0001104659-22-047043 | 20-F | XBRL Viewer

For the Year Ended December 31,

Deferred income tax (benefit)/expense

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Taxation (Details) ¥ in Thousands, $ in Thousands	1 Months Ended	12 Months Ended
Taxation (Details) ¥ in Thousands, $ in Thousands	Aug. 31, 2021	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Income Tax Disclosure [Line Items]
Enterprise income tax rate (as a percent)		25.00%	25.00%
Current and deferred income tax expense		¥ 168,643	$ 26,464	¥ (22,847)
Net operating loss carryforwards		5,624,288
Deferred tax assets, operating carryforwards, valuation allowance		1,083,508
Deferred tax assets, operating carryforwards, net of valuation allowance		36,151
Undistributed earnings of subsidiaries and variable interest entities		¥ 540,906		¥ 13,288
Percentage of consumption tax	3.00%	3.00%	3.00%
Payment of Consumption Tax		¥ 287,891
Cayman Islands
Income Tax Disclosure [Line Items]
Withholding income tax rate (as a percent)		0.00%	0.00%
Hong Kong
Income Tax Disclosure [Line Items]
Enterprise income tax rate (as a percent)		16.50%	16.50%
PRC
Income Tax Disclosure [Line Items]
Statutory VAT rate (as a percent)		13.00%	13.00%
Withholding income tax rate (as a percent)		10.00%	10.00%
Enterprise income tax rate (as a percent)		25.00%	25.00%	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%	25.00%
Reduced withholding tax rate (as a percent)		5.00%	5.00%
Total deduction available on qualified research and development expenses (as a percent)		150.00%	150.00%
Additional deduction on qualified research and development expenses (as a percent)		175.00%	175.00%
PRC \| High and New Technology Enterprises
Income Tax Disclosure [Line Items]
Preferential enterprise income tax rate (as a percent)		15.00%	15.00%
Effective term		3 years	3 years

Concentration and Risks (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
Concentration and Risks (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Concentration and Risks
Cash and cash equivalents, restricted cash and time deposits and short term investments subject to such government controls.	¥ 24,509,656	¥ 5,384,769
Percentage of appreciation of domestic currency (RMB) against foreign currency(US$)	2.30%	6.50%
Percentage of depreciation of peoples domestic currency (RMB) against foreign currency(US$)			1.60%

Share-based Compensation

12 Months Ended

Dec. 31, 2021

Share based Compensation

Share based Compensation

26. Share-based Compensation

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


	For the Year Ended December 31,
	2019	2020	2021
Cost of sales	—	1,515	26,713
Research and development expenses	—	60,789	741,793
Selling, general and administrative expenses	—	80,491	332,850
Total	—	142,795	1,101,356

26. Share-based Compensation (Continued)

(a)	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 of the Group to its employees, directors and consultants. As of December 31, 2021, 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 December 31, 2021, 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 and RSUs from 2021 under 2020 Plan. The contractual term is ten years from the grant date and the options and RSUs granted only have service condition. 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.

26. Share-based Compensation (Continued)

The following table summarizes activities of the Company’s share options and RSUs under the 2019 Plan and 2020 Plan for the years ended December 31, 2019, 2020 and 2021:


			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, 2018	51,640,000	0.10	7.57	41,312
Granted	3,430,000	0.10
Forfeited	(310,000)	0.10
Outstanding as of December 31, 2019	54,760,000	0.10	6.73	73,926
Granted	4,224,000	0.10
Forfeited	(2,070,000)	0.10
Outstanding as of December 31, 2020	56,914,000	0.10	5.95	814,724
Granted	36,996,286	0.10
Exercised	(6,404,416)	0.10
Forfeited	(4,106,000)	0.10
Outstanding as of December 31, 2021	83,399,870	0.10	7.66	1,330,228

Vested and expected to vest as of December 31, 2020	55,413,520	0.10	5.90	793,245
Exercisable as of December 31, 2020	40,410,000	0.10	5.34	578,469
Vested and expected to vest as of December 31, 2021	79,915,157	0.10	6.60	1,274,647
Exercisable as of December 31, 2021	40,251,584	0.10	4.55	642,013

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.

The weighted-average grant date fair value for options and RSUs granted under the Company’s 2019 Plan and 2020 Plan for the years ended December 31, 2019, 2020 and 2021 was US$0.99, US$1.71 and US$15.78, respectively, computed using the binomial option pricing model.

26. Share-based Compensation (Continued)

The fair value of each option granted under the Company’s 2019 Plan and 2020 Plan for the years ended December 31, 2019, 2020 and 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 Year Ended December 31,
	2019	2020	2021
Exercise price (US$)	0.10	0.10	0.10
Fair value of the ordinary shares on the date of option grant (US$)	0.90 - 1.45	1.35 - 1.90	14.42-17.35
Risk‑free interest rate	1.98% - 3.17%	0.69% - 1.92%	0.93% - 1.48%
Expected term (in years)	10.00	10.00	10.00
Expected dividend yield	0%	0%	0%
Expected volatility	47% - 48%	45% - 46%	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 December 31, 2021, there were US$250,946 of unrecognized compensation expenses related to the share options and RSUs granted to the Group’s employees, which are expected to be recognized over a weighted-average period of 4.28 years and may be adjusted for future changes in forfeitures.

(b)	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 immediately become vested upon grant on May 5, 2021. Mr. Li Xiang has 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 subject to certain 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.

26. Share-based Compensation (Continued)

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 listng 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 December 31, 2021, the Group did not recognized any compensation expenses for shares granted to Mr. Li Xiang, because the Group considers it is not probable that the performance-based vesting conditions will be satisfied as of December 31, 2021. Therefore, there were US$538,445 of unrecognized compensation expenses related to the restricted shares granted under 2021 Plan as of December 31, 2021.

The following table summarizes activities of the Company’s performance-based restricted shares under the 2021 Plan for the year ended December 31, 2021:


	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
December 31, 2021	108,557,400	14.63	9.19	—

The weighted-average grant date fair value for restricted shares granted under the Company’s 2021 Plan for the year ended December 31, 2021 was 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:


	For the Year Ended December 31,
	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.

Recent Accounting Pronouncements

12 Months Ended

Dec. 31, 2021

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 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 (Topic815): 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 Company adopted ASU No. 2020-01 from January 1, 2021, which did not have a material impact on the Company’s 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.

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+ Details

Parent Company Only Condensed Financial Information - Condensed balance sheets (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)
Current assets:
Cash and cash equivalents	¥ 27,854,224	$ 4,370,936	¥ 8,938,341
Time deposits and short-term investments	19,668,239	3,086,376	19,701,382
Prepayments and other current assets, net of allowance for credit losses of nil, and RMB2,192 as of December 31, 2020 and 2021, respectively	480,680	75,429	353,655
Total current assets	52,380,414	8,219,631	31,391,109
Non-current assets:
Investments in subsidiaries, VIEs and VIEs' subsidiaries	0
Long-term investments	156,306	24,528	162,853	¥ 126,181	¥ 177,141
Total non-current assets	9,468,499	1,485,812	4,982,167
Total assets	61,848,913	9,705,443	36,373,276
Current liabilities:
Accruals and other current liabilities	1,879,368	294,914	647,459
Total current liabilities	12,108,252	1,900,050	4,309,221
Noncurrent liabilities:
Long-term borrowings	5,960,899	935,395	511,638
Total non-current liabilities	8,676,359	1,361,508	2,260,458
Total liabilities	20,784,611	3,261,558	6,569,679
SHAREHOLDERS' DEFICIT
Treasury Shares	(89)	(14)
Additional paid-in capital	49,390,486	7,750,445	37,289,761
Accumulated other comprehensive loss	(1,521,871)	(238,815)	(1,005,184)
Accumulated deficit	(6,805,635)	(1,067,953)	(6,482,225)
Total shareholders' equity	41,064,302	6,443,885	29,803,597	(5,674,531)	(2,395,775)
Total liabilities and shareholders' equity	61,848,913	9,705,443	36,373,276
Class A Ordinary Shares
SHAREHOLDERS' DEFICIT
Class A/B Ordinary Shares	1,176	185	1,010
Class B Ordinary Shares
SHAREHOLDERS' DEFICIT
Class A/B Ordinary Shares	235	$ 37	235
Parent company \| Reportable legal entity
Current assets:
Cash and cash equivalents	14,762,875		1,149,374	¥ 641,007	¥ 641,007	¥ 45,341
Time deposits and short-term investments	7,020,662		14,486,070
Amounts due from subsidiaries of the Group	23,763,053		14,065,341
Prepayments and other current assets, net of allowance for credit losses of nil, and RMB2,192 as of December 31, 2020 and 2021, respectively	10,211
Total current assets	45,556,801		29,700,785
Non-current assets:
Investments in subsidiaries, VIEs and VIEs' subsidiaries	890,788		42,754
Long-term investments	28,452		64,916
Total non-current assets	919,240		107,670
Total assets	46,476,041		29,808,455
Current liabilities:
Accruals and other current liabilities	13,798		4,858
Total current liabilities	13,798		4,858
Noncurrent liabilities:
Long-term borrowings	5,397,941
Total non-current liabilities	5,397,941
Total liabilities	5,411,739		4,858
SHAREHOLDERS' DEFICIT
Treasury Shares	(89)
Additional paid-in capital	49,390,486		37,289,761
Accumulated other comprehensive loss	(1,521,871)		(1,005,184)
Accumulated deficit	(6,805,635)		(6,482,225)
Total shareholders' equity	41,064,302		29,803,597
Total liabilities and shareholders' equity	46,476,041		29,808,455
Parent company \| Reportable legal entity \| Class A Ordinary Shares
SHAREHOLDERS' DEFICIT
Class A/B Ordinary Shares	1,176		1,010
Parent company \| Reportable legal entity \| Class B Ordinary Shares
SHAREHOLDERS' DEFICIT
Class A/B Ordinary Shares	¥ 235		¥ 235

CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	¥ (321,455)	$ (50,442)	¥ (151,657)	¥ (2,438,536)
Net income/(loss) from discontinued operations, net of tax			(14,373)	20,662
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities:
Depreciation and amortization	590,397	92,646	320,996	116,391
Share-based compensation expenses	1,101,356	172,827	142,795
Foreign exchange (gain)/loss	46,593	7,311	3,710	(31,977)
Unrealized investment loss/(income)	13,797	2,165	(33,008)	13,221
Interest expense	60,628	9,514	65,249	83,667
Share of loss of equity method investees	83	13	2,520	162,725
Impairment loss related to property, plant and equipment and loss on inventory obsolescence	38,163	5,989	30,381	18,066
Allowance for credit losses	6,415	1,007	0	0
Changes in fair value of warrants and derivative liabilities			(272,327)	426,425
Deferred income tax, net	168,643	26,464	(22,847)
Loss on disposal of property, plant and equipment	19,843	3,114	379	602
Changes in operating assets and liabilities:
Prepayments and other current assets	(99,421)	(15,601)	459,301	(442,745)
Inventories	(611,557)	(95,967)	(516,867)	(510,546)
Operating lease rightofuse assets	(675,322)	(105,973)	(766,779)	(144,693)
Operating lease liabilities	695,940	109,208	817,149	153,415
Other non-current assets	(633,307)	(99,380)	1,656	8,512
Trade receivable	(5,459)	(857)	(107,246)	(8,303)
Deferred revenue	287,577	45,127	344,530	62,638
Trade and notes payable	6,213,265	974,995	2,530,350	602,276
Amounts due to related parties	(11,751)	(1,844)	9,442	4,017
Accruals and other current liabilities	932,119	146,270	131,111	116,349
Other noncurrent liabilities	523,838	82,202	165,191	5,519
Net cash (used in)/provided by continuing operating activities	8,340,385	1,308,788	3,139,656	(1,782,315)
Net cash (used in)/provided by discontinued operating activities			148	(11,395)
Net cash (used in)/provided by operating activities	8,340,385	1,308,788	3,139,804	(1,793,710)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment and intangible assets	(3,444,573)	(540,529)	(675,187)	(952,901)
Disposal of property, plant and equipment	38	6	535	1,648
Purchase of long-term investments			(65,000)	(98,000)
Placement of time deposits	(1,308,296)	(205,300)	(1,038,017)	(1,725,148)
Redemption of time deposits	1,630,773	255,904	601,968	1,265,877
Placement of short-term investments	(220,850,351)	(34,656,239)	(105,279,461)	(7,998,736)
Redemption of short-term investments	220,345,863	34,577,074	87,699,180	7,020,989
Loan to a supplier			(6,000)	(8,000)
Collection of loan principal from Lifan Holdings				490,000
Net cash used in continuing investing activities	(4,257,244)	(668,054)	(18,797,430)	(2,564,271)
Net cash (used in)/provided by discontinued investing activities			59,705	(10,565)
Net cash used in investing activities	(4,257,244)	(668,054)	(18,737,725)	(2,574,836)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	600,000	94,153		233,287
Repayment of short-term borrowings			(144,700)
Repayment of unsecured corporate loan	(429,692)	(67,428)
Proceeds from collection of receivables from holders of Series B2 convertible redeemable preferred shares				101,200
Payment of convertible redeemable preferred shares issuance costs				(3,791)
Proceeds from issuance of convertible debts	5,533,238	868,286		168,070
Proceeds from US IPO and concurrent private placements, net of issuance cost			11,034,685
Proceeds from HK IPO, net of issuance cost	11,004,778	1,726,889
Proceeds from exercise of share options	1,139	179
Proceeds from issuance of ordinary shares	70	11
Proceeds from follow-on offering, net of issuance cost			9,990,955
Net cash provided by continuing financing activities	16,709,533	2,622,090	24,710,697	5,655,690
Net cash provided by financing activities	16,709,533	2,622,090	24,710,697	5,655,690
Effects of exchange rate changes on cash, cash equivalents and restricted cash	(472,129)	(74,086)	(376,646)	53,722
Net increase in cash, cash equivalents and restricted cash	20,320,545	3,188,738	8,736,130	1,340,866
Cash, cash equivalents and restricted cash at beginning of the year	10,172,519	1,596,290	1,436,389	95,523
Cash, cash equivalents and restricted cash at end of the year	30,493,064	4,785,028	10,172,519	1,436,389
Supplemental schedule of noncash investing and financing activities
Payable related to acquisition of Chongqing Zhizao	(2,000)	(314)	(79,552)	(115,000)
Payable related to purchase of property, plant and equipment	(456,395)	(71,618)	(118,181)	(403,761)
Payables for issuance costs				(20,929)
Changzhou Chehejin
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid related to acquisition, net of cash acquired	(563,118)	(88,365)
Chongqing Zhizao
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid related to acquisition, net of cash acquired	¥ (67,580)	$ (10,605)	(35,448)	(560,000)
Series B3 convertible redeemable preferred shares
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible redeemable preferred shares				1,530,000
Series C Convertible Redeemable Preferred Shares
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible redeemable preferred shares				¥ 3,626,924
Series D Convertible Redeemable Preferred Shares
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible redeemable preferred shares			¥ 3,829,757

Deferred Revenue

12 Months Ended

Dec. 31, 2021

Deferred Revenue

Deferred Revenue

19. Deferred Revenue

The following table shows a reconciliation in the current reporting period related to carried-forward deferred revenue.


	For the Year Ended December 31,
	2019	2020	2021
Deferred revenue—at beginning of the year	—	62,638	407,168
Additions	338,702	9,687,382	27,377,563
Recognition	(276,064)	(9,342,852)	(27,089,986)
Deferred revenue—at end of the year	62,638	407,168	694,745
Including: Deferred revenue, current	56,695	271,510	305,092
Deferred revenue, non‑current	5,943	135,658	389,653

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

The Group expects that RMB305,092 of the transaction price allocated to unsatisfied performance obligation as of December 31, 2021 will be recognized as revenue during the period from January 1, 2022 to December 31, 2022. The remaining RMB389,653 will be recognized in 2023 and thereafter.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies.

Commitments and Contingencies

29. 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 consolidated financial statements as of December 31, 2021 were as follows:


	Total	Less than One Year	1‑3 Years	3‑5 Years	Over 5 Years
Capital commitments	2,920,561	2,798,736	121,825	—	—

29. Commitments and Contingencies (Continued)

(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 consolidated financial statements as of December 31, 2021 were as follows:


	Total	Less than One Year	1‑3 Years	3‑5 Years	Over 5 Years
Purchase obligations	11,798,199	11,798,199	—	—	—

(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 Company’s acquisition of Chongqing Zhizao in December 2018. Most of these legal proceedings were still at preliminary stages, and the Company 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 Company assumed from Lifan Acquisition and included as the Retained Assets and Liabilities, the Company 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, 2020 and 2021. In addition to the indemnification of the Retained Assets and Liabilities the Company 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 Company’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 (Note 5), 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, 2020 and 2021.

Related Party Balances and Transactions (Tables)

12 Months Ended

Dec. 31, 2021

The principal related parties with which the Group had transactions during the years 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

30. Related Party Balances and Transactions (Continued)

The Group entered into the following significant related party transactions:


	For the Year Ended December 31,
	2019	2020	2021
Purchase materials from Beijing Yihang	6,914	58,361	31,692
Purchase R&D service from Beijing Yihang	25,106	4,368	12,176
Purchase R&D service from Suzhou Yihang	—	—	3,772
Purchase service from Beijing Sankuai	—	—	969
Purchase equipment and installation service from Airx	1,994	—	—
Sales of battery packs and materials to Neolix Technologies	1,943	—	—

The Group had the following significant related party balances:


	As of December 31,
	2020	2021
Due from Neolix Technologies	678	678
Due from Beijing Yihang	—	334
Total	678	1,012


	As of December 31,
	2020	2021
Due to Changzhou Huixiang (See Note 13)	—	30,000
Due to Beijing Yihang	19,183	7,102
Due to Beijing Sankuai	—	330
Due to Airx	23	23
Total	19,206	37,455

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies.

Schedule of capital commitments


	Total	Less than One Year	1‑3 Years	3‑5 Years	Over 5 Years
Capital commitments	2,920,561	2,798,736	121,825	—	—

Schedule of purchase obligations


	Total	Less than One Year	1‑3 Years	3‑5 Years	Over 5 Years
Purchase obligations	11,798,199	11,798,199	—	—	—

Organization and Nature of Operations

12 Months Ended

Dec. 31, 2021

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 consolidated variable interest entities (the “VIEs”) and 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 Reorganization

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 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 consolidated balance sheets, the consolidated statements of changes in shareholders’ (deficit)/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 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 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 are described 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 consolidated affiliated entities. The 2021 Reorganization mainly involved changing certain consolidated affiliated entities controlled through contractual arrangements 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, the certain new contractual arrangements were entered into to replace the original contractual arrangements in place before the completion of 2021 Reorganization.

The transactions of 2021 Reorganization was accounted for a common control transaction within the Group. The financial information of the Group at the consolidation level does not have a material impact accordingly.

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

1. Organization and Nature of Operations (Continued)

As of December 31, 2021, the Company’s principal subsidiaries, consolidated VIEs and 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)
Jiangsu CHJ Automobile Co., Ltd. (“Jiangsu CHJ”)	100	%	June 23, 2016	Changzhou, PRC	Purchase of manufacturing equipment	(i)
Lixiang Zhizao Automobile Sales & Services (Beijing) Co., Ltd	100	%	July 13, 2018	Beijing, PRC	Sales and after sales management	(i)
Lixiang Zhixing Automobile Sales & Services (Shanghai) Co., Ltd	100	%	April 12, 2019	Shanghai, PRC	Sales and after sales management	(i)
Lixiang Zhizao Automobile Sales & Services (Chengdu) Co., Ltd	100	%	July 9, 2018	Chengdu, PRC	Sales and after sales management	(i)

			Date of Incorporation	Place of Incorporation	Principal Activities	Notes
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

VIEs’ subsidiary
Chongqing Lixiang Automobile Co., Ltd. (“Chongqing Lixiang Automobile”)			October 11, 2019	Chongqing, PRC	Manufacturing of automobile	(ii)

Notes:

(i)	All the subsidiaries were VIE’s subsidiaries before the 2021 Reorganization.

(ii)	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 Beijing CHJ.

1. Organization and Nature of Operations (Continued)

(c)Variable interest entity

The Company’s subsidiary Wheels Technology has entered into contractual arrangements with Beijing CHJ, Xindian Information (collectively the “VIEs”) and their respective shareholders, through which, the Company exercises control over the operations of the VIEs and receives substantially all of their economic benefits and residual returns.

The following is a summary of the contractual arrangements by and among Wheels Technology, the VIEs, and their respective shareholders.

Powers of Attorney and Business Operation Agreement.

Each shareholder of Beijing CHJ signed a power of attorney to irrevocably authorize Wheels Technology to act as his or her attorney in-fact to exercise all of his or her rights as a shareholder of Beijing CHJ, including the right to convene shareholder meetings, the right to vote and sign any resolution as a shareholder, the right to appoint directors, supervisors, and officers, and the right to sell, transfer, pledge, and dispose of all or a portion of the equity interest held by such shareholder. These powers of attorney will remain in force for 10 years. Upon request by Wheels Technology, each shareholder of Beijing CHJ shall extend the term of its authorization prior to its expiration.

Pursuant to the Business Operation Agreements entered into in April 2021 by and among Wheels Technology, Xindian Information, and each of the shareholders of Xindian Information, Xindian Information will not take any action that may have a material adverse effect on its assets, businesses, human resources, rights, obligations, or business operations without prior written consent of Wheels Technology. Xindian Information and its shareholders further agreed to accept and strictly follow Wheels Technology’s instructions relating to Xindian Information’s daily operations, financial management, and election of directors appointed by Wheels Technology. The shareholders of Xindian Information agree to transfer any dividends or any other income or interests they receive as the shareholders of Xindian Information immediately and unconditionally to Wheels Technology. Unless Wheels Technology terminates this agreement in advance, this agreement will remain effective for 10 years and can be renewed upon request by Wheels Technology prior to its expiration. Xindian Information and its shareholders have no right to terminate this agreement unilaterally. Pursuant to the Business Operation Agreement, each shareholder of Xindian Information has executed a power of attorney to irrevocably authorize Wheels Technology to act as his or her attorney-in-fact to exercise all of his or her rights as a shareholder of Xindian Information. The terms of these powers of attorney are substantially similar to the powers of attorney executed by the shareholders of Beijing CHJ described above.

Spousal Consent Letters.

Spouses of nine shareholders of Beijing CHJ, who collectively hold 100% of equity interests in Beijing CHJ, have each signed a spousal consent letter. Each signing spouse of the relevant shareholder acknowledges that the equity interests in Beijing CHJ held by the relevant shareholder of Beijing CHJ are the personal assets of that shareholder and not jointly owned by the married couple. Each signing spouse also has unconditionally and irrevocably disclaimed his or her rights to the relevant equity interests and any associated economic rights or interests to which he or she may be entitled pursuant to applicable laws, and has undertaken not to make any assertion of rights to such equity interests and the underlying assets. Each signing spouse has agreed and undertaken that he or she will not carry out in any circumstances any conducts that are contradictory to the contractual arrangements and the spousal consent letter.

Spouses of nine shareholders of Xindian Information, who collectively hold 98.1% equity interests in Xindian Information, have each signed a spousal consent letter, which includes terms substantially similar to the spousal consent letter relating to Beijing CHJ described above.

1. Organization and Nature of Operations (Continued)

Exclusive Consultation and Service Agreements.

Pursuant to the Exclusive Consultation and Service Agreement entered into in April 2021 by and between Wheels Technology and Beijing CHJ, Wheels Technology has the exclusive right to provide Beijing CHJ with software technology development, technology consulting, and technical services required by Beijing CHJ’s business. Without Wheels Technology’s prior written consent, Beijing CHJ cannot accept any same or similar services subject to this agreement from any third party. Beijing CHJ agrees to pay Wheels Technology an annual service fee at an amount that is equal to 100% of its quarterly net income, after making up losses from previous years, or an amount that is adjusted in accordance with Wheels Technology’s sole discretion for the relevant quarter and also the mutually agreed amount for certain other technical services, both of which should be paid within 10 days after Wheels Technology sends invoice within 30 days after the end of the relevant calendar quarter. Wheels Technology has exclusive ownership of all the intellectual property rights created as a result of the performance of the Exclusive Consultation and Service Agreement, to the extent permitted by applicable PRC laws. To guarantee Beijing CHJ’s performance of its obligations thereunder, the shareholders have agreed to pledge their equity interests in Beijing CHJ to Wheels Technology pursuant to the Equity Pledge Agreement. The Exclusive Consultation and Service Agreement will remain effective for 10 years, unless otherwise terminated by Wheels Technology. Upon request by Wheels Technology, the term of this agreement can be renewed prior to its expiration.

In April 2021, Wheels Technology, Xindian Information, and each of the shareholders of Xindian Information entered into an exclusive consultation and service agreement, which includes terms substantially similar to the Exclusive Consultation and Service Agreement relating to Beijing CHJ described above.

Equity Option Agreements.

Pursuant to the Equity Option Agreement entered into in April 2021 by and among Wheels Technology, Beijing CHJ, and each of the shareholders of Beijing CHJ, the shareholders of Beijing CHJ have irrevocably granted Wheels Technology an exclusive option to purchase all or part of their equity interests in Beijing CHJ, and Beijing CHJ has irrevocably granted Wheels Technology an exclusive option to purchase all or part of its assets. Wheels Technology or its designated person may exercise such options to purchase equity interests at the lower of the amount of their respective paid-in capital in Beijing CHJ and the lowest price permitted under applicable PRC laws. Wheels Technology or its designated person may exercise the options to purchase assets at the lowest price permitted under applicable PRC laws. The shareholders of Beijing CHJ have undertaken that, without Wheels Technology’s prior written consent, they will not, among other things, (i) transfer or otherwise dispose of their equity interests in Beijing CHJ, (ii) create any pledge or encumbrance on their equity interests in Beijing CHJ, (iii) change Beijing CHJ’s registered capital, (iv) merge Beijing CHJ with any other entity, (v) dispose of Beijing CHJ’s material assets (except in the ordinary course of business), or (vi) amend Beijing CHJ’s articles of association. The Exclusive Option Agreement will remain effective for 10 years and can be renewed upon request by Wheels Technology.

In April 2021, Wheels Technology, Xindian Information, and each of the shareholders of Xindian Information entered into an equity option agreement, which includes terms substantially similar to the equity option agreement relating to Beijing CHJ described above.

Equity Pledge Agreements.

Pursuant to the Equity Pledge Agreement entered into in April 2021 by and between Wheels Technology and the shareholders of Beijing CHJ, the shareholders of Beijing CHJ have agreed to pledge 100% of equity interests in Beijing CHJ to Wheels Technology to guarantee the performance by the shareholders of their obligations under the Exclusive Option Agreement and the Powers of Attorney, as well as the performance by Beijing CHJ of its obligations under the Exclusive Option Agreement, the Powers of Attorney, and payment of services fees to Wheels Technology under the Exclusive Consultation and Service Agreement. In the event of a breach by Beijing CHJ or any shareholder of contractual obligations under the Equity Pledge Agreement, Wheels Technology, as pledgee, will have the right to dispose of the pledged equity interests in Beijing CHJ and will have priority in receiving the proceeds from such disposal. The shareholders of Beijing CHJ also have undertaken that, without prior written consent of Wheels Technology, they will not dispose of, create, or allow any encumbrance on the pledged equity interests.

