1,684	28,452
As of September 30, 2022	100,303	(81,237)	4,141	23,207

Short-term Borrowings and Long-term Borrowings (Tables)

9 Months Ended

Sep. 30, 2022

Short-term Borrowings and Long-term Borrowings

Schedule of secured bank loan


	As of
	December 31, 2021	September 30, 2022
Short-term borrowings:
Unsecured borrowing ⁽⁹⁾	—	137,180
Current portion of Secured bank loan ⁽²⁾	—	110,000
Current portion of Credit guaranteed borrowing ⁽⁶⁾	—	100,000
Current portion of Secured borrowing ⁽⁸⁾	—	99,702
Current portion of Secured bank loan ⁽⁴⁾	37,042	74,083
Current portion of Credit guaranteed borrowing ⁽³⁾	—	7,100
Total short-term borrowings	37,042	528,065

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 210
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-Paragraph 1
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Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e24072-122690

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 835
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-Section 45
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-URI http://asc.fasb.org/extlink&oid=124435984&loc=d3e28541-108399

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 5: http://www.xbrl.org/2003/role/exampleRef
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 7: http://www.xbrl.org/2003/role/exampleRef
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

Trade and Notes Payable (Tables)

9 Months Ended

Sep. 30, 2022

Trade and Notes Payable

Schedule of trade and notes payable


	As of
	December 31, 2021	September 30, 2022
Trade payable for raw materials	7,089,370	9,417,573
Notes payable	2,286,680	6,102,648
Total	9,376,050	15,520,221

Schedule of aging analysis of trade and notes payable


	As of
	December 31, 2021	September 30, 2022
Within 3 months	7,539,833	14,790,078
Between 3 months and 6 months	1,639,286	619,430
Between 6 months and 1 year	161,913	49,608
More than 1 year	35,018	61,105
Total	9,376,050	15,520,221

Accruals and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2022

Accruals and Other Current Liabilities

Schedule of accruals and other current liabilities


	As of
	December 31, 2021	September 30, 2022
Payables for purchase of property, plant and equipment	456,395	1,643,136
Salaries and benefits payable	417,449	688,164
Accrued costs of purchase commitments relating to inventory	—	519,470
Payables for research and development expenses	94,517	358,286
Tax payable	277,233	326,462
Payables for logistics expenses	143,632	263,051
Payables for marketing and promotional expenses	96,945	182,918
Accrued warranty	154,276	152,648
Deposits from vendors	27,716	25,847
Advances from customers	10,262	24,809
Other payables	200,943	430,605
Total	1,879,368	4,615,396

Revenue Disaggregation (Tables)

9 Months Ended

Sep. 30, 2022

Revenue Disaggregation

Schedule of revenues by source


	For the Nine Months Ended September 30,
	2021	2022
Vehicle sales	15,752,753	26,838,104
Other sales and services	636,574	798,838
Total	16,389,327	27,636,942

Schedule of revenue by timing of recognition


	For the Nine Months Ended September 30,
	2021	2022
Revenue recognized at a point in time	16,328,599	27,521,216
Including: Vehicle sales	15,752,753	26,838,104
Other sales and services	575,846	683,112
Revenue recognized over time	60,728	115,726
Total	16,389,327	27,636,942

Deferred Revenue (Tables)

9 Months Ended

Sep. 30, 2022

Deferred Revenue

Schedule of deferred revenue balance


	For the Nine Months Ended September 30,
	2021	2022
Deferred revenue—at beginning of the period	407,168	694,745
Additions	16,641,641	27,961,660
Recognition	(16,492,788)	(27,549,157)
Deferred revenue—at end of the period	556,021	1,107,248
Including: Deferred revenue, current	244,083	522,613
Deferred revenue, non‑current	311,938	584,635

Research and Development Expenses (Tables)

9 Months Ended

Sep. 30, 2022

Research and Development Expenses.

Schedule of research and development expenses


	For the Nine Months Ended September 30,
	2021	2022
Employee compensation	1,339,965	2,761,585
Design and development expenses	584,921	1,660,395
Rental and related expenses	34,496	76,408
Depreciation and amortization expenses	38,635	62,371
Travel expenses	33,591	54,304
Others	24,790	94,878
Total	2,056,398	4,709,941

Selling, General and Administrative Expenses (Tables)

9 Months Ended

Sep. 30, 2022

Selling, General and Administrative Expenses.

Schedule of selling, general and administrative expenses


	For the Nine Months Ended September 30,
	2021	2022
Employee compensation	892,119	2,056,105
Marketing and promotional expenses	873,227	646,321
Rental and related expenses	214,967	452,943
Depreciation and amortization expenses	50,332	142,862
Travel expenses	42,280	72,156
Expected credit losses	3,566	15,373
Others	290,009	649,682
Total	2,366,500	4,035,442

Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Loss Per Share

Schedule of basic and diluted loss per share


	For the Nine Months Ended September 30,
	2021	2022
Numerator:
Net loss	(616,966)	(2,297,650)
Less: Net loss attributable to noncontrolling interests	—	(28,497)
Net loss attributable to ordinary shareholders of Li Auto Inc.	(616,966)	(2,269,153)

Denominator:
Weighted average ordinary shares outstanding—basic and diluted	1,829,434,693	1,936,947,462

Basic and diluted net loss per share attributable to ordinary shareholders of Li Auto Inc.	(0.34)	(1.17)

Share-based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-based Compensation Arrangement by Share-based Payment Award

Schedule of compensation expenses recognized for share-based awards


	For the Nine Months Ended September 30,
	2021	2022
Research and development expenses	471,728	857,188
Selling, general and administrative expenses	220,244	465,475
Cost of sales	18,528	28,201
Total	710,500	1,350,864

2019 and 2020 Share Incentive Plan

Share-based Compensation Arrangement by Share-based Payment Award

Schedule of stock option activities


			Weighted
	Number of	Weighted	Average	Aggregate
	Options	Average	Remaining	Intrinsic
	and Shares	Exercise Price	Contractual Life	Value
		US$	In Years	US$
Outstanding as of December 31, 2020	56,914,000	0.10	5.95	814,724
Granted	36,987,700	0.10
Exercised	(1,519,362)	0.10
Forfeited	(3,408,000)	0.10
Outstanding as of September 30,2021	88,974,338	0.10	9.83	1,160,670
Outstanding as of December 31, 2021	83,391,284	0.10	7.66	1,330,091
Granted	—	0.10
Exercised	(5,268,714)	0.10
Forfeited	(3,372,800)	0.10
Outstanding as of September 30, 2022	74,749,770	0.10	5.81	852,521

Vested and expected to vest as of September 30, 2021	85,493,499	0.10	9.70	1,115,263
Exercisable as of September 30, 2021	45,896,638	0.10	7.54	598,722
Vested and expected to vest as of September 30, 2022	71,206,919	0.10	5.69	812,115
Exercisable as of September 30, 2022	46,825,570	0.10	4.34	534,046

Schedule of options fair value assumptions


		For the Nine Months Ended September 30,
		2021
Exercise price (US$)		0.10
Fair value of the ordinary shares on the date of option grant (US$)		14.42-17.35
Risk‑free interest rate		0.93%-1.48%
Expected term (in years)		10.00
Expected dividend yield		0%
Expected volatility		47%-48%

2021 Share Incentive Plan

Share-based Compensation Arrangement by Share-based Payment Award

Schedule of stock option activities


	Number of	Weighted	Weighted Average
	Shares	Average Exercise	Remaining	Aggregate
	Granted	Price	Contractual Life	Intrinsic Value
		US$	In Years	US$
December 31, 2020	—	—	—	—
Granted	108,557,400	14.63
September 30, 2021	108,557,400	14.63	9.44	—

December 31, 2021	108,557,400	14.63	9.19	—
Granted	—	—
September 30, 2022	108,557,400	14.63	8.44	—

Schedule of options fair value assumptions


		For the Nine Months Ended
		September 30, 2021
Exercise price (US$)		14.63
Fair value of the ordinary shares on the date of restricted shares grant (US$)		10.67
Risk-free interest rate		1.59%
Expected term (in years)		10.00
Expected dividend yield		0%
Expected volatility		47%

Taxation (Tables)