1. Organization and Nature of Operations (Continued)

In April 2021, Wheels Technology, Xindian Information, and each of the shareholders of Xindian Information entered into an Equity Pledge Agreement, which includes terms substantially similar to the Equity Pledge Agreement relating to Beijing CHJ described above.

The registration of the equity pledge relating to Beijing CHJ and Xindian Information with the competent office of the SAMR in accordance with the PRC Property Law has been completed.

(d)Risks in relations to the VIE structure

According to the Guidance Catalogue of Industries for Foreign Investment promulgated in 2017, or the Catalogue, foreign ownership of certain areas of businesses are subject to restrictions under current PRC laws and regulations. Pursuant to the 2021 Negative List, foreign investors are not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider (excluding e-commerce, domestic multiparty communications, store-and-forward, and call centers). In addition, foreign investors are prohibited from investing in companies engaging in internet culture businesses (except for music) and radio and television program production businesses.

Part of the Group’s business is conducted through the VIEs of the Group, of which the Company is the ultimate primary beneficiary. In the opinion of the management, the contractual arrangements with the VIEs and the nominee shareholders are in compliance with PRC laws and regulations and are legally binding and enforceable. The nominee shareholders indicate they will not act contrary to the contractual arrangements. However, there are substantial uncertainties regarding the interpretation and application of the PRC laws and regulations including those that govern the contractual arrangements, which could limit the Group’s ability to enforce these contractual arrangements and if the nominee shareholders of the VIEs were to reduce their interests in the Group, their interest may diverge from that of the Group and that may potentially increase the risk that they would seek to act contrary to the contractual arrangements.

It is possible that the Group’s operations of certain of its businesses through the VIEs could be found by the PRC authorities to be in violation of the PRC laws and regulations prohibiting or restricting foreign ownership of companies that engage in such operations and businesses. While the Group’s management considers the possibility of such a finding by PRC regulatory authorities under current PRC law and regulations to be remote, on March 15, 2019, the National People’s Congress adopted the Foreign Investment Law of the PRC, which came into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law, and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The Foreign Investment Law of the PRC embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation. For example, the Foreign Investment Law of the PRC adds a catch-all clause to the definition of “foreign investment” so that foreign investment, by its definition, includes “investments made by foreign investors in China through other means defined by other laws or administrative regulations or provisions promulgated by the State Council” without further elaboration on the meaning of “other means”. It leaves leeway for the future legislations promulgated by the State Council to provide for contractual arrangements as a form of foreign investment. It is therefore uncertain whether the Group’s corporate structure will be seen as violating the foreign investment rules as the Group are currently leveraging the contractual arrangements to operate certain businesses in which foreign investors are prohibited from or restricted to investing. Furthermore, if future legislations prescribed by the State Council mandate further actions to be taken by companies with respect to existing contractual arrangement, the Group may face substantial uncertainties as to whether the Group can complete such actions in a timely manner, or at all. If the Group fail to take appropriate and timely measures to comply with any of these or similar regulatory compliance requirements, the Group’s current corporate structure, corporate governance and business operations could be materially and adversely affected.

1. Organization and Nature of Operations (Continued)

If the Company’s ownership structure, contractual arrangements, and businesses of the Company’s PRC subsidiaries or VIEs are found to be in violation of any existing or future PRC laws or regulations, or PRC subsidiaries or VIEs fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including:

●

revoke the business licenses and/or operating licenses of such entities;

●

shut down our servers or blocking the website or mobile application, or discontinue or place restrictions or onerous conditions on the Group’s operation through any transactions between the PRC subsidiaries and the VIEs;

●

impose fines, confiscate the income from the PRC subsidiaries or the VIEs, or imposing other requirements with which the VIEs may not be able to comply;

●

require the Group to restructure the ownership structure or operations, including terminating the contractual arrangements with the VIEs and deregistering the equity pledges of the VIEs, which in turn would affect the Group’s ability to consolidate, derive economic interests from, or exert effective control over the VIEs;

●

restrict or prohibit the Group’s use of the proceeds of this offering to finance the Group’s business and operations in China; or

●

take other regulatory or enforcement actions that could be harmful to the Group’s business.

The imposition of any of these penalties may result in a material and adverse effect on the Group’s ability to conduct the Group’s businesses. In addition, if the imposition of any of these penalties causes the Group to lose the right to direct the activities of any of the VIEs (through its equity interests in its subsidiaries) or the right to receive their economic benefits, the Group will no longer be able to consolidate the relevant VIEs and its subsidiaries, if any. In the opinion of management, the likelihood of loss in respect of the Group’s current ownership structure or the contractual arrangements with its VIEs is remote. The Group’s operations depend on the VIEs and their nominee shareholders to honor their contractual arrangements with the Group. These contractual arrangements are governed by PRC law and disputes arising out of these agreements are expected to be decided by arbitration in the PRC. The management believes that each of the contractual arrangements constitutes valid and legally binding obligations of each party to such contractual arrangements under the PRC laws. However, the interpretation and implementation of the laws and regulations in the PRC and their application on the legality, binding effect and enforceability of contracts are subject to the discretion of competent PRC authorities, and therefore there is no assurance that relevant PRC authorities will take the same position as the Group herein in respect of the legality, binding effect and enforceability of each of the contractual arrangements. Meanwhile, since the PRC legal system continues to evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to the Group to enforce the contractual arrangements should the VIEs or the nominee shareholders of the VIEs fail to perform their obligations under those arrangements. The enforceability, and therefore the benefits, of the contractual agreements between the Company and the VIE depend on nominee shareholders enforcing the contracts. There is a risk that nominee shareholders of the VIEs, who in some cases are also shareholders of the Company, may have conflicts of interest with the Company in the future or fails to perform their contractual obligations. Given the significance and importance of the VIEs, there would be a significant negative impact to the Company if these contracts were not enforced.

The Group’s operations depend on the VIEs to honour their contractual agreements with the Group and the Company’s ability to control the VIEs also depends on the authorization by the shareholders of the VIEs to exercise voting rights on all matters requiring shareholder approval in the VIEs. The Company believes that the agreements on authorization to exercise shareholder’s voting power are legally enforceable and the possibility that it will no longer be able to control and consolidate the VIEs as a result of the aforementioned risks and uncertainties is remote.

1. Organization and Nature of Operations (Continued)

The following consolidated financial information of the Group’s VIEs and VIEs’ subsidiaries as of December 31, 2020 and 2021 and for the years ended December 31, 2019, 2020 and 2021 were included in the accompanying Group’s consolidated financial statements as follows:


	As of December 31,
	2020	2021
	RMB	RMB
Current assets:
Cash and cash equivalents	1,546,193	5,311,800
Restricted cash	1,234,178	2,415,941
Time deposits and short-term investments	2,581,690	8,326,541
Trade receivable	103,271	103,056
Amounts due from the Group companies	7,704,630	23,402,104
Inventories	271,379	1,396,992
Prepayments and other current assets	254,061	220,402
Non‑current assets:
Investment in subsidiaries	609,748	—
Long‑term investments	97,937	97,854
Property, plant and equipment, net	2,335,824	2,329,507
Operating lease right‑of‑use assets, net	1,182,134	731,874
Intangible assets, net	682,083	703,274
Other non‑current assets	218,531	1,107,674
Total assets	18,821,659	46,147,019
Current liabilities:
Short‑term borrowings	—	31,547
Trade and notes payable	3,107,646	8,547,181
Amounts due to the Group companies	12,203,705	31,999,140
Amounts due to related parties	19,206	1,277
Operating lease liabilities, current	170,033	80,606
Deferred revenue, current	230,720	—
Accruals and other current liabilities	453,731	515,036
Non‑current liabilities:
Long-term borrowings	511,638	479,453
Deferred revenue, non‑current	102,898	8,704
Operating lease liabilities, non‑current	973,455	719,628
Finance lease liabilities, non‑current	366,883	—
Deferred tax liabilities, non-current	36,309	153,723
Other non‑current liabilities	157,907	14,333
Total liabilities	18,334,131	42,550,628
Total shareholders’ equity	487,528	3,596,391
Total liabilities and shareholders’ equity	18,821,659	46,147,019

These balances have been reflected in the Group’s consolidated financial statements with intercompany transactions eliminated.

1. Organization and Nature of Operations (Continued)


	For the Year Ended December 31,
	2019	2020	2021

Third-party revenues	284,367	8,001,067	6,294,675
Inter-company revenues	974,313	8,553,798	22,287,788

Third-party cost	(284,462)	(7,790,586)	(20,171,861)
Inter-company cost	(352,672)	(7,877,944)	(5,891,611)

Third-party expenses	(1,675,643)	(1,358,507)	(2,401,187)
Inter-company expenses	—	(25,858)	(65,750)

Share of loss from subsidiaries	(5,783)	(1,179)	(13)
Other (expense)/income	(174,403)	40,309	2,610,121
(Loss)/Income before income tax expenses	(1,234,283)	(458,900)	2,662,162
Less: income tax expenses	—	(36,309)	(117,413)
Net (loss)/income from continuing operations	(1,234,283)	(495,209)	2,544,749
Net (loss)/income from discontinued operations	(20,662)	14,373	—
Net (loss)/income	(1,254,945)	(480,836)	2,544,749
Less: Net (loss)/income attributable to non-controlling interests	(5,971)	5,075	—
Net (loss)/income attributable to ordinary shareholders of Li Auto Inc.	(1,260,916)	(475,761)	2,544,749


	For the Year Ended December 31,
	2019	2020	2021
Net cash provided by inter-company transactions	—	2,194,342	7,341,282
Net cash (used in)/provided by other transactions	(1,607,435)	1,346,069	(8,693,141)
Net cash (used in)/provided by operating activities	(1,607,435)	3,540,411	(1,351,859)

Inter-company loan financing to Group companies	—	—	—
Other investing activities with external entities	(1,976,964)	(1,665,982)	(8,641,045)
Net cash used in investing activities	(1,976,964)	(1,665,982)	(8,641,045)

Inter-company loan financing from Group companies	3,782,378	795,295	14,858,966
Other financing activities with external entities	—	(144,700)	81,308
Net cash provided by financing activities	3,782,378	650,595	14,940,274
Effects of exchange rate changes on cash, cash equivalents and restricted cash	19,746	(188)	—
Net increase in cash, cash equivalents and restricted cash	217,725	2,524,836	4,947,370
Cash, cash equivalents and restricted cash at beginning of the year	37,810	255,535	2,780,371
Cash, cash equivalents and restricted cash at end of the year	255,535	2,780,371	7,727,741
Less: Cash, cash equivalents and restricted cash of discontinued operations at end of the year	147	—	—
Cash, cash equivalents and restricted cash of continuing operations at end of the year	255,388	2,780,371	7,727,741

The Company’s involvement with the VIEs is through the contractual arrangements disclosed in Note 1(c). All recognized assets held by the VIEs are disclosed in the table above.

1. Organization and Nature of Operations (Continued)

In accordance with the contractual arrangements between Wheels Technology, the VIEs and the VIEs’ shareholders, Wheels Technology has the power to direct activities of the Group’s consolidated VIEs and VIEs’ subsidiaries and can have assets transferred out of the Group’s consolidated VIEs and VIEs’ subsidiaries. Therefore, it is considered that there is no asset in the Group’s consolidated VIEs and VIEs’ subsidiaries that can be used only to settle their obligations except for registered capitals and PRC statutory reserves of the Group’s consolidated VIEs amounting to RMB7,930,831 and RMB7,103,472 as of December 31, 2020 and 2021, respectively. As the Group’s consolidated VIEs and VIEs’ subsidiaries are incorporated as limited liability companies under the PRC Company Law, the creditors do not have recourse to the general credit of Wheels Technology for all the liabilities of the Group’s consolidated VIEs and VIEs’ subsidiaries. The accumulated deficit of the Group’s consolidated VIEs and VIEs’ subsidiaries was RMB3,772,758 and RMB1,229,463 as of December 31, 2020 and 2021, respectively. For the years ended December 31, 2019, 2020 and 2021, no management fees were paid by VIEs to the WOFEs as each of the VIEs was in accumulated deficit as of December 31, 2021 (pursuant to each management fee arrangement with the VIEs).

Currently there is no contractual arrangement that could require the Company, Wheels Technology or other subsidiaries of the Company to provide additional financial support to the Group’s consolidated VIEs and VIEs’ subsidiaries. As the Company is conducting certain businesses in the PRC through the consolidated VIEs and VIEs’ subsidiaries, the Company may provide additional financial support on a discretionary basis in the future, which could expose the Group to a loss. The amount due to/from the Company and its subsidiaries represents the balances arising from inter-company sales of vehicles and intangible assets and inter-company loan financings.

(e)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.

1. Organization and Nature of Operations (Continued)

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.

Leases (Tables)

12 Months Ended

Dec. 31, 2021

Leases

Schedule of components of lease expenses


	For the Year Ended December 31,
	2019	2020	2021
Lease cost
Finance lease cost:
Amortization of assets	15,501	15,346	12,122
Interest of lease liabilities	19,943	21,851	19,322
Operating lease cost	86,365	176,788	367,375
Short‑term lease cost	6,801	4,937	15,559
Total	128,610	218,922	414,378

Supplemental cash flows information related to leases


	For the Year Ended December 31,
	2019	2020	2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows payments for operating leases	77,643	126,418	346,757
Right-of-use assets obtained in exchange for lease liabilities:
Right-of-use assets obtained in exchange for new operating lease liabilities	207,902	896,804	1,120,392

Supplemental balance sheet information related to operating leases


	As of December 31,
	2020	2021
Operating Leases
Land use rights, net ^{(i, ii)}	181,505	289,810
Operating lease right-of-use assets, net (excluding land use rights)	1,095,501	1,771,682
Total operating lease assets	1,277,006	2,061,492
Operating lease liabilities, current	210,531	473,245
Operating lease liabilities, non-current	1,025,253	1,369,825
Total operating lease liabilities	1,235,784	1,843,070

i) Changzhou Manufacturing Base—Phase I

The Group entered into a lease contract with the Developer to lease the Phase I Land and Plants from May 1, 2017 to December 31, 2020, and further obtained an option to purchase the Phase I Plant and underlying land use right at the construction cost before the end of lease term.

Given the indefinite life of the land, the lease of the Phase I Land or a purchased land use right can only be classified as an operating lease. As the Company has an option to purchase the Phase I Plants at cost and the assets are designed for the use of the Company, so the option is reasonably certain to be exercised, and accordingly, the lease of the Phase I Plants was classified as a financing lease and recognized as property, plant and equipment of the Group. Hence, on the lease commerce date, the right of use assets for the Phase I Land and Plants were recorded with the amount of RMB70,508 and RMB310,018 respectively, being the present value of the lease payment and the exercise price of the purchase option. The initial direct cost, and lease payment made on or before the lease commerce date, and the incentive received prior to the lease commerce date were immaterial.

11. Leases (Continued)

ii) Changzhou Manufacturing Base—Phase II

In September 2018, the Group and the Developer further entered into lease agreements for the Group to purchase the land use right of Phase II Land from the Developer to use and construct on Phase II Land. The lease term is from September 11, 2018 to March 14, 2067. The purchased land use right of the Phase II Land was also classified as an operating lease, for which total rental in the amount of RMB24,420 has been fully paid upfront in 2018. The right of use assets for the Phase II Land was RMB23,080 exclusive VAT.

The Group then constructed another manufacturing plant (the “Phase II Plants”) located on the Phase II Land with the total amount of the construction of RMB102,251. Construction of the Manufacturing Phase II was completed on January 1, 2019.

In August 2019, the Group entered into an asset transfer agreement to sell the Manufacturing Base-Phase II (including the Phase II Land use right and the Phase II Plants) to the Developer with the total consideration of RMB103,060, including VAT. Immediately after the transfer, the Group enter into a lease agreement with the developer to lease back the Manufacturing Base-Phase II for the period starting from September 1, 2019 (the actual lease commencement date is the date of change of ownership) to December 31, 2020, and further obtain an option to repurchase the Phase II Land use right and Plants with the amount of RMB103,060 prior to December 31, 2020.

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 Company, so 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 sale accounting, and was accounted for as a financing transaction. As of December 31, 2019, the Group has fully received the consideration from the third-party Developer and recorded as the short-term borrowing in the consolidated balance sheets.

Supplemental balance sheet information related to finance leases


	As of December 31,
	2020	2021
Finance Leases
Property, plant and equipment, at cost ^{(i, iv)}	294,269	—
Accumulated depreciation	(56,682)	—
Property, plant and equipment, net	237,587	—
Finance lease liabilities, non-current	366,883	—
Total finance leases liabilities	366,883	—

i) Changzhou Manufacturing Base—Phase I

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

In November 2021, Jiangsu CHJ, as a subsidary of the Group, entered into an equity transfer agreement to acquire 100% equity interests of 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 RMB565,500 was paid as of December 31, 2021, and RMB28,491 was settled in January 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 susbstantive processes acquired to siginificantly contribute to the ability to creat the output. No system, standard, protocol, convention, or rule that can create or has the ability to contribute to the creation of outputs were obtained by Jiangsu CHJ. Therefore, this transaction is determined to be an asset acquisition as no sufficient inputs and processes were acquired to produce outputs.

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.

Schedule of weighted-average remaining lease term and discount rate


	As of December 31,
	2020		2021
Weighted-average remaining lease term
Land use rights	47 years		47 years
Operating leases	11 years		8 years
Finance leases	16 years		—
Weighted-average discount rate
Land use rights	6.2	%	—
Operating leases	5.8	%	5.8	%
Finance leases	6.2	%	—

Schedule of maturities of finance lease liabilities


	As of December 31, 2021
	Operating leases	Finance leases
2021	—	—
2022	473,477	—
2023	372,077	—
2024	242,358	—
2025	178,605	—
2026	155,296	—
Thereafter	953,835	—
Total undiscounted lease payments	2,375,648	—
Less: imputed interest	(532,578)	—
Total lease liabilities	1,843,070	—

Schedule of maturities of operating lease liabilities


	As of December 31, 2021
	Operating leases	Finance leases
2021	—	—
2022	473,477	—
2023	372,077	—
2024	242,358	—
2025	178,605	—
2026	155,296	—
Thereafter	953,835	—
Total undiscounted lease payments	2,375,648	—
Less: imputed interest	(532,578)	—
Total lease liabilities	1,843,070	—

Acquisition of Chongqing Zhizao (Details) ¥ in Thousands			12 Months Ended
Acquisition of Chongqing Zhizao (Details) ¥ in Thousands	Dec. 29, 2018 CNY (¥)	Dec. 28, 2018 subsidiary	Dec. 31, 2021 CNY (¥)
Business acquisition
Number of wholly owned subsidiaries with whom acquisition agreement is entered into \| subsidiary		2
Chongqing Zhizao
Business acquisition
Equity interest (as a percent)		100.00%
Total consideration	¥ 650,000
Total consideration in cash paid			¥ 648,000
Settled with outstanding loan receivable			¥ 8,000

Fair Value Measurement

12 Months Ended

Dec. 31, 2021

Fair Value Measurement

Fair Value Measurement

28. 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, 2020 and 2021.


		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
	2020	(Level 1)	(Level 2)	(Level 3)
Assets
Short-term investments	18,850,462	—	18,850,462	—
Equity securities with readily determinable fair value	64,916	64,916	—	—
Total assets	18,915,378	64,916	18,850,462	—


		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	—

Valuation Techniques

Short-term investments: Short-term investments are investments in financial instruments with variable interest rates and maturity dates within 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 consolidated statements of comprehensive 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 Company 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 consolidated statements of comprehensive loss.

28. Fair Value Measurement (Continued)

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. Impairment charges of 5,000, nil and nil were recognized for the years ended December 31, 2019, 2020 and 2021, respectively. For equity method investments, no impairment loss was recognized for all years presented. The Group recorded RMB18,066, RMB30,381 and RMB38,163 impairment loss of property, plant and equipment and loss on inventory obsolescence for the years ended December 31, 2019, 2020 and 2021, 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.

Secured borrowing, unsecured corporate loan and convertible debts 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 long-term 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

Leases - Supplemental balance sheet information - Operating lease (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Leases
Land use rights, net	¥ 289,810		¥ 181,505
Operating lease right-of-use assets, net (excluding land use rights)	1,771,682		1,095,501
Total operating lease assets	2,061,492	$ 323,493	1,277,006
Operating lease liabilities, current	473,245	74,262	210,531
Operating lease liabilities, noncurrent	1,369,825	$ 214,955	1,025,253
Total lease liabilities	¥ 1,843,070		¥ 1,235,784

Deferred Revenue - Additional information (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenue	¥ 694,745		¥ 407,168	¥ 62,638
Deferred revenue, current	305,092	$ 47,876	271,510	56,695
Deferred revenue, noncurrent	389,653	$ 61,145	¥ 135,658	¥ 5,943
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligation expected to be recognized	¥ 305,092
Period of performance obligation expected to be recognized	12 months	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligation expected to be recognized	¥ 389,653
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 \| Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Period of performance obligation expected to be recognized	12 months	12 months

Prepayments and Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2021

Prepayments and Other Current Assets

Summary of prepayments and other current assets


	As of December 31,
	2020	2021
Prepayments to vendors	104,271	218,660
Deductible VAT input	196,021	118,177
Prepaid rental and deposits	30,357	48,929
Receivables related to rebate	—	28,491
Loan receivable from Lifan Holdings⁽ⁱ⁾	8,000	—
Others	15,006	68,615
Less:Allowance for Credit Losses	—	(2,192)
Total	353,655	480,680

(i)

Loan receivable from Lifan Holdings represents the uncollected loan principal under the loan agreements entered into between Beijing CHJ and Lifan Holdings in 2018 (the “2018 Lifan Loan”) and 2019 (the “2019 Lifan Loan”). The outstanding loan receivable from Lifan Holdings was settled against the payables for consideration payble for the acquistion of Chongqing Zhizao in April 2021 (Note 5).

Trade receivable (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Accounts, Notes, Loans and Financing Receivable
Total	¥ 120,541	$ 18,916	¥ 115,549
Within 3 months
Accounts, Notes, Loans and Financing Receivable
Total	16,462		10,429
Between 3 months and 6 months
Accounts, Notes, Loans and Financing Receivable
Total	890		18,914
Between 6 months and 1 year
Accounts, Notes, Loans and Financing Receivable
Total			77,903
More than 1 year
Accounts, Notes, Loans and Financing Receivable
Total	¥ 103,189		¥ 8,303

Selling, General and Administrative Expenses (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Selling, General and Administrative Expenses.
Employee compensation	¥ 1,414,177		¥ 449,109	¥ 238,368
Marketing and promotional expenses	1,100,769		264,814	176,383
Rental and related expenses	324,655		162,907	78,897
Depreciation and amortization expenses	82,777		37,923	57,650
Travel expenses	69,079		20,806	20,171
Expected credit losses	6,415
Impairment of property, plant and equipment			30,381	18,066
Others	494,513		152,879	99,844
Total	¥ 3,492,385	$ 548,031	¥ 1,118,819	¥ 689,379

Trade and Notes Payable (Tables)

12 Months Ended

Dec. 31, 2021

Trade and Notes Payable

Schedule of trade and notes payable


	As of December 31,
	2020	2021
Trade payable for raw materials	2,991,538	7,089,370
Notes payable	168,977	2,286,680
Total	3,160,515	9,376,050

Schedule of maturity of trade and notes payable


	As of December 31,
	2020	2021
Within 3 months	3,118,840	7,539,833
Between 3 months and 6 months	18,537	1,639,286
Between 6 months and 1 year	10,676	161,913
More than 1 year	12,462	35,018
Total	3,160,515	9,376,050

Prepayments and Other Current Assets

12 Months Ended

Dec. 31, 2021

Prepayments and Other Current Assets

Prepayments and Other Current Assets

8. Prepayments and Other Current Assets

Prepayments and other current assets consist of the following:


	As of December 31,
	2020	2021
Prepayments to vendors	104,271	218,660
Deductible VAT input	196,021	118,177
Prepaid rental and deposits	30,357	48,929
Receivables related to rebate	—	28,491
Loan receivable from Lifan Holdings⁽ⁱ⁾	8,000	—
Others	15,006	68,615
Less:Allowance for Credit Losses	—	(2,192)
Total	353,655	480,680

(i)

Fair Value Measurement - Additional information (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Fair Value Measurement
Equity securities without readily determinable fair value, impairment charges	¥ 0		¥ 0	¥ 5,000
Equity method investments, impairment loss	0		0	0
Impairment loss of property, plant and equipment and loss on inventory obsolescence	¥ 38,163	$ 5,989	¥ 30,381	¥ 18,066

Short-term Borrowings and Long-term Borrowings - Additional information (Details) ¥ in Thousands, $ in Thousands	1 Months Ended				12 Months Ended
	Nov. 30, 2021 CNY (¥)	Aug. 31, 2021 CNY (¥)	Apr. 30, 2021 CNY (¥)	Apr. 30, 2021 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)	Sep. 30, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Short term borrowings
Debt instrument principal amount			100.00%	100.00%
Interest expense debt					¥ 21,369	$ 3,353
Debt instrument carrying amount					5,499,041
Deferred finance costs net					101,100
Non-current portion					5,960,899		$ 935,395		¥ 511,638
USD
Short term borrowings
Debt instrument convertible conversion ratio			28.34	28.34
RMB
Short term borrowings
Debt instrument convertible conversion ratio			35.2818	35.2818
Secured Loan Matures December 31, 2022
Short term borrowings
Repayments of Debt	¥ 101,882
Unsecured Loan Matures June 30, 2022
Short term borrowings
Repayments of Debt		¥ 429,692
Non-current portion									¥ 412,921
Convertible Debt Matures May 1, 2028
Short term borrowings
Principal Amount \| $				$ 862,500
Interest rate (as a percent)				0.25%
Proceeds from issuance of debt			¥ 5,533,238	$ 844,876
Debt instrument principal amount			100.00%	100.00%
Interest expense debt \| $						$ 3,353
Debt instrument carrying amount					5,499,041
Deferred finance costs net					101,100
Convertible Debt Matures May 1, 2028 \| USD
Short term borrowings
Debt instrument convertible conversion ratio			28.34	28.34
Convertible Debt Matures May 1, 2028 \| RMB
Short term borrowings
Debt instrument convertible conversion ratio			35.2818	35.2818
Secured bank loan
Short term borrowings
Principal Amount					¥ 600,000
Interest rate (as a percent)					4.80%		4.80%	4.80%
Maximum borrowing capacity								¥ 1,009,900
Remaining borrowing capacity					¥ 409,900
Current portion					37,042
Non-current portion					562,958
Total					¥ 600,000

Parent Company Only Condensed Financial Information (Tables)