9 Months Ended

Sep. 30, 2022

Taxation

Schedule of composition of income tax benefit


	For the Nine Months Ended September 30,
	2021	2022
Current income tax expense	—	30,885
Deferred income tax expense/(benefit)	181,384	(61,056)
Total	181,384	(30,171)

Schedule of reconciliations of the income tax expenses


	For the Nine Months Ended September 30,
	2021	2022
Loss before income tax expense	(435,582)	(2,327,821)
Income tax credit computed at PRC statutory income tax rate of 25%	(108,896)	(581,955)
Tax effects of tax‑exempt entity and preferential tax rate	(58,380)	(320,294)
Tax effect of R&D deduction and others	(92,702)	(193,946)
Inventory write-downs and losses on inventory purchase commitments	12,814	200,700
Non‑deductible expenses	58,775	397,904
Change in valuation allowance	369,773	467,420
Income tax expense/(benefit)	181,384	(30,171)

Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Measurement

Schedule of major financial instruments measured at fair value, by level within the fair value hierarchy


		Fair Value Measurement at Reporting Date Using
		Quoted Prices
	Fair Value as of	in Active Markets for	Significant Other	Significant
	December 31,	Identical Assets	Observable Inputs	Unobservable Inputs
	2021	(Level 1)	(Level 2)	(Level 3)
Assets
Short-term investments	19,157,428	—	19,157,428	—
Equity securities with readily determinable fair value	28,452	28,452	—	—
Total assets	19,185,880	28,452	19,157,428	—


		Fair Value Measurement at Reporting Date Using
		Quoted Prices
	Fair Value as of	in Active Markets for	Significant Other	Significant
	September 30,	Identical Assets	Observable Inputs	Unobservable Inputs
	2022	(Level 1)	(Level 2)	(Level 3)
Assets
Short-term investments	14,487,344	—	14,487,344	—
Long-term financial instruments	50,085	—	50,085	—
Equity securities with readily determinable fair value	23,207	23,207	—	—
Total assets	14,560,636	23,207	14,537,429	—

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies.

Schedule of capital commitments


	Total	Less than One Year	1‑3 Years	3‑5 Years	Over 5 Years
Capital commitments	5,367,125	4,926,406	440,719	—	—

Schedule of purchase obligations


	Total	Less than One Year	1‑3 Years	3‑5 Years	Over 5 Years
Purchase obligations	13,890,466	13,890,466	—	—	—

Related Party Balances and Transactions (Tables)

9 Months Ended

Sep. 30, 2022


Name of Entity or Individual		Relationship with the Company
Beijing Yihang Intelligent Technology Co., Ltd. (“Beijing Yihang”)		Affiliate
Neolix Technologies Co., Ltd. (“Neolix Technologies”)		Affiliate
Airx (Beijing) Technology Co., Ltd. (“Airx”)		Affiliate
Beijing Judianchuxing Technology Limited (“Beijing Judianchuxing”)		Affiliate
Beijing Sankuai Online Technology Co., Ltd. (“Beijing Sankuai ”)		Controlled by Principal Shareholder
Suzhou Yihang Intelligent Technology Co., Ltd. (“Suzhou Yihang”)		Affiliate
Changzhou Huixiang New Energy Auto Parts Co., Ltd. (“Changzhou Huixiang”)		Affiliate
Hanhai Information Technology (Shanghai) Co., Ltd. (“Hanhai”)		Controlled by Principal Shareholder


	For the Nine Months Ended September 30,
	2021	2022
Purchased services from Beijing Sankuai	370	4,643
Purchase materials from Changzhou Huixiang	—	702
Purchased services from Hanhai	—	572
Purchased R&D services from Beijing Yihang	11,274	281
Purchased materials from Beijing Yihang	31,564	73
Purchased R&D service from Suzhou Yihang	872	—


	As of
	December 31, 2021	September 30, 2022
Due from Neolix Technologies	678	678
Due from Hanhai	—	373
Due from Beijing Yihang	334	—
Total	1,012	1,051


	As of
	December 31, 2021	September 30, 2022
Due to Beijing Yihang	7,102	5,921
Due to Changzhou Huixiang	30,000	702
Due to Beijing Sankuai	330	661
Due to Airx	23	23
Total	37,455	7,307

Organization and Nature of Operations - Reorganization (Details)	1 Months Ended
	Apr. 30, 2022	Mar. 31, 2022	Sep. 30, 2022	Apr. 30, 2021
Leading Ideal HK
Principal subsidiaries, consolidated VIEs and VIEs' subsidiaries
Entity interest held in subsidiaries (as percent)			100.00%
Wheels Technology
Principal subsidiaries, consolidated VIEs and VIEs' subsidiaries
Entity interest held in subsidiaries (as percent)			100.00%
Beijing Leading
Principal subsidiaries, consolidated VIEs and VIEs' subsidiaries
Entity interest held in subsidiaries (as percent)			100.00%
Jiangsu XD
Principal subsidiaries, consolidated VIEs and VIEs' subsidiaries
Entity interest held in subsidiaries (as percent)			100.00%
Leading Ideal Automobile Sales & Services (Shanghai) Co., Ltd
Principal subsidiaries, consolidated VIEs and VIEs' subsidiaries
Economic interest held in VIEs and VIEs' subsidiaries (as percent)	80.00%	80.00%
Beijing CHJ
Principal subsidiaries, consolidated VIEs and VIEs' subsidiaries
Entity interest held in subsidiaries (as percent)				50.00%
Beijing CHJ \| Leading Ideal HK
Principal subsidiaries, consolidated VIEs and VIEs' subsidiaries
Ownership percent			50.00%
Chongqing Lixiang Automobile
Principal subsidiaries, consolidated VIEs and VIEs' subsidiaries
Entity interest held in subsidiaries (as percent)			100.00%

Summary of Significant Accounting Policies (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2021 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Summary of Significant Accounting Policies
Total foreign currency translation adjustment income/(loss)	¥ 1,285,664	¥ (144,620)
Foreign currency exchange rate, translation	7.1135		7.1135
Cash held in online payments platform	¥ 64,218			¥ 33,540
Cash and cash equivalents	37,472,617		$ 5,267,817	27,854,224
Restricted cash	3,097,127		$ 435,387	2,638,840
Total cash, cash equivalents and restricted cash	¥ 40,569,744			¥ 30,493,064

Summary of Significant Accounting Policies - Trade receivables and current expected credit losses (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Jan. 01, 2021 CNY (¥)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	¥ 15,373	$ 2,161	¥ 3,566
Accumulated deficit	(9,074,788)			$ (1,275,714)	¥ (6,805,635)
Credit loss provision recorded in non-current assets	7,468				3,757
Allowance for credit losses.
Beginning balance	6,416		1,955
Provisions	20,954		4,038
Reversal	(5,581)		(472)
Ending balance	21,789		5,521
ASU 2016-13 \| Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	15,373		¥ 3,566
Accumulated deficit						¥ 1,955
Credit loss provision recorded in current assets						972
Credit loss provision recorded in non-current assets						¥ 983
ASU 2016-13 \| Adjusted Balance
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Credit loss provision recorded in current assets	14,321				2,659
Credit loss provision recorded in non-current assets	¥ 7,468				¥ 3,757

Summary of Significant Accounting Policies - Derivative instruments and Inventories (Details) - CNY (¥) ¥ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Summary of Significant Accounting Policies
Fair value gain of derivative instruments	¥ 0	¥ 61,241
Impairment loss of inventory write-downs to net realizable value on purchase commitments	¥ 802,799	¥ 51,256

Summary of Significant Accounting Policies - Property, plant and equipment, net (Details)	9 Months Ended
	Sep. 30, 2022
Buildings
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	20 years
Minimum \| Buildings improvements
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	5 years
Minimum \| Production facilities
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	3 years
Minimum \| Equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	3 years
Minimum \| Motor vehicles
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	2 years
Maximum \| Buildings improvements
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	10 years
Maximum \| Production facilities
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	10 years
Maximum \| Equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	5 years
Maximum \| Motor vehicles
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	4 years

Summary of Significant Accounting Policies - Intangible assets, net, Impairment of long lived assets and intangible assets with indefinite lives and Employee benefits (Details) ¥ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥)
Mold and tooling
Finite-Lived Intangible Assets [Line Items]
Increased depreciation expense recorded in inventories and cost of sales	¥ 225,791
Minimum
Finite-Lived Intangible Assets [Line Items]
Intangible asset, useful lives	3 years
Maximum
Finite-Lived Intangible Assets [Line Items]
Intangible asset, useful lives	10 years

Summary of Significant Accounting Policies - Product warranties (Details) - CNY (¥) ¥ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Summary of Significant Accounting Policies
Product warranty term	12 months
Accrued warranty at beginning of the year		¥ 233,366
Warranty cost incurred	¥ (35,128)	(15,069)
Provision for warranty	482,742	385,730
Accrued warranty at end of the year	¥ 1,289,959	¥ 604,027

Summary of Significant Accounting Policies - Product warranties, current and non-current and Revenue recognition (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Summary of Significant Accounting Policies
Accrued warranty	¥ 842,345	¥ 1,289,959		¥ 604,027	¥ 233,366
Including: Accrued warranty, current		152,648	¥ 154,276	111,645
Accrued warranty, non-current		¥ 1,137,311		¥ 492,382

Summary of Significant Accounting Policies - Leases and Segment reporting (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥) segment	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets, net	¥ 3,277,542	$ 460,750	¥ 2,061,492
Operating lease liabilities, current	707,068	99,398	473,245
Operating lease liabilities, noncurrent	¥ 1,743,489	$ 245,096	1,369,825
Operating lease term (in years)	50 years	50 years
Number of reportable segments \| segment	1
Other non-current liabilities
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred government grants \| ¥	¥ 408,666		¥ 0

Concentration and Risks (Details) - CNY (¥) ¥ in Thousands	9 Months Ended
Concentration and Risks (Details) - CNY (¥) ¥ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Concentration and risks
Cash and cash equivalents, restricted cash, time deposits and shortterm investments and long-term financial instruments subject to government controls.	¥ 50,848,631		¥ 24,509,656
Percentage of appreciation of domestic currency (RMB) against foreign currency(US$)		0.60%
Percentage of depreciation of peoples domestic currency (RMB) against foreign currency(US$)	11.40%

Trade receivable (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
Trade receivable (Details) ¥ in Thousands, $ in Thousands	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Trade receivable
Total	¥ 32,582	$ 4,580	¥ 120,541
Within 3 months
Trade receivable
Total	¥ 17,488		16,462
Trade receivable period	3 months
Between 3 months and 6 months
Trade receivable
Total	¥ 1,961		890
Between 3 months and 6 months \| Minimum
Trade receivable
Trade receivable period	3 months
Between 3 months and 6 months \| Maximum
Trade receivable
Trade receivable period	6 months
Between 6 months and 1 year
Trade receivable
Total	¥ 0		0
Between 6 months and 1 year \| Minimum
Trade receivable
Trade receivable period	6 months
Between 6 months and 1 year \| Maximum
Trade receivable
Trade receivable period	1 year
More than 1 year
Trade receivable
Total	¥ 13,133		¥ 103,189
Trade receivable period	1 year

Inventories (Details) ¥ in Thousands, $ in Thousands	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Inventories
Raw materials, work in process and supplies	¥ 3,004,293		¥ 1,468,801
Finished products	2,511,488		149,089
Total	¥ 5,515,781	$ 775,396	¥ 1,617,890

Inventories - Additional Information (Details) - CNY (¥) ¥ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Inventories
Impairment loss of inventory write-downs on purchase commitments	¥ 802,799	¥ 51,256

Prepayments and Other Current Assets (Details) ¥ in Thousands, $ in Thousands	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Deductible VAT input	¥ 630,369		¥ 118,177
Prepaid rental and deposits	276,577		48,929
Prepayments to vendors	240,345		218,660
Receivables related to rebate	0		28,491
Others	326,561		68,615
Less:Allowance for Credit Losses	(14,172)		(2,192)
Total	¥ 1,459,680	$ 205,199	¥ 480,680

Property, Plant and Equipment, Net (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Property, plant and equipment
Total property, plant and equipment, gross	¥ 11,237,847				¥ 5,539,261
Less: Accumulated depreciation	(1,838,044)				(983,222)
Less: Accumulated impairment loss	(38,299)				(57,770)
Total property, plant and equipment, net	9,361,504			$ 1,316,019	4,498,269
Depreciation expenses	771,712		¥ 374,732
Impairment loss related to the property, plant and equipment	0	$ 0	¥ 27,388
Other noncurrent assets	2,196,550			308,787	1,981,076
Other noncurrent liabilities	1,805,869			$ 253,865	802,259
Beijing Manufacturing Base Agreements \| Automotive Manufacturing Permission
Property, plant and equipment
Construction in process	404,111
Other noncurrent liabilities	242,124
Construction in process
Property, plant and equipment
Total property, plant and equipment, gross	3,834,714				1,942,953
Mold and tooling
Property, plant and equipment
Total property, plant and equipment, gross	2,202,863				1,098,392
Production facilities
Property, plant and equipment
Total property, plant and equipment, gross	2,192,717				804,281
Leasehold improvements
Property, plant and equipment
Total property, plant and equipment, gross	929,625				660,902
Buildings
Property, plant and equipment
Total property, plant and equipment, gross	877,066				409,123
Buildings improvements
Property, plant and equipment
Total property, plant and equipment, gross	317,229				297,163
Equipment
Property, plant and equipment
Total property, plant and equipment, gross	514,047				266,745
Motor vehicles
Property, plant and equipment
Total property, plant and equipment, gross	¥ 369,586				¥ 59,702

Property, Plant and Equipment, Net - Additional information (Details) ¥ in Thousands, $ in Thousands		9 Months Ended			12 Months Ended
	Aug. 27, 2021 CNY (¥) item	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)	Dec. 31, 2021 CNY (¥)	Apr. 30, 2021
Property, Plant and Equipment [Line Items]
Impairment of long-lived assets		¥ 0	$ 0	¥ 27,388
Mianyang Xinchen("Xinchen") \| Sichuan Li Xinchen
Property, Plant and Equipment [Line Items]
Capital contribution of long-lived assets received	¥ 228,668
Beijing CHJ
Property, Plant and Equipment [Line Items]
Percentage of equity interest						50.00%
Beijing CHJ \| Mianyang Xinchen("Xinchen")
Property, Plant and Equipment [Line Items]
Percentage of equity interest	51.00%
Beijing CHJ \| Mianyang Xinchen("Xinchen") \| Sichuan Li Xinchen
Property, Plant and Equipment [Line Items]
Percentage of equity interest	51.00%
Total number of board members \| item	5
Right to nominate number of board members \| item	3
Production facilities \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)		3 years	3 years
Production facilities \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)		10 years	10 years
Mold and tooling
Property, Plant and Equipment [Line Items]
Increased depreciation expense recorded in inventories and cost of sales		¥ 225,791
Production facilities and mold and tooling
Property, Plant and Equipment [Line Items]
Impairment of long-lived assets					¥ 27,388

Intangible Assets, Net (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2021 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items]
Indefinite-lived intangible assets, net	¥ 682,174			¥ 647,174
Definite-lived intangible assets	197,399			138,270
Less: Accumulated amortization	47,543			33,984
Total	149,856			104,286
Total intangible assets, net	832,030		$ 116,965	751,460
Amortization expenses	13,559	¥ 7,843
Software
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items]
Definite-lived intangible assets	196,705			137,576
Less: Accumulated amortization	46,849			33,290
Patents
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items]
Definite-lived intangible assets	694			694
Less: Accumulated amortization	694			694
Automotive Manufacturing Permission
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items]
Indefinite-lived intangible assets, net	647,174			647,174
Insurance Agent License
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items]
Indefinite-lived intangible assets, net	¥ 35,000			¥ 0

Intangible Assets, Net - Amortization expenses (Details) - CNY (¥) ¥ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Finite-lived intangible assets, net, amortization expense, rolling maturity
Year ending September 30, 2023	¥ 22,341
Year ending September 30, 2024	19,501
Year ending September 30, 2025	16,798
Year ending September 30, 2026	15,925
Thereafter	75,291
Total	¥ 149,856	¥ 104,286

Leases - Additional information (Details) - CNY (¥) ¥ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021	Nov. 30, 2021
Lessee Lease
Total consideration of land use rights	¥ 683,433
Operating lease term (in years)	50 years
Jiangsu CHJ \| Changzhou Chehejin
Lessee Lease
Total consideration	¥ 567,118
Equity interest (as a percent)			100.00%
Total consideration in cash paid	537,009
Changzhou Chehejin
Lessee Lease
Business combination recognized identifiable assets acquired and liabilities assumed property plant and equipment		¥ 47,876
Chongqing Lixiang Automobile \| Changzhou Chehejin
Lessee Lease
Amortization of land use rights	¥ 9,112