12 Months Ended

Dec. 31, 2021

Parent Company Only Condensed Financial Information

Condensed balance sheets of parent company


	As of December 31,
	2020	2021
	RMB	RMB

ASSETS
Current assets:
Cash and cash equivalents	1,149,374	14,762,875
Time deposits and short-term investments	14,486,070	7,020,662
Amounts due from subsidiaries of the Group	14,065,341	23,763,053
Prepayments and other current assets	—	10,211
Total current assets	29,700,785	45,556,801
Non-current assets:
Investments in subsidiaries, VIEs and VIEs' subsidiaries	42,754	890,788
Long-term investments	64,916	28,452
Total non-current assets	107,670	919,240
Total assets	29,808,455	46,476,041
LIABILITIES
Current liabilities:
Accruals and other current liabilities	4,858	13,798
Total current liabilities	4,858	13,798
Non-current liabilities:
Long-term borrowings	—	5,397,941
Total non-current liabilities	—	5,397,941
Total liabilities	4,858	5,411,739
SHAREHOLDERS' (DEFICIT)/EQUITY
Class A Ordinary Shares	1,010	1,176
Class B Ordinary Shares	235	235
Treasury shares	—	(89)
Additional paid-in capital	37,289,761	49,390,486
Accumulated other comprehensive loss	(1,005,184)	(1,521,871)
Accumulated deficit	(6,482,225)	(6,805,635)
Total shareholders' equity	29,803,597	41,064,302
Total liabilities and shareholders' equity	29,808,455	46,476,041

Condensed statements of comprehensive loss of parent company


	For the Year Ended December 31,
	2019	2020	2021
	RMB	RMB	RMB

Operating expenses:
Selling, general and administrative	(5,114)	(9,424)	(27,288)
Research and development	—	—	(852)
Total operating expenses	(5,114)	(9,424)	(28,140)
Loss from operations	(5,114)	(9,424)	(28,140)
Other income/(expense)
Interest expense	(9,332)	—	(21,369)
Interest income	20,505	4,467	10,746
Equity in loss of subsidiaries, VIEs and VIEs’ subsidiaries	(2,031,371)	(520,093)	(563,106)
Change in fair value of warrants and derivative liabilities	(426,425)	272,327	—
Investment income, net	14,880	106,823	272,991
Foreign exchange loss	(1,084)	(5,861)	(3,023)
Others, net	(595)	104	10,446
Loss before income tax expense	(2,438,536)	(151,657)	(321,455)
Income tax expense	—	—	—
Net loss	(2,438,536)	(151,657)	(321,455)
Accretion on convertible redeemable preferred shares to redemption value	(743,100)	(651,190)	—
Deemed dividend to preferred shareholders upon extinguishment, net (Note 23)	(217,362)	—	—
Effect of exchange rate changes on convertible redeemable preferred shares	117,391	10,862	—
Net loss attributable to ordinary shareholders of Li Auto Inc.	(3,281,607)	(791,985)	(321,455)
Net loss	(2,438,536)	(151,657)	(321,455)
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustment, net of tax	2,851	(1,020,728)	(516,687)
Total comprehensive loss, net of tax	(2,435,685)	(1,172,385)	(838,142)

Condensed statements of cash flows of parent company


	For the Year Ended December 31,
	2019	2020	2021
	RMB	RMB	RMB

CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating activities	26,492	109,961	367,063
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to, and investments in subsidiaries, VIEs and VIEs' subsidiaries	(4,384,396)	(10,006,889)	(10,157,678)
Placement of time deposits	(1,725,148)	—	(298,284)
Redemption of time deposits	1,265,877	463,527	297,654
Placement of short-term investments	(35,157)	(75,367,086)	(173,133,568)
Redemption of short-term investments	—	60,452,428	180,386,757
Net cash used in investing activities	(4,878,824)	(24,458,020)	(2,905,119)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs	5,254,333	3,851,034	—
Proceeds from issuance of convertible debts	168,070	—	5,533,238
Proceeds from IPOs and concurrent private placements, net of issuance cost	—	11,034,685	11,004,778
Proceeds from follow-on offering, net of issuance costs	—	9,990,955	—
Proceeds from exercise of share options	—	—	1,139
Proceeds from issuance of ordinary shares	—	—	70
Net cash provided by financing activities	5,422,403	24,876,674	16,539,225
Effects of exchange rate changes on cash and cash equivalents	25,595	(20,248)	(387,668)
Net increase in cash, cash equivalents	595,666	508,367	13,613,501
Cash, cash equivalents at beginning of the year	45,341	641,007	1,149,374
Cash, cash equivalents at end of the year	641,007	1,149,374	14,762,875

CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Current assets:
Cash and cash equivalents	¥ 27,854,224	$ 4,370,936	¥ 8,938,341
Restricted cash	2,638,840	414,092	1,234,178
Time deposits and short-term investments	19,668,239	3,086,376	19,701,382
Trade receivable, net of allowance for credit losses of nil, and RMB467 as of December 31, 2020 and 2021, respectively	120,541	18,916	115,549
Inventories	1,617,890	253,882	1,048,004
Prepayments and other current assets, net of allowance for credit losses of nil, and RMB2,192 as of December 31, 2020 and 2021, respectively	480,680	75,429	353,655
Total current assets	52,380,414	8,219,631	31,391,109
Non-current assets:
Long-term investments	156,306	24,528	162,853
Property, plant and equipment, net	4,498,269	705,877	2,478,687
Operating lease right-of-use assets, net	2,061,492	323,493	1,277,006
Intangible assets, net	751,460	117,920	683,281
Other noncurrent assets, net of allowance for credit losses of nil, and RMB3,757 as of December 31, 2020 and 2021, respectively	1,981,076	310,872	321,184
Deferred tax assets	19,896	3,122	59,156
Total non-current assets	9,468,499	1,485,812	4,982,167
Total assets	61,848,913	9,705,443	36,373,276
Current liabilities:
Short-term borrowings	37,042	5,813
Trade and notes payable	9,376,050	1,471,307	3,160,515
Amounts due to related parties	37,455	5,878	19,206
Deferred revenue, current	305,092	47,876	271,510
Operating lease liabilities, current	473,245	74,262	210,531
Accruals and other current liabilities	1,879,368	294,914	647,459
Total current liabilities	12,108,252	1,900,050	4,309,221
Noncurrent liabilities:
Long-term borrowings	5,960,899	935,395	511,638
Deferred revenue, noncurrent	389,653	61,145	135,658
Operating lease liabilities, noncurrent	1,369,825	214,955	1,025,253
Finance lease liabilities, noncurrent			366,883
Deferred tax liabilities	153,723	24,122	36,309
Other noncurrent liabilities	802,259	125,891	184,717
Total noncurrent liabilities	8,676,359	1,361,508	2,260,458
Total liabilities	20,784,611	3,261,558	6,569,679
Commitments and contingencies (Note 29)
SHAREHOLDERS' EQUITY
Treasury Shares	(89)	(14)
Additional paid-in capital	49,390,486	7,750,445	37,289,761
Accumulated other comprehensive loss	(1,521,871)	(238,815)	(1,005,184)
Accumulated deficit	(6,805,635)	(1,067,953)	(6,482,225)
Total shareholders' equity	41,064,302	6,443,885	29,803,597
Total liabilities and shareholders' equity	61,848,913	9,705,443	36,373,276
Class A Ordinary Shares
SHAREHOLDERS' EQUITY
Ordinary shares	1,176	185	1,010
Class B Ordinary Shares
SHAREHOLDERS' EQUITY
Ordinary shares	¥ 235	$ 37	¥ 235

Convertible Debts

12 Months Ended

Dec. 31, 2021

Convertible Debts.

Convertible Debts

17. Convertible Debts

The Group recognized unsecured corporate loan issued in 2017, Convertible Promissory Notes issued in 2019 and Convertible Senior Notes issued in 2021 in the short-term borrowings and long-term borrowings on the consolidated balance sheets as of December 31, 2020 and 2021.

Unsecured corporate loan

In November 2017, Beijing CHJ entered into a convertible loan agreement with Changzhou Wunan New Energy Vehicle Investment Co., Ltd (“Wunan”) to obtain a convertible loan with aggregated principal amount of RMB600,000 at a simple interest of 8% per annum. RMB450,000 of the principal was received in December 2017, and RMB150,000 was received in January 2018. The principal and accrued interest shall be due and payable by Beijing CHJ on the earlier of (i) 3 years following the issuance date; or (ii) upon the reformation of Beijing CHJ from a limited liability company to a corporate. Pursuant to the convertible loan agreement, Wunan may convert the outstanding principal of the convertible loan into equity interest of Beijing CHJ, which effectively indicates a fixed conversion price equal to the issue price of Series B-1 Preferred Shares, at any time before maturity date. Accrued interests shall be waived upon conversion.

In June 2020, Beijing CHJ entered into a series of supplemental agreements with Wunan. Pursuant to the supplemental agreements, the maturity date of the convertible loan was extended to June 30, 2022, and the conversion right in relation to convert the outstanding principal of the convertible loan into equity interest of Beijing CHJ was waived by Wunan. In accordance with the supplemental contracts, Wunan also agreed to return the prepayment for purchase of land use right of RMB175,582 and reimburse certain eligible expenditures with the amount of RMB143,838. The return of the prepayment and the reimbursements were used as a settlement of the unpaid interests and part of the outstanding principal of the convertible loan. The outstanding loan principal was reduced to RMB401,073 with a revised interest rate of 6.175% per annum. As a result, the convertible loan was extinguished, and a new loan with the principle amount of RMB401,073, being the difference between the carrying value of the convertible loan and the settlement amount of RMB319,420, was recorded as a long-term borrowing. The balance of the new loan and accrued interest payable was RMB412,921 as of December 31, 2020. The Group fully repaid the outstanding principal and accrued interest RMB429,692 in August 2021 (Note 14).

Convertible Promissory Notes

In January and March 2019, the Company issued convertible promissory notes with the aggregated principal amount of US $25,000 (RMB168,070) with simple interest of 8% per annum. The principal and accrued interest shall be due and payable by the Company 12 months following the date of issuance. Pursuant to the convertible promissory notes agreements, the entire convertible promissory notes shall be converted into 11,873,086 shares of Series B-3 Preferred Shares of the Company at the issuance price of Series B-3 Preferred Shares upon the closing of the Reorganization. Holders have the right to convert any portion or the entire principal into Series B-3 preferred equity interest of Beijing CHJ, if the Reorganization has not been completed before maturity, or if there occurs any change in control, disposition of all or substantially all of the assets or IPO of Beijing CHJ. Accrued interests shall be waived if the investors elect to exercise the conversion options.

The convertible promissory notes documents provided that the existing indebtedness of the Company rank pari passu with the convertible promissory notes. If any future indebtedness of the Company shall rank senior to this convertible promissory notes, such future indebtedness shall subject to the convertible promissory notes holders’ prior written consent.

17. Convertible Debts (Continued)

Before conversion, the holders of the convertible promissory notes are entitled to all rights granted to Series B-3 Preferred Shareholders, such as dividend rights, redemption rights, pre-emptive right, right of first refusal, rights of co-sale, right of anti-dilution, liquidation preference rights. The convertible promissory notes holders were also granted:

the right to obtain additional shares to be issued in the next round of new financing for free to keep their shareholding percentage (or as converted shareholding percentage for convertible promissory notes holders) unchanged (the “Series B-3 Anti-Dilution Warrant”); and

the right to acquire additional shares to be issued in the next two rounds of financing at a 15% discount of purchase price, up to the subscription amount equal to the investment amount in their Series B-3 Preferred Shares and convertible promissory notes (the “Series B-3 Additional Warrant”).

The Series B-3 Anti-Dilution Warrant and the Series B-3 Additional Warrant issued together with the convertible promissory notes are considered freestanding financial liabilities under ASC 480, and are classified as a liability at their issuance date fair value in accordance with ASC 480-10-55, and are subsequently measured at fair value, with changes in fair value recorded in the consolidated statement of comprehensive loss. The initial fair value of the Series B-3 Anti-Dilution Warrant and the Series B-3 Additional Warrant granted to holders of convertible promissory notes were RMB14,161. For details see Note 23.

In the event of a change in control or disposition of all or substantially all of the Company’s assets, if so requested by the convertible promissory notes holders, the holders shall enjoy the same liquidation preference rights as Series B-3 Preferred Shareholders as if the conversion has already occurred, the convertible promissory notes shall be deemed as fully repaid after paying such liquidation preference amount.

On July 2, 2019, in conjunction with the Reorganization of the Group, all convertible promissory notes were converted into Series B-3 Preferred Shares. The principal amount of US$25,000 and accrued interest of US$1,376 (RMB9,428) less the initial fair value of the Series B-3 Anti-Dilution Warrant and the Series B-3 Additional Warrant granted to holders of convertible promissory notes, were recognized as the initial carrying value of related B-3 Preferred Shares.

Convertible Senior Notes (“2028 Notes”)

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 ADSs per US$1,000 principal amount (which represents an initial conversion price of approximately US$28.34 per ADS) 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 ADS, 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 our Company effects a share split or share combination. As of the Latest Practicable Date, 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 partial 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.

17. Convertible Debts (Continued)

The Company assessed the convertible debt under ASC 815 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.

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 Company 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.

Therefore, the Company accounted for the convertible debt as single instruments measured at its amortized cost as long-term borrowings on the consolidated balance sheets (Note 14). 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 year ended December 31, 2021, the convertible debt related interest expense was RMB21,369 (US$3,353). As of December 31, 2021, the principal amount of the convertible debt was RMB5,499,041 and the unamortized debt issuance cost was RMB101,100, respectively.

Discontinued Operations

12 Months Ended

Dec. 31, 2021

Discontinued Operations

Discontinued Operations

22. Discontinued Operations

Historically, the Group had a strategy of developing Low-Speed SEV and producing and selling its related battery packs.

In the first quarter of 2018, the Group determined to dispose the SEV business due to the shift on the Group’s business and product strategy. As a result, the long-lived assets related to SEV production, including manufacturing facilities and IP, etc. have ceased to be used, and these assets were considered effectively abandoned.

Subsequent to the termination of the SEV business, the Group still sold the SEV battery packs to external customers, and in September 2019, the Group further decided to dispose the SEV battery packs business and located a potential buyer. Accordingly, the Company concluded that as of September 30, 2019, the SEV battery packs business met all of the held for sale criteria. In the first quarter of 2020, the Company completed the sale of the SEV battery packs business to an affiliate of the Company for a total cash consideration of RMB60,000.

The abandonment or the disposal of the SEV business and the related battery packs business represented strategic shifts of the Group and had a major impact on the Group’s financial results, and met the criteria for the discontinued operations. Therefore, the historical financial results of the SEV related business were classified as discontinued operation.

The following tables set forth the results of operations and cash flows of the discontinued operations, which were included in the Group’s consolidated financial statements.

22. Discontinued Operations (Continued)


	For the Year Ended December 31,
	2019	2020
Revenues	9,654	870
Cost of sales	(18,981)	(2,437)
Gross loss	(9,327)	(1,567)
Operating expenses	(11,359)	(1,423)
Impairment of long‑lived assets	—	—
Loss from operations of discontinued operations	(20,686)	(2,990)
Others, net	24	—
Loss from discontinued operations before income tax expense	(20,662)	(2,990)
Income tax expense	—	—
Net loss from discontinued operations, net of tax	(20,662)	(2,990)


	For the Year Ended December 31,
	2019	2020
Net cash (used in)/provided by discontinued operating activities	(11,395)	148
Net cash (used in)/provided by discontinued investing activities	(10,565)	59,705

The following table presents the gain on disposal of discontinued operations related to the disposal of SEV battery packs business for the year ended December 31, 2020:


		For the Year Ended
		December 31, 2020
Cash consideration received for sale of SEV battery packs business		60,000
Carrying value of net assets transferred		(42,637)
Gain on disposal of discontinued operations		17,363

CONSOLIDATED BALANCE SHEETS(Parentheticals) ¥ in Thousands	Dec. 31, 2021 CNY (¥) shares	Dec. 31, 2021 $ / shares	Dec. 31, 2020 CNY (¥) shares	Dec. 31, 2020 $ / shares
Accounts receivable, allowance for credit loss \| ¥	¥ 467		¥ 0
Prepayments and other current assets, allowance for credit losses \| ¥	2,192		0
Other noncurrent assets, allowance for credit losses \| ¥	¥ 3,757		¥ 0
Ordinary shares, shares issued	1,929,562,426		1,809,288,310
Ordinary shares, shares outstanding	1,929,562,426		1,809,288,310
Class A Ordinary Shares
Ordinary shares, par value \| $ / shares		$ 0.0001		$ 0.0001
Ordinary shares, shares authorized	4,500,000,000		4,000,000,000
Ordinary shares, shares issued	1,709,903,330		1,453,476,230
Ordinary shares, shares outstanding	1,573,750,346		1,453,476,230
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

Other Non-current Assets (Tables)

12 Months Ended

Dec. 31, 2021

Other Non-current Assets

Schedule of other non-current assets


	As of December 31,
	2020	2021
Prepayments for purchase of property, plant and equipment ⁽ⁱ⁾	126,006	1,051,415
Long-term deposits	149,235	653,030
Deductible VAT input, non-current	—	263,390
Others	45,943	16,998
Less: Allowance for credit losses	—	(3,757)
Total	321,184	1,981,076

(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 eletric SUV vehicles and BEV models and a portion of Beijing Manufacturing Base construction.

Other Non-current Assets (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Other Non-current Assets
Prepayments for purchase of property, plant and equipment	¥ 1,051,415		¥ 126,006
Long-term deposits	653,030		149,235
Deductible VAT input, non-current	263,390
Others	16,998		45,943
Less: Allowance for credit losses	(3,757)
Total	¥ 1,981,076	$ 310,872	¥ 321,184

Summary of Significant Accounting Policies (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥) $ / ¥	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2021 USD ($) $ / ¥
Summary of Significant Accounting Policies
Total foreign currency translation adjustment income/(loss)	¥ (516,687)	$ (81,079)	¥ (1,020,728)	¥ 2,851
Foreign currency exchange rate, translation \| $ / ¥	6.3726				6.3726
Cash held in online payments platform \| ¥	¥ 33,540		17,844
Cash and cash equivalents	27,854,224		8,938,341		$ 4,370,936
Restricted cash	2,638,840		1,234,178		414,092
Total cash, cash equivalents and restricted cash	¥ 30,493,064		¥ 10,172,519	¥ 1,436,242	$ 4,785,028

Organization and Nature of Operations - Variable interest entity (Details)	12 Months Ended
	Dec. 31, 2021
Variable interest entity
Power of attorney period (in years)	10 years
Percent of equity interests in a value added telecommunication service provider	50.00%
Beijing CHJ
Variable interest entity
Power of attorney period (in years)	10 years
Ownership percent	50.00%
Beijing CHJ \| Exclusive Consultation and Service Agreements
Variable interest entity
Annual service fee	100.00%
Service fee payment period (in days)	10 days
Service fee payment period with which after end of relevant calendar quarter (in days)	30 days
Contract term (in years)	10 years
Beijing CHJ \| Equity Option Agreements
Variable interest entity
Contract term (in years)	10 years
Beijing CHJ \| Equity Pledge Agreements
Variable interest entity
Equity interests agreed to pledge (as a percent)	100.00%
Beijing CHJ \| Spouses of shareholders
Variable interest entity
Number of shareholders' spousal consent letters	9
Ownership percent	100.00%
Xindian Information \| Spouses of shareholders
Variable interest entity
Number of shareholders' spousal consent letters	9
Ownership percent	98.10%
Chongqing Lixiang Automobile
Variable interest entity
Ownership percent	50.00%

Leases - Weighted-average remaining lease term and discount rate (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Weighted-average remaining lease term
Land use rights	47 years	47 years
Operating leases	8 years	11 years
Finance leases		16 years
Weighted-average discount rate
Land use rights		6.20%
Operating leases	5.80%	5.80%
Finance leases		6.20%

Research and Development Expenses (Tables)

12 Months Ended

Dec. 31, 2021

Research and Development Expenses.

Schedule of research and development expenses


	For the Year Ended December 31,
	2019	2020	2021
Employee compensation	461,922	580,157	2,079,948
Design and development expenses	603,332	431,996	1,003,567
Depreciation and amortization expenses	39,648	44,977	54,110
Rental and related expenses	14,269	18,818	52,985
Travel expenses	21,815	9,360	52,307
Others	28,154	14,549	43,472
Total	1,169,140	1,099,857	3,286,389

Convertible Redeemable Preferred Shares and Warrants (Tables)

12 Months Ended

Dec. 31, 2021

Convertible Redeemable Preferred Shares and Warrants

Schedule of the issuances of convertible redeemable preferred shares


Series	Issuance Date	Shares Issued	Issue Price per Share	Proceeds from Issuance
			RMB	RMB
Pre-A⁽¹⁾	July 21, 2017	50,000,000	RMB2.00	100,000
A-1	July 4, 2016	129,409,092	RMB6.03	780,000
A-2	July 21, 2017	126,771,562	RMB7.89	1,000,000
A-3	September 5, 2017	65,498,640	RMB9.47	620,000
B-1	November 28, 2017	115,209,526	RMB13.11	1,510,000
B-2	June 6, 2018	55,804,773	RMB14.16	790,000
B-3⁽²⁾	January 7/July 2, 2019	119,950,686	RMB14.16	1,701,283
C⁽³⁾	July 2/December 2,2019/January 23, 2020	267,198,535	US$2.23/ US$1.89	3,626,924
D	July 1, 2020	231,758,541	US$2.64/ US$2.35	3,851,034

(1)

Upon the issuance of Series A-2 Preferred Shares, Series Pre-A Ordinary Shares were re-designated to Series Pre-A Preferred Shares (see Note 23).

(2)

Including 11,873,086 Series B-3 Preferred Shares converted from the convertible promissory notes issued by the Company in January 2019 (see Note 17). The Series B-3 Preferred Shareholders and convertible promissory notes holders were granted:

the right to acquire additional shares to be issued in next two rounds of financing at a 15% discount of purchase price, up to the subscription amount equal to the investment amount in their Series B-3 Preferred Shares and convertible promissory notes (the “Series B-3 Additional Warrant”).

(3)

Including 78,334,557 shares of Series C Preferred Shares issued upon the exercise of the Series B-3 Additional Warrant by certain Series B-3 Shareholders and all convertible promissory notes holders at a cash exercise price of RMB1,022,045, or RMB13.02 per share. The leading investor of Series C Preferred Shareholders was granted the right to acquire additional shares to be issued in next round of financing at a 15% discount of purchase price, up to the subscription amount equal to the investment amount in Series C Preferred Shares (the “Series C Additional Warrant”). All non-refundable cash considerations for the issuance of Series C Preferred Shares, including 4,109,127 shares registered subsequently on January 3, 2020, were received in full as of December 31, 2019 and accordingly all shares are considered issued and outstanding from accounting perspective.

On January 23, 2020, 18,916,548 shares of Series C Preferred Shares were issued upon the exercise of the Series B-3 Anti-Dilution Warrant.

Schedule of movement of the warrants and conversion feature derivative liabilities


	Warrants	Derivative
	Liabilities	Liabilities	Total
Balance at January 1, 2019	—	—	—
Issuance	174,846	1,066,013	1,240,859
Fair value change	292,305	211,859	504,164
Exercise	(45,858)	—	(45,858)
Expire(*)	(77,739)	—	(77,739)
Translation to reporting currency	8,196	19,068	27,264
Balance at December 31, 2019	351,750	1,296,940	1,648,690
Issuance	—	328,461	328,461
Fair value change	(46,812)	(225,515)	(272,327)
Exercise	(305,333)	(1,400,670)	(1,706,003)
Translation to reporting currency	395	784	1,179
Balance at December 31, 2020	—	—	—

(*)

Upon the completion of the issuance of the Series C Preferred Shares in December 2019, the unvested Series B-3 Additional Warrant to acquire additional Series C Preferred Shares at a 15% discount of purchase price expired, as such the fair value of such Series B-3 Additional Warrant reduced to zero accordingly.