Other Non-current Assets (Details) ¥ in Thousands, $ in Thousands	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Other Non-current Assets
Long-term deposits	¥ 1,025,566		¥ 653,030
Prepayments for purchase of property, plant and equipment	676,438		1,051,415
Deductible VAT input, non-current	412,696		263,390
Others	89,318		16,998
Less: Allowance for credit losses	(7,468)		(3,757)
Total	¥ 2,196,550	$ 308,787	¥ 1,981,076

Long term Investments (Details) - CNY (¥) ¥ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Equity investments:
Total Long-term Investments	¥ 1,480,987	¥ 156,306
Equity Method
Equity investments:
Total Long-term Investments	184,447	34,704
Equity Security With Readily Determinable Fair Values
Equity investments:
Total Long-term Investments	23,207	28,452
Equity Securities Without Readily Determinable Fair Values
Equity investments:
Total Long-term Investments	508,730	93,150
Long-term time deposits
Equity investments:
Total Long-term Investments	714,518	0
Long-term financial instruments
Equity investments:
Total Long-term Investments	¥ 50,085	¥ 0

Long-term Investments- Equity Method Investments (Details) ¥ in Thousands, $ in Thousands			9 Months Ended	12 Months Ended	21 Months Ended
	Jan. 30, 2019 CNY (¥)	Sep. 11, 2018 CNY (¥)	Sep. 30, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Sep. 30, 2022 CNY (¥)	Jul. 31, 2021 USD ($)
Long Term Investments, Disclosure [Line Items]
Cash consideration	¥ 98,000	¥ 98,000
Equity method investment			¥ 0		¥ 0
Impairment of equity method investments			0	¥ 0	¥ 0
Beijing Judianchuxing Technology Limited
Long Term Investments, Disclosure [Line Items]
Equity method ownership percent		49.00%
Changzhou Huixiang
Long Term Investments, Disclosure [Line Items]
Equity method ownership percent	49.00%					49.00%
Equity method investment \| $						$ 73,500
Suzhou Huichuan United Power System Co., Ltd
Long Term Investments, Disclosure [Line Items]
Equity method ownership percent						51.00%
Changzhou Huixiang New Energy Auto Parts Co., Ltd
Long Term Investments, Disclosure [Line Items]
Cash consideration			¥ 30,000
Beijing Judianchuxing Technology Limited
Long Term Investments, Disclosure [Line Items]
Ownership percent		51.00%

Long-term Investments - Equity Security with Or without Readily Determinable Fair Values (Details) ¥ in Thousands, $ in Thousands			9 Months Ended			12 Months Ended
	Jan. 30, 2019 CNY (¥)	Sep. 11, 2018 CNY (¥)	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)	Dec. 31, 2018 CNY (¥) shares	Dec. 31, 2018 USD ($) shares	Mar. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Jul. 31, 2021 CNY (¥)
Equity Security with Readily Determinable Fair Values
Cost Basis			¥ 100,303						¥ 100,303
Unrealized Loss			(81,237)						(73,535)
Foreign Currency Translation			4,141						1,684
Fair Value			23,207						28,452
Total cash consideration for purchase of Series C preferred shares			663,090	$ 93,216	¥ 0
Equity Securities without Readily Determinable Fair Values
Investment consideration			508,730						¥ 93,150
Impairment			7,200		¥ 0
Equity method investment			0
Cash consideration	¥ 98,000	¥ 98,000
Xin Wang Da Electronics Limited
Equity Securities without Readily Determinable Fair Values
Investment consideration								¥ 400,000
Chongqing Chezhiyuan
Equity Securities without Readily Determinable Fair Values
Investment consideration			¥ 400,000
Suzhou Huichuan United Power System Co., Ltd
Equity Securities without Readily Determinable Fair Values
Equity method investment										¥ 76,500
Xindian Information \| Xin Wang Da Electronics Limited
Equity Securities without Readily Determinable Fair Values
Ownership percent								3.20%
Cango Inc.
Equity Security with Readily Determinable Fair Values
Number of Series C preferred shares purchased \| shares						2,633,644	2,633,644
Total cash consideration for purchase of Series C preferred shares						¥ 100,303	$ 15,634

Short-term Borrowings and Long-term Borrowings - Borrowings (Details) ¥ in Thousands, $ in Thousands		1 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2022 CNY (¥)	Jun. 30, 2022	Sep. 30, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Sep. 30, 2022 USD ($)	Jul. 31, 2022 CNY (¥)	Feb. 28, 2022 CNY (¥)	Dec. 31, 2021 USD ($)	Apr. 30, 2021 CNY (¥)
Debt Instrument [Line Items]
Total	¥ 9,492,276		¥ 9,492,276	¥ 5,997,941
Short-term borrowings	528,065		528,065	37,042	$ 74,234
Long-term borrowings	8,964,211		8,964,211	¥ 5,960,899	$ 1,260,169
Convertible debt matures on May 1, 2028
Debt Instrument [Line Items]
Principal Amount								$ 862,500	¥ 862,500
Interest Rate Per Annum				0.25%				0.25%	0.25%
Long-term borrowings	6,024,126		6,024,126	¥ 5,397,941
Secured bank loan matures on 15 February 2027
Debt Instrument [Line Items]
Principal Amount				¥ 900,000			¥ 900,000
Period of LPR considered				5 years
Percentage of difference to LPR				0.40%
Total	900,000		900,000	¥ 0
Short-term borrowings	110,000		110,000	0
Long-term borrowings	790,000		790,000	0
Credit guaranteed borrowing matures on June 29, 2024
Debt Instrument [Line Items]
Principal Amount \| $								$ 100,000
Total	709,980		709,980	0
Short-term borrowings	7,100		7,100	0
Long-term borrowings	702,880		702,880	0
Secured bank loan matures on September 28, 2029
Debt Instrument [Line Items]
Principal Amount				¥ 600,000
Interest Rate Per Annum				4.80%				4.80%
Total	600,000		600,000	¥ 600,000
Short-term borrowings	74,083		74,083	37,042
Long-term borrowings	525,917		525,917	562,958
Secured borrowing matures on June 21, 2034
Debt Instrument [Line Items]
Principal Amount				¥ 311,735
Period of LPR considered		5 years		5 years
Percentage of difference to LPR		0.60%		0.60%
Total	311,735		311,735	¥ 0
Long-term borrowings	¥ 311,735		¥ 311,735	0
Credit guaranteed borrowing matures on July 26, 2025
Debt Instrument [Line Items]
Principal Amount				¥ 300,000		¥ 300,000
Interest Rate Per Annum	3.70%		3.70%	3.70%	3.70%			3.70%
Total	¥ 300,000		¥ 300,000	¥ 0
Short-term borrowings	100,000		100,000	0
Long-term borrowings	200,000		200,000	0
Unsecured borrowing matures on March 8, 2024
Debt Instrument [Line Items]
Principal Amount	¥ 260,000		260,000	¥ 260,000
Period of LPR considered	1 year			1 year
Percentage of difference to LPR	0.70%			0.70%
Total				¥ 0
Long-term borrowings	¥ 260,000		260,000	¥ 0
Secured borrowing matures on March 25, 2025
Debt Instrument [Line Items]
Principal Amount	249,255		249,255
Interest Rate Per Annum				4.00%				4.00%
Total	249,255		249,255	¥ 0
Short-term borrowings	99,702		99,702	0
Long-term borrowings	149,553		149,553	¥ 0
Unsecured borrowing matures on April 19, 2023
Debt Instrument [Line Items]
Principal Amount	137,180		¥ 137,180
Period of LPR considered			1 year	1 year
Percentage of difference to LPR			0.20%	0.20%
Total				¥ 0
Short-term borrowings	¥ 137,180		¥ 137,180	¥ 0

Short-term Borrowings and Long-term Borrowings - Additional information (Details) $ in Thousands		1 Months Ended										9 Months Ended				12 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 CNY (¥)	Jul. 31, 2022 CNY (¥)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2022 USD ($)	Apr. 30, 2022 CNY (¥)	Feb. 28, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Sep. 30, 2021 CNY (¥)	Apr. 30, 2021 CNY (¥)	Apr. 30, 2021 USD ($)	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)	Sep. 30, 2021 USD ($)	Dec. 31, 2021 CNY (¥)	Sep. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)	Apr. 30, 2021 $ / shares	Apr. 30, 2021 CNY (¥)	Apr. 30, 2021 USD ($)
Short term borrowings
Repayments of Debt												¥ 149,850,000	$ 21,066	¥ 429,692,000
Proceeds from issuance of debt												2,977,934,000	418,632	400,000,000
Non-current portion	¥ 8,964,211,000	¥ 8,964,211,000						¥ 5,960,899,000				8,964,211,000				¥ 5,960,899,000	$ 1,260,169
Convertible debt matures on May 1, 2028
Short term borrowings
Principal Amount																			$ 862,500		¥ 862,500,000
Interest rate (as a percent)								0.25%								0.25%			0.25%		0.25%	0.25%
Proceeds from issuance of debt										¥ 5,533,238,000	$ 844,876
Percentage of discount on share issue price										26.56%	26.56%
Percentage of principal amount redeemed										100.00%	100.00%
Interest expense debt												22,871,000	$ 3,215	13,993,000	$ 2,172
Debt instrument carrying amount	6,123,578,000	6,123,578,000							¥ 5,499,041,000			6,123,578,000		5,499,041,000
Unamortized debt issuance cost	99,452,000	99,452,000						¥ 101,100,000				99,452,000				¥ 101,100,000
Non-current portion	6,024,126,000	6,024,126,000						5,397,941,000				¥ 6,024,126,000				¥ 5,397,941,000
Secured bank loan matures on 15 February 2027
Short term borrowings
Period of LPR considered																5 years
Percentage of difference to LPR																0.40%
Principal Amount							¥ 900,000,000	900,000,000								¥ 900,000,000
Term of borrowings (in years)							5 years					12 months	12 months
Current portion	110,000,000	110,000,000										¥ 110,000,000
Non-current portion	790,000,000	790,000,000						0				790,000,000				0
Minimum current assets to be maintained as a loan covenant	¥ 5,000,000	¥ 5,000,000										¥ 5,000,000
Secured bank loan matures on 15 February 2027 \| Minimum
Short term borrowings
Interest rate (as a percent)	3.90%	3.90%										3.90%					3.90%
Secured bank loan matures on 15 February 2027 \| Maximum
Short term borrowings
Interest rate (as a percent)	4.05%	4.05%										4.05%					4.05%
Credit guaranteed borrowing matures on June 29, 2024
Short term borrowings
Maximum borrowing capacity \| $																		$ 200,000
Amount drew drawn				¥ 709,980,000	$ 100,000
Principal Amount \| $																			$ 100,000
Outstanding loan principal, current	¥ 7,100,000	¥ 7,100,000										¥ 7,100,000
Outstanding loan principal, non-current	702,880,000	702,880,000										¥ 702,880,000
Term of borrowings (in years)												12 months	12 months
Non-current portion	702,880,000	702,880,000						0				¥ 702,880,000				0
Secured bank loan matures on September 28, 2029
Short term borrowings
Interest rate on loan (as a percent)									4.80%
Principal Amount								¥ 600,000,000								¥ 600,000,000
Outstanding loan principal	600,000,000	600,000,000										600,000,000
Outstanding loan principal, current	74,083,000	74,083,000										74,083,000
Outstanding loan principal, non-current	525,917,000	525,917,000										525,917,000
Unused credit limit	409,900,000	409,900,000										¥ 409,900,000
Term of borrowings (in years)												12 months	12 months
Interest rate (as a percent)								4.80%								4.80%			4.80%
Remaining borrowing capacity	409,900,000	409,900,000										¥ 409,900,000
Non-current portion	525,917,000	525,917,000						¥ 562,958,000				525,917,000				¥ 562,958,000
Secured borrowing matures on June 21, 2034
Short term borrowings
Maximum borrowing capacity				¥ 3,000,000,000
Amount drew drawn	311,735,000
Period of LPR considered				5 years	5 years											5 years
Percentage of difference to LPR				0.60%	0.60%											0.60%
Principal Amount								311,735,000								¥ 311,735,000
Non-current portion	¥ 311,735,000	¥ 311,735,000						0				¥ 311,735,000				0
Credit guaranteed borrowing matures on July 26, 2025
Short term borrowings
Principal Amount			¥ 300,000,000					¥ 300,000,000								¥ 300,000,000
Term of borrowings (in years)			3 years									12 months	12 months
Interest rate (as a percent)	3.70%	3.70%						3.70%				3.70%				3.70%	3.70%		3.70%
Current portion	¥ 100,000,000	¥ 100,000,000										¥ 100,000,000
Non-current portion	¥ 200,000,000	200,000,000						¥ 0				200,000,000				¥ 0
Unsecured borrowing matures on March 8, 2024
Short term borrowings
Period of LPR considered	1 year															1 year
Percentage of difference to LPR	0.70%															0.70%
Principal Amount	¥ 260,000,000	¥ 260,000,000						260,000,000				260,000,000				¥ 260,000,000
Term of borrowings (in years)		18 months
Non-current portion	260,000,000	¥ 260,000,000						¥ 0				260,000,000				¥ 0
Secured borrowing matures on March 25, 2025
Short term borrowings
Principal Amount	249,255,000	249,255,000										¥ 249,255,000
Term of borrowings (in years)												12 months	12 months
Interest rate (as a percent)								4.00%								4.00%			4.00%
Repayments of Debt												¥ 49,851,000
Consideration							¥ 299,106,000
Option to repurchase asset transferred in lease							¥ 1.000
Current portion	99,702,000	99,702,000										99,702,000
Non-current portion	149,553,000	149,553,000						¥ 0				¥ 149,553,000				¥ 0
Unsecured borrowing matures on April 19, 2023
Short term borrowings
Maximum borrowing capacity						¥ 500,000,000		¥ 500,000,000								¥ 500,000,000
Period of LPR considered												1 year	1 year			1 year
Percentage of difference to LPR												0.20%	0.20%			0.20%
Principal Amount	137,180,000	137,180,000										¥ 137,180,000
Term of borrowings (in years)						1 year		1 year
Current portion	¥ 137,180,000	¥ 137,180,000										¥ 137,180,000
ADS \| Convertible debt matures on May 1, 2028
Short term borrowings
Debt instrument convertible conversion ratio										28.34	28.34
Class A Ordinary Shares \| Convertible debt matures on May 1, 2028
Short term borrowings
Debt instrument convertible conversion ratio										14.17	14.17
Share price \| $ / shares																				$ 150.00
USD \| Convertible debt matures on May 1, 2028
Short term borrowings
Debt instrument convertible conversion ratio										28.34	28.34
RMB \| Convertible debt matures on May 1, 2028
Short term borrowings
Principal Amount \| $																						$ 1,000
Debt instrument convertible conversion ratio										35.2818	35.2818
RMB \| Secured bank loan matures on September 28, 2029
Short term borrowings
Maximum borrowing capacity									¥ 1,009,900,000					¥ 1,009,900,000

Trade and Notes Payable (Details) ¥ in Thousands, $ in Thousands	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Trade and Notes Payable
Trade payable for raw materials	¥ 9,417,573		¥ 7,089,370
Notes payable	6,102,648		2,286,680
Total	¥ 15,520,221	$ 2,181,798	¥ 9,376,050

Trade and Notes Payable - Aging Analysis Of Trade and Notes Payable (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Trade and Notes Payable
Total	¥ 15,520,221	$ 2,181,798	¥ 9,376,050
Within 3 months
Trade and Notes Payable
Total	¥ 14,790,078		7,539,833
Trade and note payable period	3 months
Between 3 months and 6 months
Trade and Notes Payable
Total	¥ 619,430		1,639,286
Between 3 months and 6 months \| Minimum
Trade and Notes Payable
Trade and note payable period	3 months
Between 3 months and 6 months \| Maximum
Trade and Notes Payable
Trade and note payable period	6 months
Between 6 months and 1 year
Trade and Notes Payable
Total	¥ 49,608		161,913
Between 6 months and 1 year \| Minimum
Trade and Notes Payable
Trade and note payable period	6 months
Between 6 months and 1 year \| Maximum
Trade and Notes Payable
Trade and note payable period	1 year
More than 1 year
Trade and Notes Payable
Total	¥ 61,105		¥ 35,018
Trade and note payable period	1 year