Schedule of convertible redeemable preferred shares activities


	Series Pre‑A		Series A‑1		Series A‑2		Series A‑3		Series B‑1		Series B‑2		Series B‑3		Series C		Series D		Total
	Number	Amount	Number	Amount	Number	Amount	Number	Amount	Number	Amount	Number	Amount	Number	Amount	Number	Amount	Number	Amount	Number	Amount
	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)
Balances as of January 1, 2019	50,000,000	175,847	129,409,092	907,658	126,771,562	1,099,816	65,498,640	676,458	115,209,526	1,621,561	48,656,111	717,699	—	—	—	—	—	—	535,544,931	5,199,039
Proceeds from Series B-2 preferred shares	—	—	—	—	—	-	—	—	—	—	7,148,662	101,200	—	—	—	—	—	—	7,148,662	101,200
Conversion of convertible promissory notes into Series B-3 Preferred Shares	—	—	—	—	—	—	—	—	—	—	—	—	11,873,086	166,549	—	—	—	—	11,873,086	166,549
Issuance of Series B-3 Preferred Shares	—	—	—	—	—	—	—	—	—	—	—	—	108,077,600	1,395,015	—	—	—	—	108,077,600	1,395,015
Issuance of Series C Preferred Shares	—	—	—	—	—	—	—	—	—	—	—	—	—	—	248,281,987	3,616,801	—	—	248,281,987	3,616,801
Deemed dividend to/(contribution from) preferred shareholders upon extinguishment	—	281,638	—	284,655	—	115,806	—	(15,139)	—	(310,359)	—	(130,312)	—	(8,927)	—	—	—	—	—	217,362
Bifurcation of conversion feature	—	(14,549)	—	(254,121)	—	(212,055)	—	(92,256)	—	(105,702)	—	(47,231)	—	(108,190)	—	(231,909)	—	—	—	(1,066,013)
Accretion on convertible redeemable preferred shares to redemption value	—	—	—	60,249	—	90,077	—	61,299	—	164,540	—	80,891	—	133,798	—	152,246	—	—	—	743,100
Effect of exchange rate changes on preferred shares	—	(8,050)	—	(17,492)	—	(18,685)	—	(10,592)	—	(22,433)	—	(11,944)	—	(27,165)	—	(1,030)	—	—	—	(117,391)
Balances as of December 31, 2019	50,000,000	434,886	129,409,092	980,949	126,771,562	1,074,959	65,498,640	619,770	115,209,526	1,347,607	55,804,773	710,303	119,950,686	1,551,080	248,281,987	3,536,108	—	—	910,926,266	10,255,662
Exercise of Series B-3 Anti-Dilution Warrant	—	—	—	—	—	—	—	—	—	—	—	—	—	—	18,916,548	305,333	—	—	18,916,548	305,333
Bifurcation of conversion feature	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	(81,082)	—	—	—	(81,082)
Issuance of preferred shares-Series D	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	231,758,541	3,603,655	231,758,541	3,603,655
Accretion on convertible redeemable preferred shares to redemption value	—	—	—	34,229	—	63,363	—	46,738	—	136,567	—	64,859	—	80,635	—	178,007	—	46,792	—	651,190
Effect of exchange rate changes on preferred shares	—	(858)	—	(1,746)	—	(1,770)	—	(964)	—	(1,899)	—	(1,040)	—	(2,613)	—	28	—	—	—	(10,862)
Conversion of preferred shares to ordinary shares	(50,000,000)	(434,028)	(129,409,092)	(1,013,432)	(126,771,562)	(1,136,552)	(65,498,640)	(665,544)	(115,209,526)	(1,482,275)	(55,804,773)	(774,122)	(119,950,686)	(1,629,102)	(267,198,535)	(3,938,394)	(231,758,541)	(3,650,447)	(1,161,601,355)	(14,723,896)
Balances as of December 31, 2020	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares	Dec. 31, 2019 CNY (¥) ¥ / shares shares
Revenues:
Total revenues	¥ 27,009,779	$ 4,238,424	¥ 9,456,609	¥ 284,367
Cost of sales:
Total cost of sales	(21,248,325)	(3,334,326)	(7,907,270)	(284,462)
Gross (loss)/profit	5,761,454	904,098	1,549,339	(95)
Operating expenses:
Research and development	(3,286,389)	(515,706)	(1,099,857)	(1,169,140)
Selling, general and administrative	(3,492,385)	(548,031)	(1,118,819)	(689,379)
Total operating expenses	(6,778,774)	(1,063,737)	(2,218,676)	(1,858,519)
Loss from operations	(1,017,320)	(159,639)	(669,337)	(1,858,614)
Other (expense)/income
Interest expense	(63,244)	(9,924)	(66,916)	(83,667)
Interest income and investment income, net	740,432	116,190	254,916	79,631
Changes in fair value of warrants and derivative liabilities			272,327	(426,425)
Others, net	187,320	29,395	20,133	(128,799)
(Loss)/Income before income tax expenses	(152,812)	(23,978)	(188,877)	(2,417,874)
Income tax benefit/(expense)	168,643	26,464	(22,847)
Net (loss)/income from continuing operations	(321,455)	(50,442)	(166,030)	(2,417,874)
Net (loss)/income from discontinued operations, net of tax			14,373	(20,662)
Net loss	(321,455)	(50,442)	(151,657)	(2,438,536)
Accretion on convertible redeemable preferred shares to redemption value	0		(651,190)	(743,100)
Deemed dividend to preferred shareholders upon extinguishment, net				(217,362)
Effect of exchange rate changes on convertible redeemable preferred shares			10,862	117,391
Net loss attributable to ordinary shareholders of Li Auto Inc.	(321,455)	(50,442)	(791,985)	(3,281,607)
Including: Net loss from continuing operations attributable to ordinary shareholders	¥ (321,455)	$ (50,442)	(806,358)	(3,260,945)
Net (loss)/income from discontinued operations attributable to ordinary shareholders			¥ 14,373	¥ (20,662)
Weighted average number of ordinary shares used in computing net loss per share - Basic
Basic \| shares	1,853,320,448	1,853,320,448	870,003,278	255,000,000
Weighted average number of ordinary shares used in computing net loss per share - Diluted
Diluted \| shares	1,853,320,448	1,853,320,448	870,003,278	255,000,000
Net (loss)/income per share attributable to ordinary shareholders - Basic
Continuing operations \| (per share)	¥ (0.17)	$ (0.03)	¥ (0.93)	¥ (12.79)
Discontinued operations \| ¥ / shares			0.02	(0.08)
Net loss per share \| (per share)	(0.17)	(0.03)	(0.91)	(12.87)
Net (loss)/income per share attributable to ordinary shareholders - Diluted
Continuing operations \| (per share)	(0.17)	(0.03)	(0.93)	(12.79)
Discontinued operations \| ¥ / shares			0.02	(0.08)
Net loss per share \| (per share)	¥ (0.17)	$ (0.03)	¥ (0.91)	¥ (12.87)
Net loss	¥ (321,455)	$ (50,442)	¥ (151,657)	¥ (2,438,536)
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustment, net of tax	(516,687)	(81,079)	(1,020,728)	2,851
Total other comprehensive income/(loss), net of tax	(516,687)	(81,079)	(1,020,728)	2,851
Total comprehensive loss, net of tax	(838,142)	(131,521)	(1,172,385)	(2,435,685)
Accretion on convertible redeemable preferred shares to redemption value	0		(651,190)	(743,100)
Deemed dividend to preferred shareholders upon extinguishment, net				(217,362)
Effect of exchange rate changes on convertible redeemable preferred shares			10,862	117,391
Comprehensive loss attributable to ordinary shareholders of Li Auto Inc.	(838,142)	(131,521)	(1,812,713)	(3,278,756)
Vehicle sales
Revenues:
Total revenues	26,128,469	4,100,127	9,282,703	280,967
Cost of sales:
Total cost of sales	(20,755,578)	(3,257,003)	(7,763,628)	(279,555)
Other sales and services
Revenues:
Total revenues	881,310	138,297	173,906	3,400
Cost of sales:
Total cost of sales	¥ (492,747)	$ (77,323)	¥ (143,642)	¥ (4,907)

Fair Value Measurement (Tables)

12 Months Ended

Dec. 31, 2021

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
	2020	(Level 1)	(Level 2)	(Level 3)
Assets
Short-term investments	18,850,462	—	18,850,462	—
Equity securities with readily determinable fair value	64,916	64,916	—	—
Total assets	18,915,378	64,916	18,850,462	—


		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	—

Short-term Borrowings and Long-term Borrowings

12 Months Ended

Dec. 31, 2021

Short-term Borrowings and Long-term Borrowings

Short-term Borrowings and Long-term Borrowings

14. Short-term Borrowings and Long-term Borrowings

Borrowings consist of the following:


				Interest Rate		As of December 31,
	Maturity Date	Principal Amount		Per Annum		2020	2021
Secured borrowing ⁽¹⁾	December 31, 2022	RMB	94,550	6.1750	%	98,717	—
Unsecured corporate loan⁽²⁾	June 30, 2022	RMB	401,073	6.1750	%	412,921	—
Convertible debt ⁽³⁾	May 1, 2028	US$	862,500	0.2500	%	—	5,397,941
Secured bank loan ⁽⁴⁾	September 28, 2029	RMB	600,000	4.8000	%	—	600,000
Total borrowings						511,638	5,997,941

Classified as:


	As of December 31,
	2020	2021
– Short-term borrowings	—	37,042
– Long-term borrowings	511,638	5,960,899
Total	511,638	5,997,941

(1)

As the transaction in relation to Changzhou Manufacturing Base II did not qualify the sales accounting, the consideration received excluding the related taxes was treated as a secured borrowing and recorded as a short-term borrowing as of December 31, 2019. In June 2020, the Group entered into a series of supplemental agreements with the lessor. Pursuant to the supplemental agreements, the maturity date of the borrowing was extended to December 31, 2022. As a result, the borrowing was recorded as a long-term borrowing as of December 31, 2020. Upon the completion of acquisition of Changzhou Manufacturing Base Phase I and Phase II (See Note 11), the balance of secured borrowing of RMB101,882 was settled as the lease agreements were terminated in November 2021.

(2)

Pursuant to the supplemental agreements of the convertible loan in June 2020 (Note 17), the conversion right in relation to convert the outstanding principal of the convertible loan into equity interest of Beijing CHJ was waived. In addition, the maturity date of the convertible loan was extended to June 30, 2022. As a result, the convertible loan was extinguished, and a new loan was recorded as a long-term borrowing as of December 31, 2020. The balance of unsecured corporate loan and accrued interest was RMB412,921 as of December 31, 2020. The Company fully repaid the outstanding principal and accrued interest of RMB429,692 in August 2021.

(3)

In April 2021, the Company issued and sold convertible debt in an aggregate principal of US$862,500 through a private placement (Note 17). 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 ADS per US$1,000 principal amount (which represents an initial conversion price of approximately US$28.34 per ADS) 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.

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.

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

The Company accounted for the convertible debt as single instruments measured at its amortized cost as long-term borrowings on the 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 year ended December 31, 2021, the convertible debt related interest expense was US$3,353 (RMB21,369). As of December 31, 2021, the principal amount of the convertible debt was RMB5,499,041 and the unamortized debt issuance cost was RMB101,100, respectively.

(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 December 31, 2021, the outstanding loan principal was RMB600,000, of which RMB37,042 will be due in 2022 and the remaining RMB562,958 will be due in 2023 and thereafter. The unused credit limits under these facilities was RMB409,900 as of December 31, 2021.

As of December 31, 2020 and 2021, the secured bank loan was classified as follows:


	As of December 31,
	2020	2021
Secured bank loan
– Current portion	—	37,042
– Non-current portion	—	562,958
Total	—	600,000

- 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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1I
-Subparagraph (d)
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
-Subparagraph (SX 210.4-08(c))
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-Subparagraph (g)
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Share-based Compensation - Additional Information (Details) $ / shares in Units, $ in Thousands	1 Months Ended			12 Months Ended
	Jul. 31, 2021 Vote $ / shares shares	Jul. 31, 2020 shares	Jul. 31, 2019 shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 $ / shares shares	Dec. 31, 2019 $ / shares 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
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
Granted (in shares) \| shares				36,996,286	4,224,000	3,430,000
Weighted average grant date fair value of options granted \| $ / shares				$ 15.78	$ 1.71	$ 0.99
Unrecognized compensation expenses \| $				$ 250,946
Weighted average period of unrecognized compensation cost				4 years 3 months 10 days
Number of vested and exercisable options (in shares) \| shares				40,251,584	40,410,000
Average exercise price (in USD per share) \| $ / shares				$ 0.10	$ 0.10
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	1.35	0.90
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	$ 1.90	$ 1.45
2021 Share Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award
Granted (in shares) \| shares				108,557,400
Weighted average grant date fair value of options granted \| $ / shares				$ 4.96
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

Commitments and Contingencies (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 26, 2019	Dec. 19, 2019
Capital commitments
Less than One Year	¥ 2,798,736
1-3 Years	121,825
Total	2,920,561
Purchase obligations
Less than One Year	11,798,199
Total	¥ 11,798,199
Disposal by sale \| Chongqing Zhizao
Purchase obligations
Equity interest disposed		100.00%	100.00%

Intangible Assets, Net (Tables)

12 Months Ended

Dec. 31, 2021

Intangible Assets, Net

Summary of intangible assets and related accumulated amortization


	As of December 31,
	2020	2021
Automotive Manufacturing Permission (Note 5)	647,174	647,174
Indefinite‑lived intangible assets, net	647,174	647,174
Software	58,097	137,576
Patents	694	694
Definite‑lived intangible assets	58,791	138,270
Less: Accumulated amortization
Software	(21,990)	(33,290)
Patents	(694)	(694)
Accumulated amortization	(22,684)	(33,984)
Definite‑lived intangible assets, net	36,107	104,286
Total intangible assets, net	683,281	751,460

Summary of amortization expenses related to intangible assets for future periods


		As of December 31,
		2021
2022		16,540
2023		14,121
2024		11,348
2025		9,815
2026 and thereafter		52,462
Total		104,286

Summary of Significant Accounting Policies - Derivative instruments and Inventories (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Summary of Significant Accounting Policies
Outstanding balance of derivative instruments	¥ 0
Fair value gain of derivative instruments	73,824
Inventory Write-down	¥ 0	¥ 0	¥ 0

Discontinued Operations - Assets and liabilities (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Assets and Liabilities
Impairment of Long-Lived Assets Held-for-use	¥ 27,389	¥ 30,381	¥ 18,066
SEV related business \| Disposal by sale
Assets and Liabilities
Total consideration		¥ 60,000		¥ 60,000

Organization and Nature of Operations (Tables)

12 Months Ended

Dec. 31, 2021

Variable Interest Entity [Line Items]

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



	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)
Jiangsu CHJ Automobile Co., Ltd. (“Jiangsu CHJ”)	100	%	June 23, 2016	Changzhou, PRC	Purchase of manufacturing equipment	(i)
Lixiang Zhizao Automobile Sales & Services (Beijing) Co., Ltd	100	%	July 13, 2018	Beijing, PRC	Sales and after sales management	(i)
Lixiang Zhixing Automobile Sales & Services (Shanghai) Co., Ltd	100	%	April 12, 2019	Shanghai, PRC	Sales and after sales management	(i)
Lixiang Zhizao Automobile Sales & Services (Chengdu) Co., Ltd	100	%	July 9, 2018	Chengdu, PRC	Sales and after sales management	(i)

			Date of Incorporation	Place of Incorporation	Principal Activities	Notes
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

VIEs’ subsidiary
Chongqing Lixiang Automobile Co., Ltd. (“Chongqing Lixiang Automobile”)			October 11, 2019	Chongqing, PRC	Manufacturing of automobile	(ii)

Notes:

(i)	All the subsidiaries were VIE’s subsidiaries before the 2021 Reorganization.

(ii)	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 Beijing CHJ.

VIEs and VIEs' subsidiaries

Variable Interest Entity [Line Items]

Schedule of consolidated financial information of the Group's VIEs and VIEs' subsidiaries


	As of December 31,
	2020	2021
	RMB	RMB
Current assets:
Cash and cash equivalents	1,546,193	5,311,800
Restricted cash	1,234,178	2,415,941
Time deposits and short-term investments	2,581,690	8,326,541
Trade receivable	103,271	103,056
Amounts due from the Group companies	7,704,630	23,402,104
Inventories	271,379	1,396,992
Prepayments and other current assets	254,061	220,402
Non‑current assets:
Investment in subsidiaries	609,748	—
Long‑term investments	97,937	97,854
Property, plant and equipment, net	2,335,824	2,329,507
Operating lease right‑of‑use assets, net	1,182,134	731,874
Intangible assets, net	682,083	703,274
Other non‑current assets	218,531	1,107,674
Total assets	18,821,659	46,147,019
Current liabilities:
Short‑term borrowings	—	31,547
Trade and notes payable	3,107,646	8,547,181
Amounts due to the Group companies	12,203,705	31,999,140
Amounts due to related parties	19,206	1,277
Operating lease liabilities, current	170,033	80,606
Deferred revenue, current	230,720	—
Accruals and other current liabilities	453,731	515,036
Non‑current liabilities:
Long-term borrowings	511,638	479,453
Deferred revenue, non‑current	102,898	8,704
Operating lease liabilities, non‑current	973,455	719,628
Finance lease liabilities, non‑current	366,883	—
Deferred tax liabilities, non-current	36,309	153,723
Other non‑current liabilities	157,907	14,333
Total liabilities	18,334,131	42,550,628
Total shareholders’ equity	487,528	3,596,391
Total liabilities and shareholders’ equity	18,821,659	46,147,019


	For the Year Ended December 31,
	2019	2020	2021

Third-party revenues	284,367	8,001,067	6,294,675
Inter-company revenues	974,313	8,553,798	22,287,788

Third-party cost	(284,462)	(7,790,586)	(20,171,861)
Inter-company cost	(352,672)	(7,877,944)	(5,891,611)

Third-party expenses	(1,675,643)	(1,358,507)	(2,401,187)
Inter-company expenses	—	(25,858)	(65,750)

Share of loss from subsidiaries	(5,783)	(1,179)	(13)
Other (expense)/income	(174,403)	40,309	2,610,121
(Loss)/Income before income tax expenses	(1,234,283)	(458,900)	2,662,162
Less: income tax expenses	—	(36,309)	(117,413)
Net (loss)/income from continuing operations	(1,234,283)	(495,209)	2,544,749
Net (loss)/income from discontinued operations	(20,662)	14,373	—
Net (loss)/income	(1,254,945)	(480,836)	2,544,749
Less: Net (loss)/income attributable to non-controlling interests	(5,971)	5,075	—
Net (loss)/income attributable to ordinary shareholders of Li Auto Inc.	(1,260,916)	(475,761)	2,544,749


	For the Year Ended December 31,
	2019	2020	2021
Net cash provided by inter-company transactions	—	2,194,342	7,341,282
Net cash (used in)/provided by other transactions	(1,607,435)	1,346,069	(8,693,141)
Net cash (used in)/provided by operating activities	(1,607,435)	3,540,411	(1,351,859)

Inter-company loan financing to Group companies	—	—	—
Other investing activities with external entities	(1,976,964)	(1,665,982)	(8,641,045)
Net cash used in investing activities	(1,976,964)	(1,665,982)	(8,641,045)

Inter-company loan financing from Group companies	3,782,378	795,295	14,858,966
Other financing activities with external entities	—	(144,700)	81,308
Net cash provided by financing activities	3,782,378	650,595	14,940,274
Effects of exchange rate changes on cash, cash equivalents and restricted cash	19,746	(188)	—
Net increase in cash, cash equivalents and restricted cash	217,725	2,524,836	4,947,370
Cash, cash equivalents and restricted cash at beginning of the year	37,810	255,535	2,780,371
Cash, cash equivalents and restricted cash at end of the year	255,535	2,780,371	7,727,741
Less: Cash, cash equivalents and restricted cash of discontinued operations at end of the year	147	—	—
Cash, cash equivalents and restricted cash of continuing operations at end of the year	255,388	2,780,371	7,727,741

- 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

Convertible Debts (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands	1 Months Ended								12 Months Ended
	Aug. 31, 2021 CNY (¥)	Apr. 30, 2021 CNY (¥)	Apr. 30, 2021 USD ($) $ / shares	Mar. 31, 2019 CNY (¥) shares	Jan. 31, 2019 CNY (¥) shares	Jan. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Nov. 30, 2017 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2021 USD ($)	Jun. 30, 2020 CNY (¥)	Jul. 02, 2019 CNY (¥)	Jul. 02, 2019 USD ($)	Mar. 31, 2019 USD ($)	Jan. 31, 2019 USD ($)
Debt Instrument
Non-current portion									¥ 5,960,899		¥ 511,638		$ 935,395
Proceeds from issuance of convertible debts									5,533,238	$ 868,286		¥ 168,070
Repayments of convertible debt	¥ 429,692
Debt instrument principal amount		100.00%	100.00%
Interest expense debt									21,369	3,353
Debt instrument carrying amount									5,499,041
Deferred finance costs net									101,100
Convertible Loan
Debt Instrument
Outstanding loan principal								¥ 600,000
Proceeds from issuance of convertible debts						¥ 150,000	¥ 450,000
Supplemental Agreements With Wunan
Debt Instrument
Outstanding loan principal														¥ 401,073
Interest rate (as a percent)														6.175%
Refund of prepayments of land use right														¥ 175,582
Reimbursement on certain eligible expenditures														143,838
Settlement amount of convertible loan														¥ 319,420
Non-current portion											¥ 412,921
Series B-3 Preferred Stock
Debt Instrument
Discount on purchase price											15.00%
Fair value of Series B-3 Warrant granted to convertible promissory notes				¥ 14,161
Class A Ordinary Shares
Debt Instrument
Share price \| $ / shares			$ 150.00
USD
Debt Instrument
Debt instrument convertible conversion ratio		28.34	28.34
RMB
Debt Instrument
Debt instrument convertible conversion ratio		35.2818	35.2818
Convertible Loan
Debt Instrument
Interest rate (as a percent)								8.00%
Term of short term borrowings (in years)								3 years
Convertible Promissory Notes
Debt Instrument
Outstanding loan principal				¥ 168,070	¥ 168,070											$ 25,000	$ 25,000	$ 25,000
Interest rate (as a percent)				8.00%	8.00%												8.00%	8.00%
Term of short term borrowings (in years)				12 months	12 months
Accrued interest															¥ 9,428	$ 1,376
Convertible Promissory Notes \| Series B-3 Preferred Stock
Debt Instrument
Preferred shares converted from the convertible promissory notes \| shares				11,873,086	11,873,086
Convertible Debt Matures May 1, 2028
Debt Instrument
Outstanding loan principal \| $			$ 862,500
Interest rate (as a percent)			0.25%
Proceeds from issuance of debt		¥ 5,533,238	$ 844,876
Debt instrument principal amount		100.00%	100.00%
Interest expense debt \| $										$ 3,353
Debt instrument carrying amount									5,499,041
Deferred finance costs net									¥ 101,100
Percentage of discount on share issue price		26.56%	26.56%
Convertible Debt Matures May 1, 2028 \| Class A Ordinary Shares
Debt Instrument
Debt instrument convertible conversion ratio		14.17	14.17
Convertible Debt Matures May 1, 2028 \| ADS
Debt Instrument
Debt instrument convertible conversion ratio		28.34	28.34
Convertible Debt Matures May 1, 2028 \| USD
Debt Instrument
Debt instrument convertible conversion ratio		28.34	28.34
Convertible Debt Matures May 1, 2028 \| RMB
Debt Instrument
Debt instrument convertible conversion ratio		35.2818	35.2818

Research and Development Expenses (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Research and Development Expenses.
Employee compensation	¥ 2,079,948		¥ 580,157	¥ 461,922
Design and development expenses	1,003,567		431,996	603,332
Depreciation and amortization expenses	54,110		44,977	39,648
Rental and related expenses	52,985		18,818	14,269
Travel expenses	52,307		9,360	21,815
Others	43,472		14,549	28,154
Total	¥ 3,286,389	$ 515,706	¥ 1,099,857	¥ 1,169,140

Concentration and Risks

12 Months Ended

Dec. 31, 2021

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. The maximum exposure of such assets to credit risk is their carrying amounts as of the balance sheet dates. As of December 31, 2020 and 2021, most of the Group’s cash and cash equivalents, restricted cash and time deposits and short-term investments 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 and short-term investments which are held by reputable financial institutions in the jurisdictions where the Company, its subsidiaries and 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 Company believes are of high credit quality.

(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 and time deposits and short-term investments denominated in RMB that are subject to such government controls amounted to RMB5,384,769 and RMB24,509,656 as of December 31, 2020 and 2021, 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 depreciation of the RMB against the US$ was approximately 1.6% in 2019. The appreciation of the RMB against the US$ was approximately 6.5% and 2.3%in 2020 and 2021, respectively. 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.

Accruals and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2021

Accruals and Other Current Liabilities

Schedule of accruals and other current liabilities


	As of December 31,
	2020	2021
Payables for purchase of property, plant and equipment	118,181	456,395
Salaries and benefits payable	187,972	417,449
Tax payable	50,088	277,233
Accrued warranty	55,138	154,276
Payables for logistics expenses	43,571	143,632
Payables for research and development expenses	35,032	94,517
Deposits from vendors	9,120	27,716
Advance from customers	9,285	10,262
Payables for acquisition of Chongqing Zhizao (Note 5)	79,552	2,000
Other payables	59,520	295,888
Total	647,459	1,879,368

Long-term Investments - Equity Security with Or without Readily Determinable Fair Values (Details) ¥ in Thousands, $ in Thousands			3 Months Ended	12 Months Ended
	Jan. 30, 2019 CNY (¥)	Sep. 11, 2018 CNY (¥)	Mar. 31, 2020 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥) shares	Dec. 31, 2018 USD ($) shares	Jul. 31, 2021 CNY (¥)
Equity Security with Readily Determinable Fair Values
Cost Basis				¥ 100,303	¥ 100,303
Unrealized Loss				(73,535)	(38,205)
Foreign Currency Translation				1,684	2,818
Fair Value				28,452	64,916
Total cash consideration for purchase of Series C preferred shares					65,000	¥ 98,000
Equity Securities without Readily Determinable Fair Values
Investment in affiliate				30,000	65,000	¥ 98,000
Equity interests in affiliate (as a percent)			19.82%			12.24%
Impairment				0	0	¥ 5,000
Equity method investment				¥ 0
Payments to Acquire Equity Method Investments	¥ 98,000	¥ 98,000
Equity method ownership percent	49.00%	49.00%
Disposal by sale \| SEV related business
Equity Securities without Readily Determinable Fair Values
Total consideration			¥ 60,000		60,000
Equity Securities Without Readily Determinable Fair Values
Equity Securities without Readily Determinable Fair Values
Investment in affiliate					¥ 65,000
Impairment						¥ 5,000
Suzhou Huichuan United Power System Co., Ltd
Equity Securities without Readily Determinable Fair Values
Equity method investment									¥ 76,500
Equity method ownership percent									51.00%
Changzhou Huixiang New Energy Auto Parts Co., Ltd
Equity Securities without Readily Determinable Fair Values
Equity method investment									¥ 73,500
Equity method ownership percent									49.00%
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
Equity Securities without Readily Determinable Fair Values
Investment in affiliate			¥ 60,000

Share-based Compensation - Compensation expenses (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	¥ 1,101,356	¥ 142,795
Cost of sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	26,713	1,515
Research and development expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	741,793	60,789
Selling, general and administrative expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	¥ 332,850	¥ 80,491

Share-based Compensation - Schedule of options fair value assumptions (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
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	$ 0.10	$ 0.10
Fair value of the ordinary shares on the date of grant	$ 15.78	$ 1.71	$ 0.99
Expected term (in years)	10 years	10 years	10 years
Expected dividend yield	0.00%	0.00%	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	$ 1.35	$ 0.90
Risk-free interest rate	0.93%	0.69%	1.98%
Expected volatility	47.00%	45.00%	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	$ 1.90	$ 1.45
Risk-free interest rate	1.48%	1.92%	3.17%
Expected volatility	48.00%	46.00%	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
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%

Related Party Balances and Transactions - Significant related party balances (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Related Party Balances and Transactions
Amount due from related parties	¥ 1,012		¥ 678
Amount due to related parties	37,455	$ 5,878	19,206
Neolix Technologies
Related Party Balances and Transactions
Amount due from related parties	678		678
Changzhou Huixiang
Related Party Balances and Transactions
Amount due to related parties	30,000
Beijing Sankuai
Related Party Balances and Transactions
Amount due to related parties	330
Beijing Yihang
Related Party Balances and Transactions
Amount due from related parties	334
Amount due to related parties	7,102		19,183
Airx
Related Party Balances and Transactions
Amount 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

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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
-Publisher FASB
-Name Accounting Standards Codification
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-Section S99
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+ Details

Selling, General and Administrative Expenses (Tables)

12 Months Ended

Dec. 31, 2021

Selling, General and Administrative Expenses.

Schedule of selling, general and administrative expenses


	For the Year Ended December 31,
	2019	2020	2021
Employee compensation	238,368	449,109	1,414,177
Marketing and promotional expenses	176,383	264,814	1,100,769
Rental and related expenses	78,897	162,907	324,655
Depreciation and amortization expenses	57,650	37,923	82,777
Travel expenses	20,171	20,806	69,079
Expected credit losses	—	—	6,415
Impairment of property, plant and equipment	18,066	30,381	—
Others	99,844	152,879	494,513
Total	689,379	1,118,819	3,492,385

Deferred Revenue (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
Deferred Revenue (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenue-at beginning of the year	¥ 407,168	¥ 62,638
Additions	27,377,563	9,687,382	¥ 338,702
Recognition	(27,089,986)	(9,342,852)	(276,064)
Deferred revenue-at end of the year	¥ 694,745	¥ 407,168	¥ 62,638

Leases - Supplemental balance sheet information - Finance lease (Details) ¥ in Thousands	Dec. 31, 2020 CNY (¥)
Leases
Property, plant and equipment, at cost	¥ 294,269
Accumulated depreciation	56,682
Property, plant and equipment, net	¥ 237,587
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property, Plant and Equipment, Net
Finance lease liabilities, noncurrent	¥ 366,883
Total lease liabilities	¥ 366,883

Intangible Assets, Net (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2021 USD ($)
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items]
Indefinite-lived intangible assets, net	¥ 647,174	¥ 647,174
Definite-lived intangible assets	138,270	58,791
Accumulated amortization	(33,984)	(22,684)
Definite-lived intangible assets, net	104,286	36,107
Total intangible assets, net	751,460	683,281		$ 117,920
Amortization expenses	11,300	8,985	¥ 9,218
Software
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items]
Definite-lived intangible assets	137,576	58,097
Accumulated amortization	(33,290)	(21,990)
Patents
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items]
Definite-lived intangible assets	694	694
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

Intangible Assets, Net

12 Months Ended

Dec. 31, 2021

Intangible Assets, Net

Intangible Assets, Net

10. Intangible Assets, Net

Intangible assets and related accumulated amortization were as follows:


	As of December 31,
	2020	2021
Automotive Manufacturing Permission (Note 5)	647,174	647,174
Indefinite‑lived intangible assets, net	647,174	647,174
Software	58,097	137,576
Patents	694	694
Definite‑lived intangible assets	58,791	138,270
Less: Accumulated amortization
Software	(21,990)	(33,290)
Patents	(694)	(694)
Accumulated amortization	(22,684)	(33,984)
Definite‑lived intangible assets, net	36,107	104,286
Total intangible assets, net	683,281	751,460

The Group recorded amortization expenses of RMB9,218, RMB8,985 and RMB11,300 for the years ended December 31, 2019, 2020 and 2021, respectively.

As of December 31, 2021, amortization expenses related to intangible assets for future periods are estimated to be as follows:


		As of December 31,
		2021
2022		16,540
2023		14,121
2024		11,348
2025		9,815
2026 and thereafter		52,462
Total		104,286

Organization and Nature of Operations - Cash, cash equivalents and restricted cash (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Variable interest entity
Net cash (used in)/provided by operating activities	¥ 8,340,385	$ 1,308,788	¥ 3,139,804	¥ (1,793,710)
Net cash used in investing activities	(4,257,244)	(668,054)	(18,737,725)	(2,574,836)
Net cash provided by financing activities	16,709,533	2,622,090	24,710,697	5,655,690
Effects of exchange rate changes on cash, cash equivalents and restricted cash	(472,129)	(74,086)	(376,646)	53,722
Net increase in cash, cash equivalents and restricted cash	20,320,545	3,188,738	8,736,130	1,340,866
Cash, cash equivalents and restricted cash at beginning of the year	10,172,519	1,596,290	1,436,389	95,523
Cash, cash equivalents and restricted cash at end of the year	30,493,064	4,785,028	10,172,519	1,436,389
Less: Cash, cash equivalents and restricted cash of discontinued operations at end of the year				147
Cash, cash equivalents and restricted cash of continuing operations at end of the year	30,493,064	$ 4,785,028	10,172,519	1,436,242
VIEs and VIEs' subsidiaries
Variable interest entity
Net cash (used in)/provided by operating activities	(1,351,859)		3,540,411	(1,607,435)
Net cash used in investing activities	(8,641,045)		(1,665,982)	(1,976,964)
Net cash provided by financing activities	14,940,274		650,595	3,782,378
Effects of exchange rate changes on cash, cash equivalents and restricted cash			(188)	19,746
Net increase in cash, cash equivalents and restricted cash	4,947,370		2,524,836	217,725
Cash, cash equivalents and restricted cash at beginning of the year	2,780,371		255,535	37,810
Cash, cash equivalents and restricted cash at end of the year	7,727,741		2,780,371	255,535
Less: Cash, cash equivalents and restricted cash of discontinued operations at end of the year				147
Cash, cash equivalents and restricted cash of continuing operations at end of the year	7,727,741		2,780,371	255,388
VIEs and VIEs' subsidiaries - Inter-company
Variable interest entity
Net cash (used in)/provided by operating activities	7,341,282		2,194,342
Net cash provided by financing activities	14,858,966		795,295	3,782,378
VIEs and VIEs' subsidiaries - Other
Variable interest entity
Net cash (used in)/provided by operating activities	(8,693,141)		1,346,069	(1,607,435)
Net cash used in investing activities	(8,641,045)		(1,665,982)	¥ (1,976,964)
Net cash provided by financing activities	¥ 81,308		¥ (144,700)

Discontinued Operations - Results of operations (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Results of operations
Net loss from discontinued operations, net of tax	¥ 14,373	¥ (20,662)
Discontinued Operations, Held-for-sale \| SEV related business
Results of operations
Revenues	870	9,654
Cost of sales	(2,437)	(18,981)
Gross loss	(1,567)	(9,327)
Operating expenses	(1,423)	(11,359)
Loss from operations of discontinued operations	(2,990)	(20,686)
Others, net		24
Loss from discontinued operations before income tax expense	(2,990)	(20,662)
Net loss from discontinued operations, net of tax	¥ (2,990)	¥ (20,662)

Leases - Additional information (Details) ¥ in Thousands, $ in Thousands		1 Months Ended		4 Months Ended	12 Months Ended
	Jan. 01, 2019 CNY (¥)	Jan. 31, 2022 CNY (¥)	Aug. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2021 USD ($)	Nov. 30, 2021	Sep. 11, 2018 CNY (¥)	May 01, 2017 CNY (¥)
Lessee Lease
Operating lease, right of use assets for land					¥ 2,061,492	¥ 1,277,006		$ 323,493
Financing lease, right of use assets for plants						294,269
Total rental fully paid upfront					346,757	¥ 126,418	¥ 77,643
Changzhou Chehejin
Lessee Lease
Equity interest (as a percent)									100.00%
Total consideration in cash paid					565,500
Total consideration					¥ 567,118
Changzhou Chehejin \| Subsequent Event
Lessee Lease
Total consideration in cash paid		¥ 28,491
Leading Ideal HK
Lessee Lease
Entity interest held in subsidiaries (as percent)					100.00%			100.00%
Wheels Technology
Lessee Lease
Entity interest held in subsidiaries (as percent)					100.00%			100.00%
Beijing Leading
Lessee Lease
Entity interest held in subsidiaries (as percent)					100.00%			100.00%
Jiangsu CHJ
Lessee Lease
Entity interest held in subsidiaries (as percent)					100.00%			100.00%
Jiangsu XD
Lessee Lease
Entity interest held in subsidiaries (as percent)					100.00%			100.00%
Changzhou Chehejin
Lessee Lease
Entity interest held in subsidiaries (as percent)					100.00%			100.00%
Business combination recognized identifiable assets acquired and liabilities assumed property plant and equipment					¥ 47,876
Changzhou Production Base-Phase I
Lessee Lease
Operating lease, right of use assets for land											¥ 70,508
Financing lease, right of use assets for plants											¥ 310,018
Changzhou Production Base-Phase II
Lessee Lease
Operating lease, right of use assets for land										¥ 23,080
Total rental fully paid upfront				¥ 24,420
Total amount of construction of Phase II Plants	¥ 102,251
Total consideration			¥ 103,060
Option to repurchase asset transferred prior to December 31, 2020, amount			¥ 103,060

Summary of Significant Accounting Policies - Product warranties, current and non-current and Revenue recognition (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Summary of Significant Accounting Policies
Accrued warranty	¥ 842,345	¥ 233,366	¥ 6,996
Including: Accrued warranty, current	154,276	55,138	1,477
Accrued warranty, non-current	¥ 688,069	¥ 178,228	¥ 5,519
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true false]	true

Inventories (Tables)

12 Months Ended

Dec. 31, 2021

Inventories

Summary of inventories


	As of December 31,
	2020	2021
Raw materials, work in process and supplies	227,836	1,468,801
Finished products	820,168	149,089
Total	1,048,004	1,617,890

Loss Per Share

12 Months Ended

Dec. 31, 2021

Loss Per Share

Loss Per Share

25. Loss Per Share

Basic loss per share and diluted loss per share have been calculated in accordance with ASC 260 for the years ended December 31, 2019, 2020 and 2021 as follows:


	For the Year Ended December 31,
	2019	2020	2021
Numerator:
Net loss	(2,438,536)	(151,657)	(321,455)
Accretion on convertible redeemable preferred shares to redemption value	(743,100)	(651,190)	—
Deemed dividend to preferred shareholders upon extinguishment, net	(217,362)	—	—
Effect of exchange rate changes on convertible redeemable preferred shares	117,391	10,862	—
Net loss attributable to ordinary shareholders of Li Auto Inc.	(3,281,607)	(791,985)	(321,455)
Including: Net loss from continuing operations attributable to ordinary shareholders of Li Auto Inc.	(3,260,945)	(806,358)	(321,455)
Net (loss)/income from discontinued operations attributable to ordinary shareholders of Li Auto Inc.	(20,662)	14,373	—

Denominator:
Weighted average ordinary shares outstanding—basic and diluted	255,000,000	870,003,278	1,853,320,448

Basic and diluted net loss per share from continuing operations attributable to ordinary shareholders of Li Auto Inc.	(12.79)	(0.93)	(0.17)
Basic and diluted net (loss)/income per share from discontinued operations attributable to ordinary shareholders of Li Auto Inc.	(0.08)	0.02	—
Basic and diluted net loss per share attributable to ordinary shareholders of Li Auto Inc.	(12.87)	(0.91)	(0.17)

For the years ended December 31, 2019, 2020 and 2021, the Company had ordinary equivalent shares, including preferred shares, options granted, unsecured corporate loan issued in November 2017 and convertible debt issued in April 2021 (Note 17). As the Group incurred loss for the years ended December 31, 2019, 2020 and 2021, these ordinary equivalent shares were anti-dilutive and excluded from the calculation of diluted loss per share of the Company. The weighted average numbers of preferred shares, options granted, unsecurred corporate loan and convertible debt excluded from the calculation of diluted loss per share of the Company were 669,666,355, 54,605,925, 22,639,154 and nil for the year ended December 31, 2020 and nil, 72,791,430, nil and 44,853,801 for the year ended December 31, 2021, respectively.

Revenue Disaggregation

12 Months Ended

Dec. 31, 2021

Revenue Disaggregation

Revenue Disaggregation

18. Revenue Disaggregation

Revenues by source consist of the following:


	For the Year Ended December 31,
	2019	2020	2021
Vehicle sales	280,967	9,282,703	26,128,469
Other sales and services	3,400	173,906	881,310
Total	284,367	9,456,609	27,009,779

18. Revenue Disaggregation (Continued)

Revenue by timing of recognition is analyzed as follows:


	For the Year Ended December 31,
	2019	2020	2021
Revenue recognized at a point in time	284,195	9,436,095	26,917,836
Including: Vehicle sales	280,967	9,282,703	26,128,469
Other sales and services	3,228	153,392	789,367
Revenue recognized over time	172	20,514	91,943
Total	284,367	9,456,609	27,009,779

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 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 which revenue are 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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
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-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

Ordinary Shares (Details) ¥ in Thousands, $ in Thousands, $ in Thousands			1 Months Ended							12 Months Ended
	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	Dec. 31, 2021 CNY (¥) shares	Dec. 31, 2021 USD ($) shares
Ordinary Shares
Class B to Class A Ordinary Shares, Conversion Ratio									1
Cash paid										¥ 70	$ 11
Number of shares issued (in shares)							1,809,288,310			1,929,562,426	1,929,562,426
Number of shares outstanding (in shares)							1,809,288,310			1,929,562,426	1,929,562,426
Issuance of ordinary shares as treasury shares ( Shares)										6,404,416	6,404,416
Over-allotment option
Ordinary Shares
Net proceeds \| $				$ 11,633,130
Follow-on offering
Ordinary Shares
Net proceeds \| $			$ 1,634,462
Class A Ordinary Shares
Ordinary Shares
Ordinary shares, shares authorized							4,000,000,000		3,830,157,186	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)				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)							1,453,476,230			1,709,903,330	1,709,903,330
Number of shares outstanding (in shares)							1,453,476,230			1,573,750,346	1,573,750,346
Issuance of ordinary shares as treasury shares ( Shares)			13,869,700			34,000,000
Class A Ordinary Shares \| IPO
Ordinary Shares
Share issuance, net of issuance costs (in shares)								190,000,000
Net proceeds \| $								$ 1,042,137
Shares issued upon conversion of preferred shares (in shares)								1,045,789,275
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
Number of votes entitled \| Vote									10
Number of shares issued (in shares)							355,812,080			355,812,080	355,812,080
Number of shares outstanding (in shares)							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
Class B Ordinary Shares \| IPO
Ordinary Shares
Shares issued upon conversion of preferred shares (in shares)								115,812,080
Series PreA shares \| Beijing CHJ
Ordinary Shares
Cash paid \| ¥		¥ 100,000

Trade receivable (Tables)

12 Months Ended

Dec. 31, 2021

Trade receivable

Schedule of aging analysis of trade receivable


	As of December 31,
	2020	2021
Within 3 months	10,429	16,462
Between 3 months and 6 months	18,914	890
Between 6 months and 1 year	77,903	—
More than 1 year	8,303	103,189
Total	115,549	120,541

Property, Plant and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment, Net.

Summary of property, plant and equipment and related accumulated depreciation


	As of December 31,
	2020	2021
Construction in process ⁽ⁱ⁾	53,579	1,942,953
Mold and tooling	987,316	1,098,392
Production facilities	787,970	804,281
Leasehold improvements	249,879	660,902
Buildings	404,772	409,123
Buildings improvements	311,947	297,163
Equipment	175,887	266,745
Motor vehicles	36,409	59,702
Total	3,007,759	5,539,261
Less: Accumulated depreciation	(498,691)	(983,222)
Less: Accumulated impairment loss ⁽ⁱⁱ⁾	(30,381)	(57,770)
Total property, plant and equipment, net	2,478,687	4,498,269

The Group recorded depreciation expenses of RMB107,173, RMB312,011 and RMB579,097 for the years ended December 31, 2019, 2020 and 2021, respectively.

(i)

Construction in process is primarily comprised of production facilities, equipment and mold and tooling related to manufacturing of the extended-range eletric 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 in a construction and expansion project of an automobile manufacturing plant in Shunyi District, Beijing with an enterprise affiliated with Beijing local government. In October 2021, the Group officially commenced construction of Beijing Manufacturing Base which is scheduled to be operational in 2023. As of December 31, 2021, RMB149,098 of contruction in process and RMB11,606 of other non‑current assets, and along with RMB93,701 of other non-current liabilities were recognized in the consolidated balance sheet.

(ii)

Impairments of RMB18,066, RMB30,381 and RMB27,389 were recognized for property, plant and equipment for the years ended December 31, 2019, 2020 and 2021, respectively. As of December 31, 2019, the Group made a full impairment provision on the production facilities and leasehold improvements in connection with the production of electric battery as the Group determined to terminate the design, development and self-production of electric battery via one of the Group’s subsidiaries.

Furthermore, the Group launched 2021 Li ONE in May 2021, consequently, the production volume of the first model Li ONE is expected to gradually decrease in line with sales volume. As of December 31, 2021, the Group recorded an impairment loss on the production facilities and mold and tooling in connection with the production of the first model Li ONE accordingly as the carrying value of these assets are not expected to be recovered in the foreseeable future. The impairment loss for the year ended December 31, 2021 is immaterial.

Long term Investments (Tables)

12 Months Ended

Dec. 31, 2021

Long-term Investments.

Schedule of long-term investments


		Equity Security With	Equity Securities Without
		Readily Determinable	Readily Determinable Fair
	Equity Method	Fair Values	Values	Total
Balance at December 31, 2018	66,538	77,453	33,150	177,141
Additions	98,000	—	—	98,000
Shares of loss of equity method investees	(162,725)	—	—	(162,725)
Fair value change through earnings	—	12,550	—	12,550
Changes of interest in the equity method investees	5,494	—	—	5,494
Impairment	—	—	(5,000)	(5,000)
Foreign currency translation	—	721	—	721
Balance at December 31, 2019	7,307	90,724	28,150	126,181
Additions	—	—	65,000	65,000
Shares of loss of equity method investees	(2,520)	—	—	(2,520)
Fair value change through earnings	—	(21,975)	—	(21,975)
Foreign currency translation	—	(3,833)	—	(3,833)
Balance at December 31, 2020	4,787	64,916	93,150	162,853
Additions	30,000	—	—	30,000
Shares of loss of equity method investees	(83)	—	—	(83)
Fair value change through earnings	—	(35,330)	—	(35,330)
Foreign currency translation	—	(1,134)	—	(1,134)
Balance at December 31, 2021	34,704	28,452	93,150	156,306

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, 2020	100,303	(38,205)	2,818	64,916
As of December 31, 2021	100,303	(73,535)	1,684	28,452

Ordinary Shares

12 Months Ended

Dec. 31, 2021

Ordinary Shares

Ordinary Shares

23. 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.

23. 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 December 31, 2021, 6,404,416 share options that fulfilled the vesting conditions were exercised.

As of December 31, 2020 and 2021, the Company had issued and outstanding ordinary shares of 1,809,288,310 and 1,929,562,426, 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
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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+ Details

Convertible Redeemable Preferred Shares and Warrants - Convertible redeemable preferred shares activities (Details) - CNY (¥) ¥ in Thousands							1 Months Ended	6 Months Ended	12 Months Ended
	Jul. 01, 2020	Jun. 06, 2018	Nov. 28, 2017	Sep. 05, 2017	Jul. 21, 2017	Jul. 04, 2016	Jan. 23, 2020	Jul. 02, 2019	Dec. 31, 2020	Dec. 31, 2019
Convertible redeemable preferred shares activities
Beginning balance							¥ 10,255,662		¥ 10,255,662	¥ 5,199,039
Beginning balance (in shares)							910,926,266		910,926,266	535,544,931
Issuance of preferred shares									¥ 3,603,655
Issuance of preferred shares (in shares)									231,758,541
Accretion on convertible redeemable preferred shares to redemption value									¥ 651,190	¥ 743,100
Conversion of convertible promissory notes into Series B3 Preferred Shares										¥ 166,549
Conversion of convertible promissory notes into Series B3 Preferred Shares (in shares)										11,873,086
Deemed dividend to/(contribution from) preferred shareholders upon extinguishment										¥ 217,362
Exercise of Series B-3 Anti-Dilution Warrant									¥ 305,333
Exercise of Series B-3 Anti-Dilution Warrant (in shares)									18,916,548
Bifurcation of conversion feature									¥ (81,082)	(1,066,013)
Effect of exchange rate changes on preferred shares									(10,862)	(117,391)
Conversion of preferred shares to ordinary shares									¥ (14,723,896)
Conversion of preferred shares to ordinary shares (in shares)									(1,161,601,355)
Ending balance										¥ 10,255,662
Ending balance (in shares)										910,926,266
Series Pre-A convertible redeemable preferred shares
Convertible redeemable preferred shares activities
Beginning balance							¥ 434,886		¥ 434,886	¥ 175,847
Beginning balance (in shares)							50,000,000		50,000,000	50,000,000
Issuance of preferred shares (in shares)					50,000,000
Deemed dividend to/(contribution from) preferred shareholders upon extinguishment										¥ 281,638
Bifurcation of conversion feature										(14,549)
Effect of exchange rate changes on preferred shares									¥ (858)	(8,050)
Conversion of preferred shares to ordinary shares									¥ (434,028)
Conversion of preferred shares to ordinary shares (in shares)									(50,000,000)
Ending balance										¥ 434,886
Ending balance (in shares)										50,000,000
Series A1 convertible redeemable preferred shares
Convertible redeemable preferred shares activities
Beginning balance							¥ 980,949		¥ 980,949	¥ 907,658
Beginning balance (in shares)							129,409,092		129,409,092	129,409,092
Issuance of preferred shares (in shares)						129,409,092
Accretion on convertible redeemable preferred shares to redemption value									¥ 34,229	¥ 60,249
Deemed dividend to/(contribution from) preferred shareholders upon extinguishment										284,655
Bifurcation of conversion feature										(254,121)
Effect of exchange rate changes on preferred shares									(1,746)	(17,492)
Conversion of preferred shares to ordinary shares									¥ (1,013,432)
Conversion of preferred shares to ordinary shares (in shares)									(129,409,092)
Ending balance										¥ 980,949
Ending balance (in shares)										129,409,092
Series A2 convertible redeemable preferred shares
Convertible redeemable preferred shares activities
Beginning balance							¥ 1,074,959		¥ 1,074,959	¥ 1,099,816
Beginning balance (in shares)							126,771,562		126,771,562	126,771,562
Issuance of preferred shares (in shares)					126,771,562
Accretion on convertible redeemable preferred shares to redemption value									¥ 63,363	¥ 90,077
Deemed dividend to/(contribution from) preferred shareholders upon extinguishment										115,806
Bifurcation of conversion feature										(212,055)
Effect of exchange rate changes on preferred shares									(1,770)	(18,685)
Conversion of preferred shares to ordinary shares									¥ (1,136,552)
Conversion of preferred shares to ordinary shares (in shares)									(126,771,562)
Ending balance										¥ 1,074,959
Ending balance (in shares)										126,771,562
Series A3 convertible redeemable preferred shares
Convertible redeemable preferred shares activities
Beginning balance							¥ 619,770		¥ 619,770	¥ 676,458
Beginning balance (in shares)							65,498,640		65,498,640	65,498,640
Issuance of preferred shares (in shares)				65,498,640
Accretion on convertible redeemable preferred shares to redemption value									¥ 46,738	¥ 61,299
Deemed dividend to/(contribution from) preferred shareholders upon extinguishment										(15,139)
Bifurcation of conversion feature										(92,256)
Effect of exchange rate changes on preferred shares									(964)	(10,592)
Conversion of preferred shares to ordinary shares									¥ (665,544)
Conversion of preferred shares to ordinary shares (in shares)									(65,498,640)
Ending balance										¥ 619,770
Ending balance (in shares)										65,498,640
Series B1 convertible redeemable preferred shares
Convertible redeemable preferred shares activities
Beginning balance							¥ 1,347,607		¥ 1,347,607	¥ 1,621,561
Beginning balance (in shares)							115,209,526		115,209,526	115,209,526
Issuance of preferred shares (in shares)			115,209,526
Accretion on convertible redeemable preferred shares to redemption value									¥ 136,567	¥ 164,540
Deemed dividend to/(contribution from) preferred shareholders upon extinguishment										(310,359)
Bifurcation of conversion feature										(105,702)
Effect of exchange rate changes on preferred shares									(1,899)	(22,433)
Conversion of preferred shares to ordinary shares									¥ (1,482,275)
Conversion of preferred shares to ordinary shares (in shares)									(115,209,526)
Ending balance										¥ 1,347,607
Ending balance (in shares)										115,209,526
Series B2 convertible redeemable preferred shares
Convertible redeemable preferred shares activities
Beginning balance							¥ 710,303		¥ 710,303	¥ 717,699
Beginning balance (in shares)							55,804,773		55,804,773	48,656,111
Issuance of preferred shares (in shares)		55,804,773
Accretion on convertible redeemable preferred shares to redemption value									¥ 64,859	¥ 80,891
Deemed dividend to/(contribution from) preferred shareholders upon extinguishment										(130,312)
Bifurcation of conversion feature										(47,231)
Effect of exchange rate changes on preferred shares									(1,040)	(11,944)
Conversion of preferred shares to ordinary shares									¥ (774,122)
Conversion of preferred shares to ordinary shares (in shares)									(55,804,773)
Ending balance										¥ 710,303
Ending balance (in shares)										55,804,773
Series B3 convertible redeemable preferred shares
Convertible redeemable preferred shares activities
Beginning balance							¥ 1,551,080		¥ 1,551,080
Beginning balance (in shares)							119,950,686		119,950,686
Issuance of preferred shares										¥ 1,395,015
Issuance of preferred shares (in shares)								119,950,686		108,077,600
Accretion on convertible redeemable preferred shares to redemption value									¥ 80,635	¥ 133,798
Conversion of convertible promissory notes into Series B3 Preferred Shares										¥ 166,549
Conversion of convertible promissory notes into Series B3 Preferred Shares (in shares)										11,873,086
Deemed dividend to/(contribution from) preferred shareholders upon extinguishment										¥ (8,927)
Bifurcation of conversion feature										(108,190)
Effect of exchange rate changes on preferred shares									(2,613)	(27,165)
Conversion of preferred shares to ordinary shares									¥ (1,629,102)
Conversion of preferred shares to ordinary shares (in shares)									(119,950,686)
Ending balance										¥ 1,551,080
Ending balance (in shares)										119,950,686
Series C Convertible Redeemable Preferred Shares
Convertible redeemable preferred shares activities
Beginning balance							¥ 3,536,108		¥ 3,536,108
Beginning balance (in shares)							248,281,987		248,281,987
Issuance of preferred shares										¥ 3,616,801
Issuance of preferred shares (in shares)							267,198,535			248,281,987
Accretion on convertible redeemable preferred shares to redemption value									¥ 178,007	¥ 152,246
Exercise of Series B-3 Anti-Dilution Warrant									¥ 305,333
Exercise of Series B-3 Anti-Dilution Warrant (in shares)									18,916,548
Bifurcation of conversion feature									¥ (81,082)	(231,909)
Effect of exchange rate changes on preferred shares									28	(1,030)
Conversion of preferred shares to ordinary shares									¥ (3,938,394)
Conversion of preferred shares to ordinary shares (in shares)									(267,198,535)
Ending balance										¥ 3,536,108
Ending balance (in shares)										248,281,987
Series D Convertible Redeemable Preferred Shares
Convertible redeemable preferred shares activities
Issuance of preferred shares									¥ 3,603,655
Issuance of preferred shares (in shares)	231,758,541								231,758,541
Accretion on convertible redeemable preferred shares to redemption value									¥ 46,792
Conversion of preferred shares to ordinary shares									¥ (3,650,447)
Conversion of preferred shares to ordinary shares (in shares)									(231,758,541)

Accruals and Other Current Liabilities (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Accruals and Other Current Liabilities
Payables for purchase of property, plant and equipment	¥ 456,395		¥ 118,181
Salaries and benefits payable	417,449		187,972
Tax payable	277,233		50,088
Accrued warranty	154,276		55,138	¥ 1,477
Payables for logistics expenses	143,632		43,571
Payables for research and development expenses	94,517		35,032
Deposits from vendors	27,716		9,120
Advance from customers	10,262		9,285
Payables for acquisition of Chongqing Zhizao (Note 5)	2,000		79,552
Other payables	295,888		59,520
Total	¥ 1,879,368	$ 294,914	¥ 647,459

Fair Value Measurement - Assets and liabilities measured at fair value on a recurring basis (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Assets
Equity securities with readily determinable fair value	¥ 28,452	¥ 64,916
Recurring
Assets
Short-term investments	19,157,428	18,850,462
Equity securities with readily determinable fair value	28,452	64,916
Total assets	19,185,880	18,915,378
Recurring \| Level 1
Assets
Equity securities with readily determinable fair value	28,452	64,916
Total assets	28,452	64,916
Recurring \| Level 2
Assets
Short-term investments	19,157,428	18,850,462
Total assets	¥ 19,157,428	¥ 18,850,462

Long-term Investments- Equity Method Investments (Details) - CNY (¥) ¥ in Thousands			1 Months Ended	12 Months Ended
	Jan. 30, 2019	Sep. 11, 2018	Jan. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Jul. 31, 2021
Long Term Investments, Disclosure [Line Items]
Equity method ownership percent	49.00%	49.00%
Cash consideration	¥ 98,000	¥ 98,000
Equity method investment				¥ 0
Impairment of equity method investments				¥ 0	¥ 0	¥ 0
Changzhou Huixiang New Energy Auto Parts Co., Ltd
Long Term Investments, Disclosure [Line Items]
Cash consideration			¥ 30,000
Equity method investment							¥ 73,500
Investee A
Long Term Investments, Disclosure [Line Items]
Ownership percent		51.00%

Subsequent Event

12 Months Ended

Dec. 31, 2021

Subsequent Event

Subsequent Event

33. Subsequent Event

In December 2021, one of the Group’s subsidiaries, entered into an agreement to invest a 70% equity interest in a joint venture (another shareholder holding the remaining 30% equity interest) established to design, produce and sell automotive power module and electronics products. In April 2022, this transaction was closed (cash consideration in the amount of RMB210,000) and the Group obtained control over the joint venture. Upon obtaining contol, the Group consolidated the joint venture with a non-controlling interest.