Accruals and Other Current Liabilities (Details) ¥ in Thousands, $ in Thousands	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Sep. 30, 2021 CNY (¥)
Accruals and Other Current Liabilities
Payables for purchase of property, plant and equipment	¥ 1,643,136		¥ 456,395
Salaries and benefits payable	688,164		417,449
Accrued costs of purchase commitments relating to inventory	519,470		0
Payables for research and development expenses	358,286		94,517
Tax payable	326,462		277,233
Payables for logistics expenses	263,051		143,632
Payables for marketing and promotional expenses	182,918		96,945
Accrued warranty	152,648		154,276	¥ 111,645
Deposits from vendors	25,847		27,716
Advances from customers	24,809		10,262
Other payables	430,605		200,943
Total	¥ 4,615,396	$ 648,823	¥ 1,879,368

Revenue Disaggregation (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)
Revenue Disaggregation
Revenue	¥ 27,636,942	$ 3,885,140	¥ 16,389,327
Vehicle sales
Revenue Disaggregation
Revenue	26,838,104	3,772,841	15,752,753
Other sales and services
Revenue Disaggregation
Revenue	¥ 798,838	$ 112,299	¥ 636,574

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

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+ Details

Revenue Disaggregation - Revenue By Timing of Recognition (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)
Revenue Disaggregation
Revenue	¥ 27,636,942	$ 3,885,140	¥ 16,389,327
Vehicle sales
Revenue Disaggregation
Revenue	26,838,104	3,772,841	15,752,753
Other sales and services
Revenue Disaggregation
Revenue	798,838	$ 112,299	636,574
Revenue recognized at a point in time
Revenue Disaggregation
Revenue	27,521,216		16,328,599
Revenue recognized at a point in time \| Vehicle sales
Revenue Disaggregation
Revenue	26,838,104		15,752,753
Revenue recognized at a point in time \| Other sales and services
Revenue Disaggregation
Revenue	683,112		575,846
Revenue recognized over time
Revenue Disaggregation
Revenue	¥ 115,726		¥ 60,728

- Definition

+ References

+ Details

Deferred Revenue (Details) - CNY (¥) ¥ in Thousands	9 Months Ended
Deferred Revenue (Details) - CNY (¥) ¥ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Deferred Revenue
Deferred revenue-at beginning of the period	¥ 694,745	¥ 407,168
Additions	27,961,660	16,641,641
Recognition	(27,549,157)	(16,492,788)
Deferred revenue-at end of the period	¥ 1,107,248	¥ 556,021

Deferred Revenue - Additional information (Details) $ in Thousands	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Sep. 30, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Deferred revenue	¥ 1,107,248,000		¥ 694,745,000	¥ 556,021,000	¥ 407,168,000
Deferred revenue, current	522,613,000	$ 73,468	305,092,000	244,083,000
Deferred revenue, noncurrent	584,635,000	$ 82,187	¥ 389,653,000	¥ 311,938,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Performance obligation expected to be recognized	¥ 522,613,000
Period of performance obligation expected to be recognized	12 months	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Performance obligation expected to be recognized	¥ 584,635,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 \| Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Period of performance obligation expected to be recognized	12 months	12 months

Research and Development Expenses (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)
Research and Development Expenses.
Employee compensation	¥ 2,761,585		¥ 1,339,965
Design and development expenses	1,660,395		584,921
Rental and related expenses	76,408		34,496
Depreciation and amortization expenses	62,371		38,635
Travel expenses	54,304		33,591
Others	94,878		24,790
Total	¥ 4,709,941	$ 662,113	¥ 2,056,398

Selling, General and Administrative Expenses (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)
Selling, General and Administrative Expenses.
Employee compensation	¥ 2,056,105		¥ 892,119
Marketing and promotional expenses	646,321		873,227
Rental and related expenses	452,943		214,967
Depreciation and amortization expenses	142,862		50,332
Travel expenses	72,156		42,280
Expected credit losses	15,373		3,566
Others	649,682		290,009
Total	¥ 4,035,442	$ 567,293	¥ 2,366,500

Ordinary Shares (Details) ¥ in Thousands, $ in Thousands, $ in Thousands					1 Months Ended							9 Months Ended
	Sep. 30, 2022 shares	Jun. 28, 2022 USD ($) shares	Aug. 07, 2020 USD ($) shares	Jul. 04, 2016 CNY (¥)	Sep. 30, 2021 HKD ($) shares	Aug. 31, 2021 HKD ($) shares	May 31, 2021 shares	Feb. 28, 2021 shares	Dec. 31, 2020 shares	Aug. 31, 2020 USD ($) shares	Jul. 31, 2019 Vote shares	Sep. 30, 2022 CNY (¥) shares	Sep. 30, 2022 USD ($) shares	Sep. 30, 2021 CNY (¥)	Dec. 31, 2021 shares
Ordinary Shares
Class B to Class A Ordinary Shares, Conversion Ratio											1
Cash paid												¥ 0	$ 0	¥ 70
Proceeds from IPOs and concurrent private placements, net of issuance cost												¥ 0	$ 0	¥ 11,040,204
Number of shares issued (in shares)	1,953,820,766											1,953,820,766	1,953,820,766		1,929,562,426
Number of shares outstanding (in shares)	1,953,820,766											1,953,820,766	1,953,820,766		1,929,562,426
Number of share options exercised												11,673,130	11,673,130
Value of ADS's sold \| $		$ 2,000,000
RSU
Ordinary Shares
Number of share options vested												127,062	127,062
Over-allotment option
Ordinary Shares
Proceeds from IPOs and concurrent private placements, net of issuance cost \| $						$ 11,633,130
Follow-on offering
Ordinary Shares
Proceeds from IPOs and concurrent private placements, net of issuance cost \| $					$ 1,634,462
Class A Ordinary Shares
Ordinary Shares
Ordinary shares, shares authorized	4,500,000,000										3,830,157,186	4,500,000,000	4,500,000,000		4,500,000,000
Number of votes entitled \| Vote											1
Cash paid \| $										$ 380,000
Share issuance, net of issuance costs (in shares)	18,862,564					100,000,000				66,086,955
Shares issued upon conversion of preferred shares (in shares)										1,045,789,275
Number of shares issued (in shares)	1,728,765,894											1,728,765,894	1,728,765,894		1,709,903,330
Number of shares outstanding (in shares)	1,598,008,686											1,598,008,686	1,598,008,686		1,573,750,346
Issuance of ordinary shares as treasury shares ( Shares)					13,869,700			34,000,000
Number of shares per ADS (in shares)		2
Class A Ordinary Shares \| Initial Public Offering
Ordinary Shares
Share issuance, net of issuance costs (in shares)										190,000,000
Proceeds from IPOs and concurrent private placements, net of issuance cost \| $										$ 1,042,137
Class A Ordinary Shares \| Over-allotment option
Ordinary Shares
Cash paid \| $			$ 157,320
Share issuance, net of issuance costs (in shares)			28,500,000						14,100,000
Class A Ordinary Shares \| Follow-on offering
Ordinary Shares
Share issuance, net of issuance costs (in shares)									108,100,000
Class B Ordinary Shares
Ordinary Shares
Ordinary shares, shares authorized	500,000,000										240,000,000	500,000,000	500,000,000		500,000,000
Number of votes entitled \| Vote											10
Number of shares issued (in shares)	355,812,080											355,812,080	355,812,080		355,812,080
Number of shares outstanding (in shares)	355,812,080											355,812,080	355,812,080		355,812,080
Class B Ordinary Shares \| Mr. Li Xiang
Ordinary Shares
Share issuance, net of issuance costs (in shares)							108,557,400
Shares issued upon conversion of preferred shares (in shares)										115,812,080
Series PreA shares \| Beijing CHJ
Ordinary Shares
Cash paid \| ¥				¥ 100,000

Loss Per Share (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands	9 Months Ended			12 Months Ended
	Sep. 30, 2022 CNY (¥) ¥ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares	Sep. 30, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2019 shares
Numerator:
Net loss	¥ (2,297,650)	$ (322,999)	¥ (616,966)
Less: Net loss attributable to noncontrolling interests	(28,497)	$ (4,006)	0
Net loss attributable to ordinary shareholders of Li Auto Inc. \| ¥	¥ (2,269,153)		¥ (616,966)
Denominator:
Weighted average ordinary shares outstanding-basic	1,936,947,462	1,936,947,462	1,829,434,693
Weighted average ordinary shares outstanding-diluted	1,936,947,462	1,936,947,462	1,829,434,693	255,000,000
Basic net loss per share attributable to ordinary shareholders of Li Auto Inc. \| (per share)	¥ (1.17)	$ (0.16)	¥ (0.34)
Diluted net loss per share attributable to ordinary shareholders of Li Auto Inc. \| (per share)	¥ (1.17)	$ (0.16)	¥ (0.34)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

Loss Per Share - Additional information (Details) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
RSU
Antidilutive Securities Excluded from Computation of Earnings Per Share
Weighted average numbers of shares excluded from the calculation of diluted loss per share	83,592,560	69,003,813
Convertible debts
Antidilutive Securities Excluded from Computation of Earnings Per Share
Weighted average numbers of shares excluded from the calculation of diluted loss per share	60,861,105	39,682,332

Share-based Compensation - Compensation expenses (Details) - CNY (¥) ¥ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	¥ 1,350,864	¥ 710,500
Research and development expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	857,188	471,728
Selling, general and administrative expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	465,475	220,244
Cost of sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	¥ 28,201	¥ 18,528

Share-based Compensation - Schedule of stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award
Number of Options and Shares, Exercised	(11,673,130)
2019 and 2020 Share Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award
Number of Options and Shares Outstanding, Beginning balance	83,391,284	56,914,000	56,914,000
Number of Options and Shares, Granted	0	36,987,700	0
Number of Options and Shares, Exercised	(5,268,714)	(1,519,362)
Number of Options and Shares, Forfeited	(3,372,800)	(3,408,000)
Number of Options and Shares Outstanding, Ending balance	74,749,770	88,974,338	83,391,284	56,914,000
Weighted average exercise price, Outstanding	$ 0.10	$ 0.10	$ 0.10
Weighted average exercise price, Granted		0.10	0.10
Weighted average exercise price, Exercised	0.10	0.10
Weighted average exercise price, Forfeited	0.10	0.10
Weighted average exercise price, Outstanding	$ 0.10	$ 0.10	$ 0.10	$ 0.10
Weighted average remaining contractual life (in years)	5 years 9 months 21 days	9 years 9 months 29 days	7 years 7 months 28 days	5 years 11 months 12 days
Aggregate intrinsic value, Outstanding	$ 852,521	$ 1,160,670	$ 1,330,091	$ 814,724
Number of Options Outstanding, Vested and expected	71,206,919	85,493,499
Weighted average exercise price, Vested and expected	$ 0.10	$ 0.10
Weighted average remaining contractual life , Vested and expected (in years)	5 years 8 months 8 days	9 years 8 months 12 days
Aggregate intrinsic value, Vested and expected	$ 812,115	$ 1,115,263
Number of Options Outstanding, Exercisable	46,825,570	45,896,638
Weighted average exercise price, Exercisable	$ 0.10	$ 0.10
Weighted average remaining contractual life , Exercisable (in years)	4 years 4 months 2 days	7 years 6 months 14 days
Aggregate intrinsic value, Exercisable	$ 534,046	$ 598,722
2021 Share Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award
Number of Options and Shares Outstanding, Beginning balance	108,557,400	0	0
Number of Options and Shares, Granted	0	108,557,400
Number of Options and Shares Outstanding, Ending balance	108,557,400	108,557,400	108,557,400	0
Weighted average exercise price, Outstanding	$ 14.63	$ 0	$ 0
Weighted average exercise price, Granted	0	14.63
Weighted average exercise price, Outstanding	$ 14.63	$ 14.63	$ 14.63	$ 0
Weighted average remaining contractual life (in years)	8 years 5 months 8 days	9 years 5 months 8 days	9 years 2 months 8 days	0 years
Aggregate intrinsic value, Outstanding	$ 0	$ 0	$ 0	$ 0

Share-based Compensation - Schedule of options fair value assumptions (Details) - $ / shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
2019 and 2020 Share Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Exercise price (USD)		$ 0.10
Fair value of the ordinary shares on the date of grant		$ 15.78
Expected term (in years)		10 years
Expected dividend yield		0.00%
2019 and 2020 Share Incentive Plan \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Fair value of the ordinary shares on the date of grant		$ 14.42
Risk-free interest rate		0.93%
Expected volatility		47.00%
2019 and 2020 Share Incentive Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Fair value of the ordinary shares on the date of grant		$ 17.35
Risk-free interest rate		1.48%
Expected volatility		48.00%
2021 Share Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Exercise price (USD)		$ 14.63
Fair value of the ordinary shares on the date of grant	$ 4.96	4.96
Fair value of the ordinary shares on the date of option grant (USD)		$ 10.67
Risk-free interest rate		1.59%
Expected term (in years)		10 years
Expected dividend yield		0.00%
Expected volatility		47.00%

Share-based Compensation - RSU activity (Details) - RSU - 2019 and 2020 Share Incentive Plan - $ / shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Number of Shares
Beginning Balance (in Shares)	8,586	0
Granted (in Shares)	36,199,400	8,586
Vested (in shares)	(127,062)
Forfeited (in Shares)	(4,522,600)	0
Ending Balance (in Shares)	31,558,324	8,586
Weighted Average Grant Date Fair Value
Beginning Balance	$ 17.25	$ 0
Granted	17.13	17.25
Vested	18.76
Forfeited	16.62	0
Ending Balance	$ 17.20	$ 17.25

Share-based Compensation - Additional Information (Details) $ / shares in Units, $ in Thousands	1 Months Ended			9 Months Ended		12 Months Ended
	Jul. 31, 2021 Vote $ / shares shares	Jul. 31, 2020 shares	Jul. 31, 2019	Sep. 30, 2022 USD ($) $ / shares shares	Sep. 30, 2021 $ / shares shares	Dec. 31, 2021 shares	May 31, 2021 $ / shares shares	Mar. 31, 2021 tranche $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award
Conversion Ratio, Class B to Class A Ordinary Shares	1
RSU
Share-based Compensation Arrangement by Share-based Payment Award
Options vested (in shares) \| shares				127,062
2019 Plan
Share-based Compensation Arrangement by Share-based Payment Award
Contractual term (in years)			10 years
Vesting period (in years)			5 years
Vesting percentage			20.00%
2019 Plan \| Class A Ordinary Shares
Share-based Compensation Arrangement by Share-based Payment Award
Maximum number of shares authorized \| shares				141,083,452
2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award
Contractual term (in years)		10 years
Vesting period (in years)		5 years
Vesting percentage		20.00%
2020 Plan \| Class A Ordinary Shares
Share-based Compensation Arrangement by Share-based Payment Award
Maximum number of shares authorized \| shares		165,696,625
2019 and 2020 Share Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award
Weighted average grant date fair value of options granted \| $ / shares					$ 15.78
Number of Options and Shares, Granted \| shares				0	36,987,700	0
Unrecognized compensation expenses \| $				$ 96,799
Weighted average period of unrecognized compensation cost				3 years 6 months 14 days
Number of vested and exercisable options (in shares) \| shares				46,825,570	45,896,638
Average exercise price (in USD per share) \| $ / shares				$ 0.10	$ 0.10
2019 and 2020 Share Incentive Plan \| RSU
Share-based Compensation Arrangement by Share-based Payment Award
Unrecognized compensation expenses \| $				$ 246,971
Weighted average period of unrecognized compensation cost				4 years 5 months 12 days
2019 and 2020 Share Incentive Plan \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Weighted average grant date fair value of options granted \| $ / shares					14.42
2019 and 2020 Share Incentive Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Weighted average grant date fair value of options granted \| $ / shares					17.35
2021 Share Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award
Weighted average grant date fair value of options granted \| $ / shares				$ 4.96	$ 4.96
Number of Options and Shares, Granted \| shares				0	108,557,400
Unrecognized compensation expenses \| $				$ 538,445
Exercise price per share \| $ / shares								$ 14.63
Exercise price per share ADS \| $ / shares								$ 29.26
Number of tranches								6
Number of option granted per tranche \| shares								18,092,900
Number of Votes \| Vote	10
2021 Share Incentive Plan \| Share-based Payment Arrangement, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award
Number of vehicle								500,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Vehicle Deliveries in Consecutive 12 months to vest								500,000
2021 Share Incentive Plan \| Share-based Payment Arrangement, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award
Number of vehicle								1,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Vehicle Deliveries in Consecutive 12 months to vest								1,000,000
2021 Share Incentive Plan \| Share-based Payment Arrangement, Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award
Number of vehicle								1,500,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Vehicle Deliveries in Consecutive 12 months to vest								1,500,000
2021 Share Incentive Plan \| Share-based Payment Arrangement, Tranche Four
Share-based Compensation Arrangement by Share-based Payment Award
Number of vehicle								2,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Vehicle Deliveries in Consecutive 12 months to vest								2,000,000
2021 Share Incentive Plan \| Share-based Payment Arrangement, Tranche Five
Share-based Compensation Arrangement by Share-based Payment Award
Number of vehicle								2,500,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Vehicle Deliveries in Consecutive 12 months to vest								2,500,000
2021 Share Incentive Plan \| Share-based Payment Arrangement, Tranche Six
Share-based Compensation Arrangement by Share-based Payment Award
Number of vehicle								3,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Vehicle Deliveries in Consecutive 12 months to vest								3,000,000
2021 Share Incentive Plan \| Class A Ordinary Shares
Share-based Compensation Arrangement by Share-based Payment Award
Number of Votes \| Vote	1
2021 Share Incentive Plan \| Class B Ordinary Shares \| Mr. Li Xiang
Share-based Compensation Arrangement by Share-based Payment Award
Maximum number of shares authorized \| shares	108,557,400						108,557,400	108,557,400
Exercise price per share \| $ / shares	$ 14.63						$ 14.63