33. Subsequent Event (Continued)

In March 2022, one of the Group’s subsidiaries, entered into an agreement with Xin Wang Da Eletronic Limited (“Xin Wang Da Eletronic”) to purchase certain series Pre-A preferred shares of Xin Wang Da Electric Vehicle and Battery Limited, a subsidiary of Xin Wang Da Eletronic. This tranaction (cash consideration in the amount of RMB400,000), resulted in the Group’s approximately 3.2% equity ownership in the Xin Wang Da Electric Vehicle and Battery Limited. The Group accounted for the investment using the measurement alternative, recording the investment at cost, adjusted for subsequent observable price changes and impairments, if any.

Restricted Net Assets (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
Restricted Net Assets (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Statutory Reserves [Line Items]
Restricted net assets	¥ 11,417,468	¥ 7,644,467
PRC
Statutory Reserves [Line Items]
Required minimum percentage of annual appropriations to general reserve fund or statutory surplus fund	10.00%
PRC \| General reserve fund
Statutory Reserves [Line Items]
Required minimum percentage of annual appropriations to general reserve fund	10.00%
Maximum percentage of statutory general reserve related to entity's registered capital	50.00%
PRC \| Statutory surplus reserve
Statutory Reserves [Line Items]
Required minimum percentage of annual appropriations to statutory surplus fund	10.00%
Maximum percentage of statutory surplus reserve related to entity's registered capital	50.00%

Organization and Nature of Operations - Reorganization (Details)	Dec. 31, 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%
Jiangsu CHJ
Principal subsidiaries, consolidated VIEs and VIEs' subsidiaries
Entity interest held in subsidiaries (as percent)	100.00%
Lixiang Zhizao Automobile Sales & Services (Beijing) Co., Ltd
Principal subsidiaries, consolidated VIEs and VIEs' subsidiaries
Entity interest held in subsidiaries (as percent)	100.00%
Lixiang Zhixing Automobile Sales & Services (Shanghai) Co., Ltd
Principal subsidiaries, consolidated VIEs and VIEs' subsidiaries
Entity interest held in subsidiaries (as percent)	100.00%
Lixiang Zhizao Automobile Sales & Services (Chengdu) Co., Ltd
Principal subsidiaries, consolidated VIEs and VIEs' subsidiaries
Entity interest held in subsidiaries (as percent)	100.00%

Summary of Significant Accounting Policies - Property, plant and equipment, net (Details)	12 Months Ended
	Dec. 31, 2021
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)	5 years
Minimum \| Equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	3 years
Minimum \| Vehicle sales
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 \| Vehicle sales
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	4 years

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT)/DEFICIT ¥ in Thousands, $ in Thousands	Treasury Shares CNY (¥) shares	Ordinary Shares Class A Ordinary Shares IPO and concurrent private placement CNY (¥) shares	Ordinary Shares Class A Ordinary Shares Follow-on offering CNY (¥) shares	Ordinary Shares Class A Ordinary Shares CNY (¥) shares	Ordinary Shares Class B Ordinary Shares CNY (¥) shares	Additional Paid-in Capital IPO and concurrent private placement CNY (¥)	Additional Paid-in Capital Follow-on 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 (¥)	Cumulative effect of adoption of credit loss guidance CNY (¥)	Class A Ordinary Shares shares	Class B Ordinary Shares shares	IPO and concurrent private placement CNY (¥)	Follow-on offering CNY (¥)	CNY (¥) shares	USD ($) shares
Balance at the beginning of period at Dec. 31, 2018				¥ 10	¥ 155				¥ 12,693		¥ (2,408,633)						¥ (2,395,775)
Balance at the beginning of period (in shares) at Dec. 31, 2018 \| shares				15,000,000	240,000,000
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT)/EQUITY
Accretion on convertible redeemable preferred shares to redemption value											(743,100)						(743,100)
Effect of exchange rate changes on convertible redeemable preferred shares											117,391						117,391
Foreign currency translation adjustment, net of tax									2,851								2,851
Deemed dividend to preferred shareholders upon extinguishment, net											(217,362)						(217,362)
Net loss											(2,438,536)						(2,438,536)
Balance at the end of period at Dec. 31, 2019				¥ 10	¥ 155				15,544		(5,690,240)						(5,674,531)
Balance at the end of period (in shares) at Dec. 31, 2019 \| shares				15,000,000	240,000,000
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT)/EQUITY
Accretion on convertible redeemable preferred shares to redemption value											(651,190)						(651,190)
Effect of exchange rate changes on convertible redeemable preferred shares											10,862						10,862
Foreign currency translation adjustment, net of tax									(1,020,728)								(1,020,728)
Share issuance, net of issuance costs		¥ 199	¥ 71			¥ 11,023,348	¥ 9,999,862								¥ 11,023,547	¥ 9,999,933
Share issuance, net of issuance costs (in shares) \| shares		284,586,955	108,100,000
Share issuance upon the conversion and re-designation of preferred shares into Class A and Class B ordinary shares				¥ 730	¥ 80			¥ 14,723,086									14,723,896
Share issuance upon the conversion and re-designation of preferred shares into Class A and Class B ordinary shares (in shares) \| shares				1,045,789,275	115,812,080
Exercise of conversion features of preferred shares upon the consummation of US IPO								1,400,670									1,400,670
Share-based compensation								142,795									142,795
Net loss											(151,657)						(151,657)
Balance at the end of period at Dec. 31, 2020				¥ 1,010	¥ 235			37,289,761	(1,005,184)	¥ (1,955)	(6,482,225)	¥ (1,955)					¥ 29,803,597
Balance at the end of period (in shares) at Dec. 31, 2020 \| shares				1,453,476,230	355,812,080								1,453,476,230	355,812,080			1,809,288,310	1,809,288,310
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT)/EQUITY
Accretion on convertible redeemable preferred shares to redemption value																	¥ 0
Foreign currency translation adjustment, net of tax									(516,687)								(516,687)	$ (81,079)
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
Issuance of ordinary shares as treasury shares	¥ (22)			¥ 22
Issuance of ordinary shares as treasury shares ( Shares) \| shares	(34,000,000)			34,000,000													6,404,416	6,404,416
Issuance of ordinary shares for granting Award Shares to CEO	¥ (70)			¥ 70				70									¥ 70
Issuance of ordinary shares for granting Award Shares to CEO (Shares) \| shares	(108,557,400)			108,557,400
Exercise of share options	¥ 3							4,086									4,089
Exercise of share options (Shares) \| shares	6,404,416
Share-based compensation								1,101,356									1,101,356
Net loss											(321,455)						(321,455)	$ (50,442)
Balance at the end of period at Dec. 31, 2021	¥ (89)			¥ 1,176	¥ 235			¥ 49,390,486	¥ (1,521,871)		¥ (6,805,635)						¥ 41,064,302	$ 6,443,885
Balance at the end of period (in shares) at Dec. 31, 2021 \| shares	(136,152,984)			1,709,903,330	355,812,080								1,709,903,330	355,812,080			1,929,562,426	1,929,562,426

Property, Plant and Equipment, Net

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment, Net.

Property, Plant and Equipment, Net

9. Property, Plant and Equipment, Net

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


	As of December 31,
	2020	2021
Construction in process ⁽ⁱ⁾	53,579	1,942,953
Mold and tooling	987,316	1,098,392
Production facilities	787,970	804,281
Leasehold improvements	249,879	660,902
Buildings	404,772	409,123
Buildings improvements	311,947	297,163
Equipment	175,887	266,745
Motor vehicles	36,409	59,702
Total	3,007,759	5,539,261
Less: Accumulated depreciation	(498,691)	(983,222)
Less: Accumulated impairment loss ⁽ⁱⁱ⁾	(30,381)	(57,770)
Total property, plant and equipment, net	2,478,687	4,498,269

The Group recorded depreciation expenses of RMB107,173, RMB312,011 and RMB579,097 for the years ended December 31, 2019, 2020 and 2021, respectively.

(i)

(ii)

Research and Development Expenses

12 Months Ended

Dec. 31, 2021

Research and Development Expenses.

Research and Development Expenses

20. Research and Development Expenses

Research and development expenses consist of the following:


	For the Year Ended December 31,
	2019	2020	2021
Employee compensation	461,922	580,157	2,079,948
Design and development expenses	603,332	431,996	1,003,567
Depreciation and amortization expenses	39,648	44,977	54,110
Rental and related expenses	14,269	18,818	52,985
Travel expenses	21,815	9,360	52,307
Others	28,154	14,549	43,472
Total	1,169,140	1,099,857	3,286,389

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Summary of Significant Accounting Policies

Schedule of cash, cash equivalents and restricted cash


	As of December 31,
	2020	2021
Cash and cash equivalents	8,938,341	27,854,224
Restricted cash	1,234,178	2,638,840
Total cash, cash equivalents and restricted cash	10,172,519	30,493,064

Schedule of estimated useful lives of property, plant and equipment


		Useful Lives
Buildings		20 years
Buildings improvements		5 to 10 years
Production facilities		5 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 estimated useful lives of intangible assets


		Useful Lives
Software and Patents		5 to 10 years

Schedule of accrued warranty activity


	For the Year Ended December 31,
	2019	2020	2021
Accrued warranty at beginning of the year	—	6,996	233,366
Warranty cost incurred	(163)	(8,258)	(22,558)
Provision for warranty	7,159	234,628	631,537
Accrued warranty at end of the year	6,996	233,366	842,345
Including: Accrued warranty, current	1,477	55,138	154,276
Accrued warranty, non-current	5,519	178,228	688,069

Schedule of accounts notes loans and financing receivable


		For the year ended
		December 31, 2021
Balance as of December 31, 2020		—
Impact of adoption of ASC 326		1,955
Balance as of January 1, 2021		1,955
Provisions		6,415
Write-offs		(1,954)
Balance as of December 31, 2021		6,416

Leases - Maturities of lease liabilities (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Operating leases
2022	¥ 473,477
2023	372,077
2024	242,358
2025	178,605
2026	155,296
Thereafter	953,835
Total undiscounted lease payments	2,375,648
Less: imputed interest	(532,578)
Total lease liabilities	¥ 1,843,070	¥ 1,235,784
Finance leases
Total lease liabilities		¥ 366,883

Intangible Assets, Net - Amortization expenses (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Intangible assets, net
2022	¥ 16,540
2023	14,121
2024	11,348
2025	9,815
2026 and thereafter	52,462
Definite-lived intangible assets, net	¥ 104,286	¥ 36,107

Leases - Components of lease expenses (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Finance lease cost:
Amortization of assets	¥ 12,122	¥ 15,346	¥ 15,501
Interest of lease liabilities	19,322	21,851	19,943
Operating lease cost	367,375	176,788	86,365
Short-term lease cost	15,559	4,937	6,801
Total	¥ 414,378	¥ 218,922	¥ 128,610

Acquisition of Chongqing Zhizao - Disposal agreement (Details) - Chongqing Zhizao - Disposal by sale - CNY (¥)	Dec. 26, 2019	Dec. 19, 2019
Discontinued Operations
Equity interest disposed	100.00%	100.00%
Cash consideration received for sale of SEV battery packs business		¥ 1.000
Disposal loss	¥ 4,503,000

Summary of Significant Accounting Policies - Intangible assets, net, Impairment of long lived assets and intangible assets with indefinite lives and Employee benefits (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Impairment of long-lived assets	¥ 27,389	¥ 30,381	¥ 18,066
Employee benefits
Employee benefit expenses	¥ 482,536	¥ 133,162	¥ 168,019
Software and Patents \| Minimum
Finite-Lived Intangible Assets [Line Items]
Intangible asset, useful lives	5 years
Software and Patents \| Maximum
Finite-Lived Intangible Assets [Line Items]
Intangible asset, useful lives	10 years

Convertible Redeemable Preferred Shares and Warrants - Movement of the Warrants and conversion feature derivative liabilities (Details) - CNY (¥) ¥ in Thousands	1 Months Ended	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Movement of the Warrants and conversion feature derivative liabilities
Beginning balance			¥ 1,648,690
Issuance			328,461	¥ 1,240,859
Fair value change			(272,327)	504,164
Exercise			(1,706,003)	(45,858)
Expire				(77,739)
Translation to reporting currency			1,179	27,264
Ending balance	¥ 1,648,690			1,648,690
Series B3 convertible redeemable preferred shares
Movement of the Warrants and conversion feature derivative liabilities
Discount on purchase price	15.00%	15.00%
Warrant liabilities
Movement of the Warrants and conversion feature derivative liabilities
Beginning balance			351,750
Issuance				174,846
Fair value change			(46,812)	292,305
Exercise			(305,333)	(45,858)
Expire				(77,739)
Translation to reporting currency			395	8,196
Ending balance	¥ 351,750			351,750
Derivative liabilities
Movement of the Warrants and conversion feature derivative liabilities
Beginning balance			1,296,940
Issuance			328,461	1,066,013
Fair value change			(225,515)	211,859
Exercise			(1,400,670)
Translation to reporting currency			¥ 784	19,068
Ending balance	¥ 1,296,940			¥ 1,296,940

Loss Per Share - Additional information (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share
Weighted average numbers of shares excluded from the calculation of diluted loss per share	44,853,801	0
Preferred shares
Antidilutive Securities Excluded from Computation of Earnings Per Share
Weighted average numbers of shares excluded from the calculation of diluted loss per share	0	669,666,355
Options granted
Antidilutive Securities Excluded from Computation of Earnings Per Share
Weighted average numbers of shares excluded from the calculation of diluted loss per share	72,791,430	54,605,925
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	0	22,639,154

Summary of Significant Accounting Policies - Leases and Segment reporting (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥) segment	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2017 CNY (¥)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets, net	¥ 2,061,492	$ 323,493	¥ 1,277,006
Operating lease liabilities, current	473,245	74,262	210,531
Operating lease liabilities, noncurrent	¥ 1,369,825	$ 214,955	¥ 1,025,253
Number of reportable segments \| segment	1
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Terms of operating and finance leases (in years)	1 year
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Terms of operating and finance leases (in years)	20 years
Land use rights
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease term (in years)	50 years	50 years
ASU 2016-02 \| Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets, net				¥ 158,770
Operating lease liabilities, current				14,575
Operating lease liabilities, noncurrent				¥ 142,751

Long-term Investments

12 Months Ended

Dec. 31, 2021

Long-term Investments.

Long-term Investments

13. Long-term Investments

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


		Equity Security With	Equity Securities Without
		Readily Determinable	Readily Determinable Fair
	Equity Method	Fair Values	Values	Total
Balance at December 31, 2018	66,538	77,453	33,150	177,141
Additions	98,000	—	—	98,000
Shares of loss of equity method investees	(162,725)	—	—	(162,725)
Fair value change through earnings	—	12,550	—	12,550
Changes of interest in the equity method investees	5,494	—	—	5,494
Impairment	—	—	(5,000)	(5,000)
Foreign currency translation	—	721	—	721
Balance at December 31, 2019	7,307	90,724	28,150	126,181
Additions	—	—	65,000	65,000
Shares of loss of equity method investees	(2,520)	—	—	(2,520)
Fair value change through earnings	—	(21,975)	—	(21,975)
Foreign currency translation	—	(3,833)	—	(3,833)
Balance at December 31, 2020	4,787	64,916	93,150	162,853
Additions	30,000	—	—	30,000
Shares of loss of equity method investees	(83)	—	—	(83)
Fair value change through earnings	—	(35,330)	—	(35,330)
Foreign currency translation	—	(1,134)	—	(1,134)
Balance at December 31, 2021	34,704	28,452	93,150	156,306

Equity Method

On September 11, 2018, the Group acquired 49% entity interest in Investee A, which is a joint venture with the other shareholder holding 51% interest established to design, develop and produce BEV equipped with vehicle intelligence and optimized for ride sharing service, with cash consideration of RMB98,000. On January 30, 2019, the Group invested another RMB98,000 into Investee A proportionately with the other investor of Investee A, therefore kept the Group’s 49% shareholding percentage unchanged. The Group has significant influence in Investee A and therefore the investment is accounted for using the equity method. The proportionate share of the net loss of equity method investees are recorded in “Others, net” in the consolidated statements of comprehensive loss. As of December 31, 2021, the carrying value of equity method investment in Investee A was reduced to zero.

In July 2021, the Group entered into an agreement with Suzhou Huichuan United Power System Co., LTD (“Suzhou Huichuan” or “Investor B”) to establish Changzhou Huixiang New Energy Auto Parts Co., LTD (“Changzhou Huixiang” or “Joint Venture”). The Group was obligated to pay RMB73,500 registered capital, representing 49% of Changzhou Huixiang equity interests, while Suzhou Huichuan is obligated to contribute RMB76,500 registered capital, representing 51% Changzhou Huixiang equity interests. Upon completion of the business registration procedures as of December 31, 2021, the Group obtained the shareholder rights and obligation based on its respective shareholding ownership. The Group has significant influence in Changzhou Huixiang and therefore the investment is accounted for using the equity method. Subsequent to December 31, 2021, the Group paid RMB30,000 out of the total RMB73,500 registered capital.

The Group performs impairment of its investment under equity method 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 years ended December 31, 2019, 2020 and 2021.

13. Long-term Investments (Continued)

Equity Security with Readily Determinable Fair Values

Equity security with readily determinable fair values are marketable equity security which is 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, 2020	100,303	(38,205)	2,818	64,916
As of December 31, 2021	100,303	(73,535)	1,684	28,452

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 under the equity securities without 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.

The unrealized loss are recognized in investment income, net in the 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 not common stock or in substance common stock. Upon adoption of ASU 2016-01 on January 1, 2018, the Group elected measurement alternative and recorded these investments at cost, less impairment, adjusted for subsequent observable price changes.

In the first quarter of 2020, the Group sold the discontinued Low-Speed Small Electric Vehicles (“SEV”) battery packs business to an affiliate of the Group with the total consideration of RMB60,000 (Note 22). The Group further invested RMB60,000 in cash in this affiliate, together with other investors. Therefore, the Group’s equity interests in this affiliate increased from 12.24% to 19.82% on a fully diluted basis as a result of the additional investment.

Impairment charges of 5,000, nil and nil were recorded in investment income, net in the consolidated statements of comprehensive loss for the years ended December 31, 2019, 2020 and 2021, respectively.

Long term Investments (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Long term Investments
Balance	¥ 162,853		¥ 126,181	¥ 177,141
Additions	30,000		65,000	98,000
Share of loss of equity method investees	(83)	$ (13)	(2,520)	(162,725)
Fair value change through earnings	(35,330)		(21,975)	12,550
Changes of interest in the equity method investees				5,494
Impairment	0		0	(5,000)
Foreign currency translation	(1,134)		(3,833)	721
Balance	156,306	$ 24,528	162,853	126,181
Equity Method Investments.
Long term Investments
Balance	4,787		7,307	66,538
Additions	30,000			98,000
Share of loss of equity method investees	(83)		(2,520)	(162,725)
Changes of interest in the equity method investees				5,494
Balance	34,704		4,787	7,307
Equity Security With Readily Determinable Fair Values
Long term Investments
Balance	64,916		90,724	77,453
Fair value change through earnings	(35,330)		(21,975)	12,550
Foreign currency translation	(1,134)		(3,833)	721
Balance	28,452		64,916	90,724
Equity Securities Without Readily Determinable Fair Values
Long term Investments
Balance	93,150		28,150	33,150
Additions			65,000
Impairment				(5,000)
Balance	¥ 93,150		¥ 93,150	¥ 28,150

Prepayments and Other Current Assets (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Prepayments and Other Current Assets
Prepayments to vendors	¥ 218,660		¥ 104,271
Deductible VAT input	118,177		196,021
Prepaid rental and deposits	48,929		30,357
Receivables related to rebate	28,491
Loan receivable from Lifan Holdings			8,000
Others	68,615		15,006
Less: Allowance for Credit Losses	(2,192)		0
Total	¥ 480,680	$ 75,429	¥ 353,655

Leases - Supplemental cash flows information (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows payment for operating leases	¥ 346,757	¥ 126,418	¥ 77,643
Right-of-use assets obtained in exchange for lease liabilities:
Right-of-use assets obtained in exchange for new operating lease liabilities	¥ 1,120,392	¥ 896,804	¥ 207,902

Related Party Balances and Transactions

12 Months Ended

Dec. 31, 2021

Related Party Balances and Transactions

30. Related Party Balances and Transactions

The principal related parties with which the Group had transactions during the years 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

30. Related Party Balances and Transactions (Continued)

The Group entered into the following significant related party transactions:


	For the Year Ended December 31,
	2019	2020	2021
Purchase materials from Beijing Yihang	6,914	58,361	31,692
Purchase R&D service from Beijing Yihang	25,106	4,368	12,176
Purchase R&D service from Suzhou Yihang	—	—	3,772
Purchase service from Beijing Sankuai	—	—	969
Purchase equipment and installation service from Airx	1,994	—	—
Sales of battery packs and materials to Neolix Technologies	1,943	—	—

The Group had the following significant related party balances:


	As of December 31,
	2020	2021
Due from Neolix Technologies	678	678
Due from Beijing Yihang	—	334
Total	678	1,012


	As of December 31,
	2020	2021
Due to Changzhou Huixiang (See Note 13)	—	30,000
Due to Beijing Yihang	19,183	7,102
Due to Beijing Sankuai	—	330
Due to Airx	23	23
Total	19,206	37,455

Parent Company Only Condensed Financial Information - Condensed statements of cash flows (Details) ¥ in Thousands, $ in Thousands	1 Months Ended	12 Months Ended
	Jan. 31, 2018 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating activities		¥ 8,340,385	$ 1,308,788	¥ 3,139,804	¥ (1,793,710)
CASH FLOWS FROM INVESTING ACTIVITIES
Placement of time deposits		(1,308,296)	(205,300)	(1,038,017)	(1,725,148)
Redemption of time deposits		1,630,773	255,904	601,968	1,265,877
Placement of short-term investments		(220,850,351)	(34,656,239)	(105,279,461)	(7,998,736)
Redemption of short-term investments		220,345,863	34,577,074	87,699,180	7,020,989
Net cash used in investing activities		(4,257,244)	(668,054)	(18,737,725)	(2,574,836)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible debts		5,533,238	868,286		168,070
Proceeds from follow-on offering, net of issuance cost				9,990,955
Proceeds from exercise of share options		1,139	179
Proceeds from issuance of ordinary shares		70	11
Net cash provided by financing activities		16,709,533	2,622,090	24,710,697	5,655,690
Effects of exchange rate changes on cash and cash equivalents		(472,129)	(74,086)	(376,646)	53,722
Net increase in cash, cash equivalents and restricted cash		20,320,545	3,188,738	8,736,130	1,340,866
Cash, cash equivalents at beginning of the year		8,938,341
Cash, cash equivalents at end of the year		27,854,224	$ 4,370,936	8,938,341
Parent company \| Reportable legal entity
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating activities		367,063		109,961	26,492
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to, and investments in subsidiaries, VIEs and VIEs' subsidiaries		(10,157,678)		(10,006,889)	(4,384,396)
Placement of time deposits		(298,284)			(1,725,148)
Redemption of time deposits		297,654		463,527	1,265,877
Placement of short-term investments		(173,133,568)		(75,367,086)	(35,157)
Redemption of short-term investments		180,386,757		60,452,428
Net cash used in investing activities		(2,905,119)		(24,458,020)	(4,878,824)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs				3,851,034	5,254,333
Proceeds from issuance of convertible debts		5,533,238			168,070
Proceeds from IPOs and concurrent private placements, net of issuance cost		11,004,778		11,034,685
Proceeds from follow-on offering, net of issuance cost				9,990,955
Proceeds from exercise of share options		1,139
Proceeds from issuance of ordinary shares		70
Net cash provided by financing activities		16,539,225		24,876,674	5,422,403
Effects of exchange rate changes on cash and cash equivalents		(387,668)		(20,248)	25,595
Net increase in cash, cash equivalents and restricted cash		13,613,501		508,367	595,666
Cash, cash equivalents at beginning of the year	¥ 45,341	1,149,374		641,007	641,007
Cash, cash equivalents at end of the year		¥ 14,762,875		¥ 1,149,374	¥ 641,007