Taxation (Details) - CNY (¥) ¥ in Thousands	1 Months Ended		9 Months Ended
Taxation (Details) - CNY (¥) ¥ in Thousands	Aug. 31, 2021	Apr. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Line Items]
Enterprise income tax rate (as a percent)			25.00%	25.00%
Percentage of consumption tax	3.00%		3.00%
Wheels Technology
Income Tax Disclosure [Line Items]
Statutory VAT rate for services (as a percent)			13.00%
Minimum percentage of VAT entitled in excess as a refund		3.00%
VAT refund received			¥ 207,924	¥ 0
Reduction in statutory VAT rate			50.00%
Cayman Islands
Income Tax Disclosure [Line Items]
Withholding income tax rate (as a percent)			0.00%
Hong Kong
Income Tax Disclosure [Line Items]
Enterprise income tax rate (as a percent)			16.50%
PRC
Income Tax Disclosure [Line Items]
Statutory VAT rate (as a percent)			13.00%
Withholding income tax rate (as a percent)			10.00%
Enterprise income tax rate (as a percent)			25.00%
Minimum percentage of ownership interests held by investors in Hong Kong to qualify for lower withholding tax rate (as a percent)			25.00%
Reduced withholding tax rate (as a percent)			5.00%
Total deduction available on qualified research and development expenses (as a percent)			150.00%
Additional deduction on qualified research and development expenses (as a percent)			175.00%
PRC \| High and New Technology Enterprises
Income Tax Disclosure [Line Items]
Preferential enterprise income tax rate (as a percent)			15.00%
Effective term			3 years

Taxation - Composition of income tax benefit (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)
Composition of income tax benefit
Current income tax expense	¥ 30,885		¥ 0
Deferred income tax expense/(benefit)	(61,056)	$ (8,583)	181,384
Income tax expense/(benefit)	¥ (30,171)	$ (4,241)	¥ 181,384

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Taxation - Reconciliations of income tax expenses (Details) ¥ in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)
Reconciliations of the income tax expenses
Loss before income tax expense	¥ (2,327,821)	$ (327,240)	¥ (435,582)
Income tax credit computed at PRC statutory income tax rate of 25%	(581,955)		(108,896)
Tax effect of tax-exempt entity and preferential tax rate	(320,294)		(58,380)
Tax effect of R&D deduction and others	(193,946)		(92,702)
Inventory write-downs and losses on inventory purchase commitments	200,700		12,814
Nondeductible expenses	397,904		58,775
Change in valuation allowance	467,420		369,773
Income tax expense/(benefit)	¥ (30,171)	$ (4,241)	¥ 181,384
PRC statutory tax rate (in percent)	25.00%	25.00%	25.00%

Fair Value Measurement - Assets and liabilities measured at fair value on a recurring basis (Details) - CNY (¥) ¥ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets
Equity securities with readily determinable fair value	¥ 23,207	¥ 28,452
Recurring
Assets
Short-term investments	14,487,344	19,157,428
Long-term financial investments	50,085
Equity securities with readily determinable fair value	23,207	28,452
Total assets	14,560,636	19,185,880
Recurring \| Level 1
Assets
Short-term investments	0	0
Long-term financial investments	0
Equity securities with readily determinable fair value	23,207	28,452
Total assets	23,207	28,452
Recurring \| Level 2
Assets
Short-term investments	14,487,344	19,157,428
Long-term financial investments	50,085
Equity securities with readily determinable fair value	0	0
Total assets	14,537,429	¥ 19,157,428
Recurring \| Level 3
Assets
Short-term investments	0
Long-term financial investments	0
Equity securities with readily determinable fair value	0
Total assets	¥ 0

Fair Value Measurement - Additional information (Details) - CNY (¥) ¥ in Thousands	9 Months Ended		12 Months Ended	21 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Sep. 30, 2022
Fair Value Measurement
Equity securities without readily determinable, fair value	¥ 508,730		¥ 93,150	¥ 508,730
Equity securities without readily determinable fair value, impairment charges	7,200	¥ 0
Equity method investments, impairment loss	0		¥ 0	¥ 0
Impairment loss of property, plant and equipment	0	27,388
Impairment loss of inventory write-downs	¥ 283,329	¥ 0

Commitments and Contingencies (Details) - CNY (¥) ¥ in Thousands	Sep. 30, 2022	Dec. 26, 2019
Capital commitments
Less than One Year	¥ 4,926,406
1-3 Years	440,719
3-5 Years	0
Over 5 Years	0
Total	5,367,125
Purchase obligations
Less than One Year	13,890,466
13 Years	0
35 Years	0
Over 5 Years	0
Total	¥ 13,890,466
Disposal by sale \| Chongqing Zhizao
Purchase obligations
Equity interest disposed		100.00%

Related Party Balances and Transactions - Significant related party transactions (Details) - CNY (¥) ¥ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Services \| Beijing Sankuai
Related Party Balances and Transactions
Purchases from related party	¥ 4,643	¥ 370
Services \| Hanhai
Related Party Balances and Transactions
Purchases from related party	572	0
Materials \| Changzhou Huixiang
Related Party Balances and Transactions
Purchases from related party	702	0
Materials \| Beijing Yihang
Related Party Balances and Transactions
Purchases from related party	73	31,564
R&D services \| Beijing Yihang
Related Party Balances and Transactions
Purchases from related party	281	11,274
R&D services \| Suzhou Yihang
Related Party Balances and Transactions
Purchases from related party	¥ 0	¥ 872

Related Party Balances and Transactions - Significant related party balances (Details) ¥ in Thousands, $ in Thousands	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Related Party Balances and Transactions
Due from related parties	¥ 1,051		¥ 1,012
Amounts due to related parties	7,307	$ 1,027	37,455
Neolix Technologies
Related Party Balances and Transactions
Due from related parties	678		678
Hanhai
Related Party Balances and Transactions
Due from related parties	373		0
Beijing Yihang
Related Party Balances and Transactions
Due from related parties	0		334
Amounts due to related parties	5,921		7,102
Changzhou Huixiang
Related Party Balances and Transactions
Amounts due to related parties	702		30,000
Beijing Sankuai
Related Party Balances and Transactions
Amounts due to related parties	661		330
Airx
Related Party Balances and Transactions
Amounts due to related parties	¥ 23		¥ 23

- Definition

The aggregate amount of receivables to be collected from related parties where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth, at the financial statement date. which are usually due within one year (or one business cycle).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

- Definition

Carrying amount as of the balance sheet date of obligations due all related parties. For classified balance sheets, represents the current portion of such liabilities (due within one year or within the normal operating cycle if longer).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details