Convertible Redeemable Preferred Shares and Warrants - Issuances of convertible redeemable preferred shares and major rights, preferences and privileges of the Preferred Shares (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands								1 Months Ended				6 Months Ended	12 Months Ended
	Jul. 01, 2020 CNY (¥) ¥ / shares shares	Jan. 23, 2020 $ / shares shares	Jun. 06, 2018 CNY (¥) ¥ / shares shares	Nov. 28, 2017 CNY (¥) ¥ / shares shares	Sep. 05, 2017 CNY (¥) ¥ / shares shares	Jul. 21, 2017 CNY (¥) ¥ / shares shares	Jul. 04, 2016 CNY (¥) ¥ / shares shares	Aug. 31, 2020 shares	Jan. 23, 2020 CNY (¥) shares	Dec. 31, 2019	Jan. 31, 2019 shares	Jul. 02, 2019 CNY (¥) ¥ / shares shares	Dec. 31, 2021 CNY (¥) Vote ¥ / shares shares	Dec. 31, 2020 CNY (¥) shares	Dec. 31, 2019 CNY (¥) shares	Dec. 31, 2019 USD ($) shares	Dec. 31, 2021 $ / shares	Jan. 23, 2020 ¥ / shares
Issuances of convertible redeemable preferred shares
Shares Issued														231,758,541
Conversion ratio of preferred Shares to ordinary shares													1
Percentage of redemption amount payable on Preferred Shares' original issue price													100.00%
Percentage of simple interest on preferred shares' original issue price for accrued and unpaid dividends													8.00%
Redemption Note due and payable													24 months
Vote per share \| Vote													1
Preferred stock dividends declared \| ¥														¥ 0
Common stock dividends declared \| ¥														0
Liquidation, percentage of amount on preferred shares original price													100.00%
Liquidation preference, simple non-compounded interest rate (as a percent)													8.00%
Accretion of the preferred shares \| ¥													¥ 0	¥ 651,190	¥ 743,100
Series Pre-A convertible redeemable preferred shares
Issuances of convertible redeemable preferred shares
Shares Issued						50,000,000
Issue Price per Share \| ¥ / shares						¥ 2.00
Proceeds from Issuance \| ¥						¥ 100,000
Preferred shares, par value \| $ / shares																	$ 0.0001
Series A1 convertible redeemable preferred shares
Issuances of convertible redeemable preferred shares
Shares Issued							129,409,092
Issue Price per Share \| ¥ / shares							¥ 6.03
Proceeds from Issuance \| ¥							¥ 780,000
Preferred shares, par value \| $ / shares																	0.0001
Series A2 convertible redeemable preferred shares
Issuances of convertible redeemable preferred shares
Shares Issued						126,771,562
Issue Price per Share \| ¥ / shares						¥ 7.89
Proceeds from Issuance \| ¥						¥ 1,000,000
Preferred shares, par value \| $ / shares																	0.0001
Series A3 convertible redeemable preferred shares
Issuances of convertible redeemable preferred shares
Shares Issued					65,498,640
Issue Price per Share \| ¥ / shares					¥ 9.47
Proceeds from Issuance \| ¥					¥ 620,000
Preferred shares, par value \| $ / shares																	0.0001
Series B1 convertible redeemable preferred shares
Issuances of convertible redeemable preferred shares
Shares Issued				115,209,526
Issue Price per Share \| ¥ / shares				¥ 13.11
Proceeds from Issuance \| ¥				¥ 1,510,000
Preferred shares, par value \| $ / shares																	0.0001
Series B2 convertible redeemable preferred shares
Issuances of convertible redeemable preferred shares
Shares Issued			55,804,773
Issue Price per Share \| ¥ / shares			¥ 14.16
Proceeds from Issuance			¥ 790,000												¥ 101,200	$ 7,148,662
Preferred shares, par value \| $ / shares																	0.0001
Series B3 convertible redeemable preferred shares
Issuances of convertible redeemable preferred shares
Shares Issued												119,950,686			108,077,600	108,077,600
Issue Price per Share \| ¥ / shares												¥ 14.16
Proceeds from Issuance \| ¥												¥ 1,701,283
Preferred shares converted from the convertible promissory notes											11,873,086
Discount on purchase price										15.00%			15.00%
Preferred shares, par value \| $ / shares																	0.0001
Series C Convertible Redeemable Preferred Shares
Issuances of convertible redeemable preferred shares
Shares Issued									267,198,535						248,281,987	248,281,987
Proceeds from Issuance \| ¥									¥ 3,626,924
Discount on purchase price													15.00%
Shares issued upon exercise of additional warrants		18,916,548											78,334,557
Cash exercise price \| ¥													¥ 1,022,045
Cash exercise price per share \| ¥ / shares													¥ 13.02
Shares issued for non- refundable cash considerations													4,109,127
Preferred shares, par value \| $ / shares																	0.0001
Series D Convertible Redeemable Preferred Shares
Issuances of convertible redeemable preferred shares
Shares Issued	231,758,541													231,758,541
Proceeds from Issuance \| ¥	¥ 3,851,034
Preferred shares, par value \| $ / shares																	$ 0.0001
Class A Ordinary Shares
Issuances of convertible redeemable preferred shares
Shares issued upon conversion of preferred shares (in shares)								1,045,789,275
Class A Ordinary Shares \| Mr. Li Xiang
Issuances of convertible redeemable preferred shares
Preferred stock convertible shares issuable								1,045,789,275
Class A Ordinary Shares \| IPO
Issuances of convertible redeemable preferred shares
Shares issued upon conversion of preferred shares (in shares)								1,045,789,275
Class B Ordinary Shares \| Mr. Li Xiang
Issuances of convertible redeemable preferred shares
Preferred stock convertible shares issuable								115,812,080
Class B Ordinary Shares \| IPO
Issuances of convertible redeemable preferred shares
Shares issued upon conversion of preferred shares (in shares)								115,812,080
Minimum \| Series C Convertible Redeemable Preferred Shares
Issuances of convertible redeemable preferred shares
Issue Price per Share \| $ / shares		$ 1.89
Minimum \| Series D Convertible Redeemable Preferred Shares
Issuances of convertible redeemable preferred shares
Issue Price per Share \| ¥ / shares	¥ 2.35
Maximum \| Series C Convertible Redeemable Preferred Shares
Issuances of convertible redeemable preferred shares
Issue Price per Share \| ¥ / shares																		¥ 2.23
Maximum \| Series D Convertible Redeemable Preferred Shares
Issuances of convertible redeemable preferred shares
Issue Price per Share \| ¥ / shares	¥ 2.64

Organization and Nature of Operations - Additional information (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2021 USD ($)
Variable interest entity
Accumulated deficit	¥ (6,805,635)	¥ (6,482,225)		$ (1,067,953)
Management fees paid	0	0	¥ 0
VIEs and VIEs' subsidiaries
Variable interest entity
Registered capitals and PRC statutory reserves	7,103,472	7,930,831
VIEs and VIEs' subsidiaries \| PRC
Variable interest entity
Accumulated deficit	¥ 1,229,463	¥ 3,772,758

- Definition

The cumulative amount of the reporting entity's undistributed earnings or deficit.

+ References + Details

Parent Company Only Condensed Financial Information - Condensed statements of comprehensive loss (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Operating expenses:
Selling, general and administrative	¥ (3,492,385)	$ (548,031)	¥ (1,118,819)	¥ (689,379)
Research and development	(3,286,389)	(515,706)	(1,099,857)	(1,169,140)
Total operating expenses	(6,778,774)	(1,063,737)	(2,218,676)	(1,858,519)
Loss from operations	(1,017,320)	(159,639)	(669,337)	(1,858,614)
Other (expense)/income
Interest expense	(63,244)	(9,924)	(66,916)	(83,667)
Changes in fair value of warrants and derivative liabilities			272,327	(426,425)
Investment income, net	740,432	116,190	254,916	79,631
Others, net	187,320	29,395	20,133	(128,799)
(Loss)/Income before income tax expenses	(152,812)	(23,978)	(188,877)	(2,417,874)
Income tax benefit/(expense)	168,643	26,464	(22,847)
Net loss	(321,455)	(50,442)	(151,657)	(2,438,536)
Accretion on convertible redeemable preferred shares to redemption value	0		(651,190)	(743,100)
Deemed dividend to preferred shareholders upon extinguishment, net				(217,362)
Effect of exchange rate changes on convertible redeemable preferred shares			10,862	117,391
Net loss attributable to ordinary shareholders of Li Auto Inc.	(321,455)	(50,442)	(791,985)	(3,281,607)
Net loss	(321,455)	(50,442)	(151,657)	(2,438,536)
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustment, net of tax	(516,687)	(81,079)	(1,020,728)	2,851
Total comprehensive loss, net of tax	(838,142)	$ (131,521)	(1,172,385)	(2,435,685)
Parent company \| Reportable legal entity
Operating expenses:
Selling, general and administrative	(27,288)		(9,424)	(5,114)
Research and development	(852)
Total operating expenses	(28,140)		(9,424)	(5,114)
Loss from operations	(28,140)		(9,424)	(5,114)
Other (expense)/income
Interest expense	(21,369)			(9,332)
Interest income	10,746		4,467	20,505
Equity in loss of subsidiaries, VIEs and VIEs' subsidiaries	(563,106)		(520,093)	(2,031,371)
Changes in fair value of warrants and derivative liabilities			272,327	(426,425)
Investment income, net	272,991		106,823	14,880
Foreign exchange loss	(3,023)		(5,861)	(1,084)
Others, net	10,446		104	(595)
(Loss)/Income before income tax expenses	(321,455)		(151,657)	(2,438,536)
Net loss	(321,455)		(151,657)	(2,438,536)
Accretion on convertible redeemable preferred shares to redemption value			(651,190)	(743,100)
Deemed dividend to preferred shareholders upon extinguishment, net				(217,362)
Effect of exchange rate changes on convertible redeemable preferred shares			10,862	117,391
Net loss attributable to ordinary shareholders of Li Auto Inc.	(321,455)		(791,985)	(3,281,607)
Net loss	(321,455)		(151,657)	(2,438,536)
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustment, net of tax	(516,687)		(1,020,728)	2,851
Total comprehensive loss, net of tax	¥ (838,142)		¥ (1,172,385)	¥ (2,435,685)

Revenue Disaggregation (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Revenue Disaggregation
Revenues	¥ 27,009,779	$ 4,238,424	¥ 9,456,609	¥ 284,367
Vehicle sales
Revenue Disaggregation
Revenues	26,128,469	4,100,127	9,282,703	280,967
Other sales and services
Revenue Disaggregation
Revenues	¥ 881,310	$ 138,297	¥ 173,906	¥ 3,400

- 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

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-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Acquisition of Chongqing Zhizao

12 Months Ended

Dec. 31, 2021

Acquisition of Chongqing Zhizao

Acquisition of Chongqing Zhizao

5. Acquisition of Chongqing Zhizao

Acquisition of Chongqing Zhizao

On December 28, 2018, the Company, through a wholly-owned subsidiary of Beijing CHJ, Chongqing Xinfan Machinery Co., Ltd. (the “Buyer” or “Xinfan”), entered into an acquisition agreement (the “Lifan Acquisition Agreement”) with Lifan Industry (Group) Co., Ltd. (“Lifan Industry” or the “Seller”) and its two wholly-owned subsidiaries Chongqing Zhizao (the “Target”) and Chongqing Lifan Passenger Vehicle Co., Ltd. (“Lifan Passenger Vehicle” or the “Divestiture Recipient”), to acquire an 100% equity interest in Chongqing Zhizao (the “Acquisition”). Chongqing Zhizao was formerly known as Chongqing Lifan Automobile Co., Ltd.

Prior to the completion of the Acquisition, Chongqing Zhizao transferred most of its assets and liabilities and the related rights and obligations to Lifan Passenger Vehicle in November 2018 (the “Divestiture”). After the Divestiture, Chongqing Zhizao still retained its Automotive Manufacturing Permission, working capital and certain lease contracts, and other financial assets or liabilities (hereinafter referred to as “Retained Assets and Liabilities”).

Key operating assets including plants, equipment, vehicle design and development technologies and raw materials had been transferred out from Chongqing Zhizao to Lifan Industry or Lifan Passenger Vehicle prior to the Acquisition. All employee contracts, operational systems and processes have also been transferred to Lifan Passenger Vehicle. No system, standard, protocol, convention, or rule that can create or has the ability to contribute to the creation of outputs were obtained by Xinfan. This Acquisition is determined to be an asset acquisition as no sufficient inputs and processes were acquired to produce outputs.

The Acquisition was completed on December 29, 2018 (the “Acquisition Date”) when the legal procedures were completed. Total consideration for the Acquisition was RMB650,000 in cash. As of December 31, 2021, the Group settled the aggregate amount of RMB648,000, of which RMB8,000 was settled with the outstanding loan receivable from Chongqing Lifan Holdings Ltd. (“Lifan Holdings”) (Note 8).

On December 19, 2019, Xinfan entered into a share transfer agreement (the “Lifan Disposal Agreement”) to dispose of its 100% equity interest in Chongqing Zhizao, with cash consideration of RMB0.001. The Retained Assets and Liabilities of Chongqing Zhizao not related to the manufacturing of Li ONE were transferred out to Lifan Industry and Lifan Passenger Vehicle upon the completion of the disposal of Chongqing Zhizao. A disposal loss of RMB4,503 was recognized on December 26, 2019, the disposal date of the transaction.

Organization and Nature of Operations - Net (loss)/income (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Variable interest entity
Revenues	¥ 27,009,779	$ 4,238,424	¥ 9,456,609	¥ 284,367
Cost	(21,248,325)	(3,334,326)	(7,907,270)	(284,462)
Expenses	(6,778,774)	(1,063,737)	(2,218,676)	(1,858,519)
Other (expense)/income	187,320	29,395	20,133	(128,799)
(Loss)/Income before income tax expenses	(152,812)	(23,978)	(188,877)	(2,417,874)
Less: income tax expenses	(168,643)	(26,464)	22,847
Net (loss)/income from continuing operations	(321,455)	(50,442)	(166,030)	(2,417,874)
Net (loss)/income from discontinued operations			14,373	(20,662)
Net (loss)/income	(321,455)	(50,442)	(151,657)	(2,438,536)
Net loss attributable to ordinary shareholders of Li Auto Inc.	(321,455)	$ (50,442)	(791,985)	(3,281,607)
VIEs and VIEs' subsidiaries
Variable interest entity
Share of loss from subsidiaries	(13)		(1,179)	(5,783)
Other (expense)/income	2,610,121		40,309	(174,403)
(Loss)/Income before income tax expenses	2,662,162		(458,900)	(1,234,283)
Less: income tax expenses	(117,413)		(36,309)
Net (loss)/income from continuing operations	2,544,749		(495,209)	(1,234,283)
Net (loss)/income from discontinued operations			14,373	(20,662)
Net (loss)/income	2,544,749		(480,836)	(1,254,945)
Less: Net (loss)/income attributable to non- controlling interests			5,075	(5,971)
Net loss attributable to ordinary shareholders of Li Auto Inc.	2,544,749		(475,761)	(1,260,916)
VIEs and VIEs' subsidiaries - Third-party
Variable interest entity
Revenues	6,294,675		8,001,067	284,367
Cost	(20,171,861)		(7,790,586)	(284,462)
Expenses	(2,401,187)		(1,358,507)	(1,675,643)
VIEs and VIEs' subsidiaries - Inter-company
Variable interest entity
Revenues	22,287,788		8,553,798	974,313
Cost	(5,891,611)		(7,877,944)	¥ (352,672)
Expenses	¥ (65,750)		¥ (25,858)

Taxation (Tables)

12 Months Ended

Dec. 31, 2021

Taxation

Schedule of composition of income tax benefit

Schedule of reconciliations of the income tax expenses


	For the Year Ended December 31,
	2019	2020	2021
Loss before income tax expense	(2,417,874)	(188,877)	(152,812)
Income tax credit computed at PRC statutory income tax rate of 25%	(604,468)	(47,219)	(38,203)
Tax effect of tax‑exempt entity and preferential tax rate	230,669	30,140	(89,928)
Tax effect of R&D Deduction and others	(121,177)	(144,503)	(314,141)
Non‑deductible expenses	27,031	21,511	318,185
Change in valuation allowance	467,945	117,224	292,730
Income tax (benefit)/ expenses	—	(22,847)	168,643

Schedule of components of the group's deferred tax assets (liabilities)


	For the Year Ended December 31,
	2019	2020	2021
Deferred tax assets
Net operating loss carryforwards	717,495	1,144,397	1,119,659
Accrued expenses and others	12,545	66,773	228,734
Impairment of long-lived assets and allowance for credit losses	73,271	7,694	13,224
Acquisition of Changzhou Manufacturing Base Phase I and Phase II (Note 11)	—	—	11,969
Depreciation and amortization	26,946	16,220	190
Unrealized financing cost	27,520	13,125	—
Unrealized investment loss	29,664	—	—
Total deferred tax assets	887,441	1,248,209	1,373,776
Less: Valuation allowance	(887,441)	(1,004,665)	(1,297,395)
Deferred tax assets, net of valuation allowance	—	243,544	76,381
Deferred tax liabilities
Accelerated tax depreciation and others	—	(215,030)	(195,121)
Fair value change of certain investments	—	(5,667)	(15,087)
Total deferred tax liabilities	—	(220,697)	(210,208)
Deferred tax assets/(liabilities), net	—	22,847	(133,827)

Schedule of movement of valuation allowance


	For the Year Ended December 31,
	2019	2020	2021
Valuation allowance
Balance at beginning of the year	419,496	887,441	1,004,665
Additions	467,945	148,458	395,955
Reversal	—	(31,234)	(103,225)
Balance at ending of the year	887,441	1,004,665	1,297,395

Revenue Disaggregation (Tables)

12 Months Ended

Dec. 31, 2021

Revenue Disaggregation

Schedule of revenue disaggregation


	For the Year Ended December 31,
	2019	2020	2021
Vehicle sales	280,967	9,282,703	26,128,469
Other sales and services	3,400	173,906	881,310
Total	284,367	9,456,609	27,009,779

Schedule of revenue by timing of recognition


	For the Year Ended December 31,
	2019	2020	2021
Revenue recognized at a point in time	284,195	9,436,095	26,917,836
Including: Vehicle sales	280,967	9,282,703	26,128,469
Other sales and services	3,228	153,392	789,367
Revenue recognized over time	172	20,514	91,943
Total	284,367	9,456,609	27,009,779

Parent Company Only Condensed Financial Information

12 Months Ended

Dec. 31, 2021

Parent Company Only Condensed Financial Information

Parent Company Only Condensed Financial Information

32. Parent Company Only Condensed Financial Information

The Company performed a test on the restricted net assets of its consolidated subsidiaries and VIEs in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), General Notes to Financial Statements and concluded that it was applicable for the Company to disclose the financial information for the Company only.

The subsidiaries did not pay any dividend to the Company for the years presented. Certain information and footnote disclosures generally included in financial statements prepared in accordance with US GAAP have been condensed and omitted. The footnote disclosures contain supplemental information relating to the operations of the Company, as such, these statements are not the general-purpose financial statements of the reporting entity and should be read in conjunction with the notes to the consolidated financial statements of the Company.

The Company did not have significant capital and other commitments, or guarantees as of December 31, 2020 and 2021.

32. Parent Company Only Condensed Financial Information (Continued)

Condensed balance sheets


	As of December 31,
	2020	2021
	RMB	RMB

ASSETS
Current assets:
Cash and cash equivalents	1,149,374	14,762,875
Time deposits and short-term investments	14,486,070	7,020,662
Amounts due from subsidiaries of the Group	14,065,341	23,763,053
Prepayments and other current assets	—	10,211
Total current assets	29,700,785	45,556,801
Non-current assets:
Investments in subsidiaries, VIEs and VIEs' subsidiaries	42,754	890,788
Long-term investments	64,916	28,452
Total non-current assets	107,670	919,240
Total assets	29,808,455	46,476,041
LIABILITIES
Current liabilities:
Accruals and other current liabilities	4,858	13,798
Total current liabilities	4,858	13,798
Non-current liabilities:
Long-term borrowings	—	5,397,941
Total non-current liabilities	—	5,397,941
Total liabilities	4,858	5,411,739
SHAREHOLDERS' (DEFICIT)/EQUITY
Class A Ordinary Shares	1,010	1,176
Class B Ordinary Shares	235	235
Treasury shares	—	(89)
Additional paid-in capital	37,289,761	49,390,486
Accumulated other comprehensive loss	(1,005,184)	(1,521,871)
Accumulated deficit	(6,482,225)	(6,805,635)
Total shareholders' equity	29,803,597	41,064,302
Total liabilities and shareholders' equity	29,808,455	46,476,041

32. Parent Company Only Condensed Financial Information (Continued)

Condensed statements of comprehensive loss


	For the Year Ended December 31,
	2019	2020	2021
	RMB	RMB	RMB

Operating expenses:
Selling, general and administrative	(5,114)	(9,424)	(27,288)
Research and development	—	—	(852)
Total operating expenses	(5,114)	(9,424)	(28,140)
Loss from operations	(5,114)	(9,424)	(28,140)
Other income/(expense)
Interest expense	(9,332)	—	(21,369)
Interest income	20,505	4,467	10,746
Equity in loss of subsidiaries, VIEs and VIEs’ subsidiaries	(2,031,371)	(520,093)	(563,106)
Change in fair value of warrants and derivative liabilities	(426,425)	272,327	—
Investment income, net	14,880	106,823	272,991
Foreign exchange loss	(1,084)	(5,861)	(3,023)
Others, net	(595)	104	10,446
Loss before income tax expense	(2,438,536)	(151,657)	(321,455)
Income tax expense	—	—	—
Net loss	(2,438,536)	(151,657)	(321,455)
Accretion on convertible redeemable preferred shares to redemption value	(743,100)	(651,190)	—
Deemed dividend to preferred shareholders upon extinguishment, net (Note 23)	(217,362)	—	—
Effect of exchange rate changes on convertible redeemable preferred shares	117,391	10,862	—
Net loss attributable to ordinary shareholders of Li Auto Inc.	(3,281,607)	(791,985)	(321,455)
Net loss	(2,438,536)	(151,657)	(321,455)
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustment, net of tax	2,851	(1,020,728)	(516,687)
Total comprehensive loss, net of tax	(2,435,685)	(1,172,385)	(838,142)

32. Parent Company Only Condensed Financial Information (Continued)

Condensed statements of cash flows


	For the Year Ended December 31,
	2019	2020	2021
	RMB	RMB	RMB

CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating activities	26,492	109,961	367,063
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to, and investments in subsidiaries, VIEs and VIEs' subsidiaries	(4,384,396)	(10,006,889)	(10,157,678)
Placement of time deposits	(1,725,148)	—	(298,284)
Redemption of time deposits	1,265,877	463,527	297,654
Placement of short-term investments	(35,157)	(75,367,086)	(173,133,568)
Redemption of short-term investments	—	60,452,428	180,386,757
Net cash used in investing activities	(4,878,824)	(24,458,020)	(2,905,119)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs	5,254,333	3,851,034	—
Proceeds from issuance of convertible debts	168,070	—	5,533,238
Proceeds from IPOs and concurrent private placements, net of issuance cost	—	11,034,685	11,004,778
Proceeds from follow-on offering, net of issuance costs	—	9,990,955	—
Proceeds from exercise of share options	—	—	1,139
Proceeds from issuance of ordinary shares	—	—	70
Net cash provided by financing activities	5,422,403	24,876,674	16,539,225
Effects of exchange rate changes on cash and cash equivalents	25,595	(20,248)	(387,668)
Net increase in cash, cash equivalents	595,666	508,367	13,613,501
Cash, cash equivalents at beginning of the year	45,341	641,007	1,149,374
Cash, cash equivalents at end of the year	641,007	1,149,374	14,762,875

Basis of presentation

The Company’s accounting policies are the same as the Group’s accounting policies with the exception of the accounting for the investments in subsidiaries and VIEs.

For the Company only condensed financial information, the Company records its investments in subsidiaries and VIEs under the equity method of accounting as prescribed in ASC 323, Investments—Equity Method and Joint Ventures.

Such investments are presented on the condensed balance sheets as “investments in subsidiaries, VIEs and VIEs’ subsidiaries” and shares in the subsidiaries and VIEs’ loss are presented as “equity in loss of subsidiaries, VIEs and VIEs’ subsidiaries” in the condensed statements of comprehensive loss. The parent company only condensed financial information should be read in conjunction with the Group’ consolidated financial statements.

Accruals and Other Current Liabilities

12 Months Ended

Dec. 31, 2021

Accruals and Other Current Liabilities

Accruals and Other Current Liabilities

16. Accruals and Other Current Liabilities

Accruals and other current liabilities consist of the following:


	As of December 31,
	2020	2021
Payables for purchase of property, plant and equipment	118,181	456,395
Salaries and benefits payable	187,972	417,449
Tax payable	50,088	277,233
Accrued warranty	55,138	154,276
Payables for logistics expenses	43,571	143,632
Payables for research and development expenses	35,032	94,517
Deposits from vendors	9,120	27,716
Advance from customers	9,285	10,262
Payables for acquisition of Chongqing Zhizao (Note 5)	79,552	2,000
Other payables	59,520	295,888
Total	647,459	1,879,368

Loss Per Share (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares	Dec. 31, 2019 CNY (¥) ¥ / shares shares
Numerator:
Net loss	¥ (321,455)	$ (50,442)	¥ (151,657)	¥ (2,438,536)
Accretion on convertible redeemable preferred shares to redemption value	0		(651,190)	(743,100)
Deemed dividend to preferred shareholders upon extinguishment, net				(217,362)
Effect of exchange rate changes on convertible redeemable preferred shares			10,862	117,391
Net loss attributable to ordinary shareholders of Li Auto Inc.	(321,455)	(50,442)	(791,985)	(3,281,607)
Including:
Net loss from continuing operations attributable to ordinary shareholders of Li Auto Inc.	¥ (321,455)	$ (50,442)	(806,358)	(3,260,945)
Net (loss)/income from discontinued operations attributable to ordinary shareholders of Li Auto Inc.			¥ 14,373	¥ (20,662)
Denominator:
Weighted average ordinary shares outstanding-basic \| shares	1,853,320,448	1,853,320,448	870,003,278	255,000,000
Weighted average ordinary shares outstanding-diluted \| shares	1,853,320,448	1,853,320,448	870,003,278	255,000,000
Basic and diluted net loss per share from continuing operations attributable to ordinary shareholders of Li Auto Inc. \| (per share)	¥ (0.17)	$ (0.03)	¥ (0.93)	¥ (12.79)
Basic and diluted net (loss)/income per share from discontinued operations attributable to ordinary shareholders of Li Auto Inc. \| ¥ / shares			0.02	(0.08)
Net loss per share \| (per share)	(0.17)	(0.03)	(0.91)	(12.87)
Diluted net loss per share from continuing operations attributable to ordinary shareholders of Li Auto Inc. \| (per share)	(0.17)	(0.03)	(0.93)	(12.79)
Diluted net (loss)/income per share from discontinued operations attributable to ordinary shareholders of Li Auto Inc. \| ¥ / shares			0.02	(0.08)
Net loss per share \| (per share)	¥ (0.17)	$ (0.03)	¥ (0.91)	¥ (12.87)

Discontinued Operations - Gain on disposal of discontinued operations (Details) - Disposal by sale - SEV related business - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2020	Mar. 31, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash consideration received for sale of SEV battery packs business	¥ 60,000	¥ 60,000
Carrying value of net assets transferred	(42,637)
Gain on disposal of discontinued operations	¥ 17,363

Taxation - Reconciliations of income tax expenses (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Reconciliations of the income tax expenses
Loss before income tax expense	¥ (152,812)	$ (23,978)	¥ (188,877)	¥ (2,417,874)
Income tax credit computed at PRC statutory income tax rate of 25%	(38,203)		(47,219)	(604,468)
Tax effect of tax-exempt entity and preferential tax rate	(89,928)		30,140	230,669
Tax effect of Super Deduction and others	(314,141)		(144,503)	(121,177)
Nondeductible expenses	318,185		21,511	27,031
Change in valuation allowance	292,730		117,224	¥ 467,945
Income tax (benefit)/ expenses	¥ 168,643	$ 26,464	¥ (22,847)
PRC statutory tax rate (in percent)	25.00%	25.00%

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 940
-SubTopic 20
-Section 25
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=123384075&loc=d3e41242-110953

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
-URI http://asc.fasb.org/extlink&oid=123367319&loc=SL114868664-224227

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(8))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-URI http://asc.fasb.org/extlink&oid=120399901&loc=d3e537907-122884

Reference 9: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(15))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

+ Details

- Definition

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

+ References + Details

Other Non-current Assets

12 Months Ended

Dec. 31, 2021

Other Non-current Assets

Other Non-current Assets

12. Other Non-current Assets

Other non-current assets consist of the following:


	As of December 31,
	2020	2021
Prepayments for purchase of property, plant and equipment ⁽ⁱ⁾	126,006	1,051,415
Long-term deposits	149,235	653,030
Deductible VAT input, non-current	—	263,390
Others	45,943	16,998
Less: Allowance for credit losses	—	(3,757)
Total	321,184	1,981,076

(i)

Inventories

12 Months Ended

Dec. 31, 2021

Inventories

Inventories

7. Inventories

Inventories consist of the following:


	As of December 31,
	2020	2021
Raw materials, work in process and supplies	227,836	1,468,801
Finished products	820,168	149,089
Total	1,048,004	1,617,890

Raw materials, work in process and supplies as of December 31, 2020 and 2021 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 included 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.

Trade receivable

12 Months Ended

Dec. 31, 2021

Trade receivable

Trade receivable

6. Trade receivable

An aging analysis of the trade receivable as of December 31, 2020 and 2021, based on the invoice date and net of provisions, is as follows:


	As of December 31,
	2020	2021
Within 3 months	10,429	16,462
Between 3 months and 6 months	18,914	890
Between 6 months and 1 year	77,903	—
More than 1 year	8,303	103,189
Total	115,549	120,541

Inventories (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Inventories
Raw materials, work in process and supplies	¥ 149,089		¥ 820,168
Finished products	1,468,801		227,836
Total	¥ 1,617,890	$ 253,882	¥ 1,048,004

Related Party Balances and Transactions - Significant related party transactions (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Materials \| Beijing Yihang
Related Party Balances and Transactions
Purchases from related party	¥ 31,692	¥ 58,361	¥ 6,914
R&D service \| Beijing Yihang
Related Party Balances and Transactions
Purchases from related party	12,176	¥ 4,368	25,106
R&D service \| Suzhou Yihang Intelligent Technology Co., Ltd
Related Party Balances and Transactions
Purchases from related party	3,772
Other sales and services \| Beijing Sankuai
Related Party Balances and Transactions
Purchases from related party	¥ 969
Equipment and installation service \| Airx
Related Party Balances and Transactions
Purchases from related party			1,994
Battery packs and materials \| Neolix Technologies
Related Party Balances and Transactions
Sales to related party			¥ 1,943

Property, Plant and Equipment, Net (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2021 USD ($)
Property, plant and equipment
Total property, plant and equipment, gross	¥ 5,539,261	¥ 3,007,759
Less: Accumulated depreciation	(983,222)	(498,691)
Less: Accumulated impairment loss	(57,770)	(30,381)
Total property, plant and equipment, net	4,498,269	2,478,687		$ 705,877
Depreciation expenses	579,097	312,011	¥ 107,173
Impairment recognized for property, plant and equipment	27,389	30,381	¥ 18,066
Other noncurrent assets	1,981,076	321,184		310,872
Other noncurrent liabilities	802,259	184,717		$ 125,891
Automotive Manufacturing Permission
Property, plant and equipment
Other noncurrent liabilities	93,701
Beijing Manufacturing Base Agreements
Property, plant and equipment
Construction in process	149,098
Other noncurrent assets	11,606
Construction in process
Property, plant and equipment
Total property, plant and equipment, gross	1,942,953	53,579
Mold and tooling
Property, plant and equipment
Total property, plant and equipment, gross	1,098,392	987,316
Production facilities
Property, plant and equipment
Total property, plant and equipment, gross	804,281	787,970
Leasehold improvements
Property, plant and equipment
Total property, plant and equipment, gross	660,902	249,879
Buildings
Property, plant and equipment
Total property, plant and equipment, gross	409,123	404,772
Buildings improvements
Property, plant and equipment
Total property, plant and equipment, gross	297,163	311,947
Equipment
Property, plant and equipment
Total property, plant and equipment, gross	266,745	175,887
Vehicle sales
Property, plant and equipment
Total property, plant and equipment, gross	¥ 59,702	¥ 36,409

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash, cash equivalents and restricted cash at end of the year	¥ 30,493,064	$ 4,785,028	¥ 10,172,519	$ 1,596,290	¥ 1,436,389	¥ 95,523
Less: Cash, cash equivalents and restricted cash of discontinued operations at end of the year					147
Cash, cash equivalents and restricted cash of continuing operations at end of the year	¥ 30,493,064	$ 4,785,028	¥ 10,172,519		¥ 1,436,242

Share-based Compensation - Schedule of stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
2019 and 2020 Share Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award
Number of Options and Shares Outstanding, Beginning balance	56,914,000	54,760,000	51,640,000
Number of Options and Shares, Granted	36,996,286	4,224,000	3,430,000
Number of Options and Shares, Forfeited	(4,106,000)	(2,070,000)	(310,000)
Number of Options and Shares, Exercised	(6,404,416)
Number of Options and Shares Outstanding, Ending balance	83,399,870	56,914,000	54,760,000	51,640,000
Weighted average exercise price, Outstanding	$ 0.10	$ 0.10	$ 0.10
Weighted average exercise price, Granted	0.10	0.10	0.10
Weighted average exercise price, Exercised	0.10
Weighted average exercise price, Forfeited	0.10	0.10	0.10
Weighted average exercise price, Outstanding	$ 0.10	$ 0.10	$ 0.10	$ 0.10
Weighted average remaining contractual life (in years)	7 years 7 months 28 days	5 years 11 months 12 days	6 years 8 months 23 days	7 years 6 months 25 days
Aggregate intrinsic value, Outstanding	$ 1,330,228	$ 814,724	$ 73,926	$ 41,312
Number of Options Outstanding, Vested and expected	79,915,157	55,413,520
Weighted average exercise price, Vested and expected	$ 0.10	$ 0.10
Weighted average remaining contractual life , Vested and expected (in years)	6 years 7 months 6 days	5 years 10 months 24 days
Aggregate intrinsic value, Vested and expected	$ 1,274,647	$ 793,245
Number of Options Outstanding, Exercisable	40,251,584	40,410,000
Weighted average exercise price, Exercisable	$ 0.10	$ 0.10
Weighted average remaining contractual life , Exercisable (in years)	4 years 6 months 18 days	5 years 4 months 2 days
Aggregate intrinsic value, Exercisable	$ 642,013	$ 578,469
2021 Share Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award
Number of Options and Shares, Granted	108,557,400
Number of Options and Shares Outstanding, Ending balance	108,557,400
Weighted average exercise price, Granted	$ 14.63
Weighted average exercise price, Outstanding	$ 14.63
Weighted average remaining contractual life (in years)	9 years 2 months 8 days

Trade and Notes Payable

12 Months Ended

Dec. 31, 2021

Trade and Notes Payable

Trade and Notes Payable

15. Trade and Notes Payable

Trade and notes payable consist of the following:


	As of December 31,
	2020	2021
Trade payable for raw materials	2,991,538	7,089,370
Notes payable	168,977	2,286,680
Total	3,160,515	9,376,050

An aging analysis of the trade and notes payable as at December 31, 2020 and 2021, based on the invoice date, is as follows:


	As of December 31,
	2020	2021
Within 3 months	3,118,840	7,539,833
Between 3 months and 6 months	18,537	1,639,286
Between 6 months and 1 year	10,676	161,913
More than 1 year	12,462	35,018
Total	3,160,515	9,376,050

Subsequent Event (Details) - CNY (¥) ¥ in Thousands	1 Months Ended
Subsequent Event (Details) - CNY (¥) ¥ in Thousands	Apr. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Joint venture
Subsequent Event [Line Items]
Equity interest (as a percent)			70.00%
Equity interest held by another shareholder			30.00%
Subsequent Event \| Xin Wang Da Electric Vehicle and Battery Limited
Subsequent Event [Line Items]
Cash consideration		¥ 400,000
Equity ownership (as a percent)		3.20%
Subsequent Event \| Joint venture
Subsequent Event [Line Items]
Cash consideration	¥ 210,000

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

12 Months Ended

Dec. 31, 2021

Short-term Borrowings and Long-term Borrowings

Schedule of short-term and long-term borrowings

Borrowings consist of the following:


				Interest Rate		As of December 31,
	Maturity Date	Principal Amount		Per Annum		2020	2021
Secured borrowing ⁽¹⁾	December 31, 2022	RMB	94,550	6.1750	%	98,717	—
Unsecured corporate loan⁽²⁾	June 30, 2022	RMB	401,073	6.1750	%	412,921	—
Convertible debt ⁽³⁾	May 1, 2028	US$	862,500	0.2500	%	—	5,397,941
Secured bank loan ⁽⁴⁾	September 28, 2029	RMB	600,000	4.8000	%	—	600,000
Total borrowings						511,638	5,997,941

Classified as:


	As of December 31,
	2020	2021
– Short-term borrowings	—	37,042
– Long-term borrowings	511,638	5,960,899
Total	511,638	5,997,941

(1)

(2)

(3)

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

(4)

Schedule of secured bank loan


	As of December 31,
	2020	2021
Secured bank loan
– Current portion	—	37,042
– Non-current portion	—	562,958
Total	—	600,000

- 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.

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+ Details

Share-based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Compensation Arrangement by Share-based Payment Award

Schedule of compensation expenses recognized for share-based awards


	For the Year Ended December 31,
	2019	2020	2021
Cost of sales	—	1,515	26,713
Research and development expenses	—	60,789	741,793
Selling, general and administrative expenses	—	80,491	332,850
Total	—	142,795	1,101,356

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, 2018	51,640,000	0.10	7.57	41,312
Granted	3,430,000	0.10
Forfeited	(310,000)	0.10
Outstanding as of December 31, 2019	54,760,000	0.10	6.73	73,926
Granted	4,224,000	0.10
Forfeited	(2,070,000)	0.10
Outstanding as of December 31, 2020	56,914,000	0.10	5.95	814,724
Granted	36,996,286	0.10
Exercised	(6,404,416)	0.10
Forfeited	(4,106,000)	0.10
Outstanding as of December 31, 2021	83,399,870	0.10	7.66	1,330,228

Vested and expected to vest as of December 31, 2020	55,413,520	0.10	5.90	793,245
Exercisable as of December 31, 2020	40,410,000	0.10	5.34	578,469
Vested and expected to vest as of December 31, 2021	79,915,157	0.10	6.60	1,274,647
Exercisable as of December 31, 2021	40,251,584	0.10	4.55	642,013

Schedule of options fair value assumptions


	For the Year Ended December 31,
	2019	2020	2021
Exercise price (US$)	0.10	0.10	0.10
Fair value of the ordinary shares on the date of option grant (US$)	0.90 - 1.45	1.35 - 1.90	14.42-17.35
Risk‑free interest rate	1.98% - 3.17%	0.69% - 1.92%	0.93% - 1.48%
Expected term (in years)	10.00	10.00	10.00
Expected dividend yield	0%	0%	0%
Expected volatility	47% - 48%	45% - 46%	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
December 31, 2021	108,557,400	14.63	9.19	—

Schedule of options fair value assumptions


	For the Year Ended December 31,
	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	%

Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2021

Discontinued Operations

Schedule of results of operations and cash flows of the discontinued operations and gain on disposal of discontinued operations


	For the Year Ended December 31,
	2019	2020
Revenues	9,654	870
Cost of sales	(18,981)	(2,437)
Gross loss	(9,327)	(1,567)
Operating expenses	(11,359)	(1,423)
Impairment of long‑lived assets	—	—
Loss from operations of discontinued operations	(20,686)	(2,990)
Others, net	24	—
Loss from discontinued operations before income tax expense	(20,662)	(2,990)
Income tax expense	—	—
Net loss from discontinued operations, net of tax	(20,662)	(2,990)


	For the Year Ended December 31,
	2019	2020
Net cash (used in)/provided by discontinued operating activities	(11,395)	148
Net cash (used in)/provided by discontinued investing activities	(10,565)	59,705

The following table presents the gain on disposal of discontinued operations related to the disposal of SEV battery packs business for the year ended December 31, 2020:


		For the Year Ended
		December 31, 2020
Cash consideration received for sale of SEV battery packs business		60,000
Carrying value of net assets transferred		(42,637)
Gain on disposal of discontinued operations		17,363

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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+ Details

Leases

12 Months Ended

Dec. 31, 2021

Leases

Leases

11. Leases

Operating leases of the Group mainly include land use rights and leases of offices, retail stores and delivery and servicing centers and the finance lease was the lease of Changzhou manufacturing base production plants.

The components of lease expenses were as follows:


	For the Year Ended December 31,
	2019	2020	2021
Lease cost
Finance lease cost:
Amortization of assets	15,501	15,346	12,122
Interest of lease liabilities	19,943	21,851	19,322
Operating lease cost	86,365	176,788	367,375
Short‑term lease cost	6,801	4,937	15,559
Total	128,610	218,922	414,378

Operating lease cost is recognized as rental expenses in consolidated statements of comprehensive loss.

11. Leases (Continued)

Short-term lease cost is recognized as rental expenses in consolidated statements of comprehensive loss on a straight-line basis over the lease term.

Supplemental cash flows information related to leases was as follows:


	For the Year Ended December 31,
	2019	2020	2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows payments for operating leases	77,643	126,418	346,757
Right-of-use assets obtained in exchange for lease liabilities:
Right-of-use assets obtained in exchange for new operating lease liabilities	207,902	896,804	1,120,392

Supplemental balance sheet information related to leases was as follows (in thousands, except lease terms and discount rate):


	As of December 31,
	2020	2021
Operating Leases
Land use rights, net ^{(i, ii)}	181,505	289,810
Operating lease right-of-use assets, net (excluding land use rights)	1,095,501	1,771,682
Total operating lease assets	1,277,006	2,061,492
Operating lease liabilities, current	210,531	473,245
Operating lease liabilities, non-current	1,025,253	1,369,825
Total operating lease liabilities	1,235,784	1,843,070


	As of December 31,
	2020	2021
Finance Leases
Property, plant and equipment, at cost ^{(i, iv)}	294,269	—
Accumulated depreciation	(56,682)	—
Property, plant and equipment, net	237,587	—
Finance lease liabilities, non-current	366,883	—
Total finance leases liabilities	366,883	—


	As of December 31,
	2020		2021
Weighted-average remaining lease term
Land use rights	47 years		47 years
Operating leases	11 years		8 years
Finance leases	16 years		—
Weighted-average discount rate
Land use rights	6.2	%	—
Operating leases	5.8	%	5.8	%
Finance leases	6.2	%	—

11. Leases (Continued)

Maturities of lease liabilities were as follows:


	As of December 31, 2021
	Operating leases	Finance leases
2021	—	—
2022	473,477	—
2023	372,077	—
2024	242,358	—
2025	178,605	—
2026	155,296	—
Thereafter	953,835	—
Total undiscounted lease payments	2,375,648	—
Less: imputed interest	(532,578)	—
Total lease liabilities	1,843,070	—

The Group, through its VIEs and VIE’s subsidiaries, entered into a cooperation agreement and supplementary agreements (collectively “Changzhou Cooperation Agreements”) in February 2016 and September 2016 for the establishment of the Group’s Changzhou Manufacturing Base with the Changzhou Wujin District People’s Government and two enterprises affiliated with it ((“Changzhou Wunan New Energy Vehicle Investment Co., Ltd” and its 100% subsidariy (“Changzhou Chehejin”), collectively referred to “the Developer”). The Company intends to establish the Manufacturing Base, which are used to design, develop, manufacture premium electric vehicle in China.

According to the Changzhou Cooperation Agreement, the Developer will be responsible to construct the Changzhou Manufacturing Base which consists of manufacturing plants, the underlying land use right, and manufacturing equipment and facilities, etc. in accordance with the Group’s requirements.

The Developer obtained the land use right from Changzhou government for both of Phase I and Phase II Land, and the lease term is from September 11, 2018 to March 14, 2067.

i) Changzhou Manufacturing Base—Phase I

11. Leases (Continued)

ii) Changzhou Manufacturing Base—Phase II

iii) Modification of lease agreements in connection to Changzhou Manufacturing Base- Phase I and Phase II

In June 2020, the Group entered into a series of supplemental agreements in connection to Changzhou Manufacturing Base Phase I and Phase II with the lessor to extend the purchase option to December 31, 2022, and the purchase price remained the same as the original agreement. In addition, the annual lease payment from 2020 to 2022 are subject to achievement of annual sales volume of the Group. If the Group achieves the pre-determined annual sales volume of electric vehicle, the annual lease payment of that year will be waived (equal to zero) by the lessor. Otherwise, the Group will pay the rental fees as agreed in the modified contract.

As the lessor did not provide the additional manufacturing land or plants to the Group, the modified lease contracts do not result in separate new leases, and the lease classifications remained as an operating lease for Phase I Land and a financing lease for Phase I Plants. Accordingly, the lease liabilities were re-measured based on the modified term and reclassified as long-term liabilities. The discount rate for the modified leases at the re-measurement was updated on the basis of the remaining lease term and lease payments. The lease of Phase II Plants remained classified as a financing transaction. Accordingly, the liabilities were re-measured based on the modified term and reclassified as a long-term borrowing. The discount rate for the modified borrowing at the re-measurement was updated on the basis of the remaining borrowing term and payments.

For the year ended December 31, 2020, the pre-determined annual sales volume was achieved. And the Group considered it was similar to a negative variable lease payment, and therefore should be accounted for as a period item when the contingency was resolved (i.e. annual sales target would be achieved at the end of each year). Accordingly, the liabilities were re-measured base on the waived annual lease payment.

11. Leases (Continued)

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

Summary of Significant Accounting Policies - Trade receivables and current expected credit losses (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2021 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	¥ 6,415	$ 1,007	¥ 0	¥ 0
Accumulated deficit	(6,805,635)		(6,482,225)		$ (1,067,953)
Credit loss provision recorded in current assets	2,659
Credit loss provision recorded in non-current assets	3,757		0
Allowance for credit losses.
Provisions	6,415	$ 1,007	0	¥ 0
Write-offs	(1,954)
Ending balance	6,416
ASU 2016-13 \| Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accumulated deficit			1,955
Allowance for credit losses.
Beginning balance	1,955
Ending balance			1,955
ASU 2016-13 \| Adjusted Balance
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Credit loss provision recorded in current assets			972
Credit loss provision recorded in non-current assets			983
Allowance for credit losses.
Beginning balance	¥ 1,955
Ending balance			¥ 1,955

Deferred Revenue (Tables)

12 Months Ended

Dec. 31, 2021

Deferred Revenue

Schedule of carried-forward deferred revenue


	For the Year Ended December 31,
	2019	2020	2021
Deferred revenue—at beginning of the year	—	62,638	407,168
Additions	338,702	9,687,382	27,377,563
Recognition	(276,064)	(9,342,852)	(27,089,986)
Deferred revenue—at end of the year	62,638	407,168	694,745
Including: Deferred revenue, current	56,695	271,510	305,092
Deferred revenue, non‑current	5,943	135,658	389,653

Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2021

Loss Per Share

Schedule of basic and diluted loss per share


	For the Year Ended December 31,
	2019	2020	2021
Numerator:
Net loss	(2,438,536)	(151,657)	(321,455)
Accretion on convertible redeemable preferred shares to redemption value	(743,100)	(651,190)	—
Deemed dividend to preferred shareholders upon extinguishment, net	(217,362)	—	—
Effect of exchange rate changes on convertible redeemable preferred shares	117,391	10,862	—
Net loss attributable to ordinary shareholders of Li Auto Inc.	(3,281,607)	(791,985)	(321,455)
Including: Net loss from continuing operations attributable to ordinary shareholders of Li Auto Inc.	(3,260,945)	(806,358)	(321,455)
Net (loss)/income from discontinued operations attributable to ordinary shareholders of Li Auto Inc.	(20,662)	14,373	—

Denominator:
Weighted average ordinary shares outstanding—basic and diluted	255,000,000	870,003,278	1,853,320,448

Basic and diluted net loss per share from continuing operations attributable to ordinary shareholders of Li Auto Inc.	(12.79)	(0.93)	(0.17)
Basic and diluted net (loss)/income per share from discontinued operations attributable to ordinary shareholders of Li Auto Inc.	(0.08)	0.02	—
Basic and diluted net loss per share attributable to ordinary shareholders of Li Auto Inc.	(12.87)	(0.91)	(0.17)

Taxation - Composition of income tax benefit (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Composition of income tax benefit
Deferred income tax (benefit)/expense	¥ (168,643)	$ (26,464)	¥ 22,847

Organization and Nature of Operations - Balance sheet (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)
Current assets:
Cash and cash equivalents	¥ 27,854,224	$ 4,370,936	¥ 8,938,341
Restricted cash	2,638,840	414,092	1,234,178
Time deposits and short-term investments	19,668,239	3,086,376	19,701,382
Trade receivable, net of allowance for credit losses of nil, and RMB467 as of December 31, 2020 and 2021, respectively	120,541	18,916	115,549
Inventories	1,617,890	253,882	1,048,004
Prepayments and other current assets, net of allowance for credit losses of nil, and RMB2,192 as of December 31, 2020 and 2021, respectively	480,680	75,429	353,655
Non-current assets:
Long-term investments	156,306	24,528	162,853	¥ 126,181	¥ 177,141
Property, plant and equipment, net	4,498,269	705,877	2,478,687
Operating lease right-of-use assets, net	2,061,492	323,493	1,277,006
Intangible assets, net	751,460	117,920	683,281
Other noncurrent assets, net of allowance for credit losses of nil, and RMB3,757 as of December 31, 2020 and 2021, respectively	1,981,076	310,872	321,184
Total assets	61,848,913	9,705,443	36,373,276
Current liabilities:
Short-term borrowings	37,042	5,813
Trade and notes payable	9,376,050	1,471,307	3,160,515
Amounts due to related parties	37,455	5,878	19,206
Operating lease liabilities, current	473,245	74,262	210,531
Deferred revenue, current	305,092	47,876	271,510	56,695
Accruals and other current liabilities	1,879,368	294,914	647,459
Noncurrent liabilities:
Long-term borrowings	5,960,899	935,395	511,638
Deferred revenue, noncurrent	389,653	61,145	135,658	5,943
Operating lease liabilities, noncurrent	1,369,825	214,955	1,025,253
Finance lease liabilities, noncurrent			366,883
Deferred tax liabilities, non-current	153,723	24,122	36,309
Other noncurrent liabilities	802,259	125,891	184,717
Total liabilities	20,784,611	3,261,558	6,569,679
Total shareholders' equity	41,064,302	6,443,885	29,803,597	¥ (5,674,531)	¥ (2,395,775)
Total liabilities and shareholders' equity	61,848,913	$ 9,705,443	36,373,276
VIEs and VIEs' subsidiaries
Current assets:
Cash and cash equivalents	5,311,800		1,546,193
Restricted cash	2,415,941		1,234,178
Time deposits and short-term investments	8,326,541		2,581,690
Trade receivable, net of allowance for credit losses of nil, and RMB467 as of December 31, 2020 and 2021, respectively	103,056		103,271
Amounts due from the Group companies	23,402,104		7,704,630
Inventories	1,396,992		271,379
Prepayments and other current assets, net of allowance for credit losses of nil, and RMB2,192 as of December 31, 2020 and 2021, respectively	220,402		254,061
Non-current assets:
Investment in subsidiaries			609,748
Long-term investments	97,854		97,937
Property, plant and equipment, net	2,329,507		2,335,824
Operating lease right-of-use assets, net	731,874		1,182,134
Intangible assets, net	703,274		682,083
Other noncurrent assets, net of allowance for credit losses of nil, and RMB3,757 as of December 31, 2020 and 2021, respectively	1,107,674		218,531
Total assets	46,147,019		18,821,659
Current liabilities:
Short-term borrowings	31,547
Trade and notes payable	8,547,181		3,107,646
Amounts due to the Group companies	31,999,140		12,203,705
Amounts due to related parties	1,277		19,206
Operating lease liabilities, current	80,606		170,033
Deferred revenue, current			230,720
Accruals and other current liabilities	515,036		453,731
Noncurrent liabilities:
Long-term borrowings	479,453		511,638
Deferred revenue, noncurrent	8,704		102,898
Operating lease liabilities, noncurrent	719,628		973,455
Finance lease liabilities, noncurrent			366,883
Deferred tax liabilities, non-current	153,723		36,309
Other noncurrent liabilities	14,333		157,907
Total liabilities	42,550,628		18,334,131
Total shareholders' equity	3,596,391		487,528
Total liabilities and shareholders' equity	¥ 46,147,019		¥ 18,821,659

Taxation

12 Months Ended

Dec. 31, 2021

Taxation

Taxation

27. 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.

(b)Income taxes

Cayman Islands

The Company was 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%.

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).

27. Taxation (Continued)

The Group does not intend to have any of its PRC subsidiaries or VIEs distribute any undistributed profits of such subsidiaries or VIEs to their direct overseas parent companies, but rather intends that such profits will be permanently reinvested by such subsidiaries and VIEs for their PRC operations. As of December 31, 2020 and 2021, the total amount of undistributed earnings from the Company’s PRC subsidiaries and VIEs that are considered to be permanently reinvested was RMB13,288 and RMB540,906 respectively. As of December 31, 2020 and 2021, determination of the amount of unrecognized deferred tax liability related to the earnings that are indefinitely reinvested is not practical.

The tax years ended December 31, 2017 through 2021 for the Company’s PRC subsidiaries and VIEs remain subject to examination by the PRC tax authorities.

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

Reconciliations 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 years presented are as follows:


	For the Year Ended December 31,
	2019	2020	2021
Loss before income tax expense	(2,417,874)	(188,877)	(152,812)
Income tax credit computed at PRC statutory income tax rate of 25%	(604,468)	(47,219)	(38,203)
Tax effect of tax‑exempt entity and preferential tax rate	230,669	30,140	(89,928)
Tax effect of R&D Deduction and others	(121,177)	(144,503)	(314,141)
Non‑deductible expenses	27,031	21,511	318,185
Change in valuation allowance	467,945	117,224	292,730
Income tax (benefit)/ expenses	—	(22,847)	168,643

27. Taxation (Continued)

(c)Deferred tax

The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more-likely-than-not realized. This assessment considers, among other matters, the nature, frequency and severity of recent loss and forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable income are consistent with the plans and estimates the Group is using to manage the underlying business. The statutory income tax rate of 25% or applicable preferential income tax rates were applied when calculating deferred tax assets.

The Group’s deferred tax assets (liabilities) consist of the following components:


	For the Year Ended December 31,
	2019	2020	2021
Deferred tax assets
Net operating loss carryforwards	717,495	1,144,397	1,119,659
Accrued expenses and others	12,545	66,773	228,734
Impairment of long-lived assets and allowance for credit losses	73,271	7,694	13,224
Acquisition of Changzhou Manufacturing Base Phase I and Phase II (Note 11)	—	—	11,969
Depreciation and amortization	26,946	16,220	190
Unrealized financing cost	27,520	13,125	—
Unrealized investment loss	29,664	—	—
Total deferred tax assets	887,441	1,248,209	1,373,776
Less: Valuation allowance	(887,441)	(1,004,665)	(1,297,395)
Deferred tax assets, net of valuation allowance	—	243,544	76,381
Deferred tax liabilities
Accelerated tax depreciation and others	—	(215,030)	(195,121)
Fair value change of certain investments	—	(5,667)	(15,087)
Total deferred tax liabilities	—	(220,697)	(210,208)
Deferred tax assets/(liabilities), net	—	22,847	(133,827)

A valuation allowance is provided against deferred tax assets when the Group determines that it is more-likely-than-not that the deferred tax assets will not be utilized in the future. Movement of valuation allowance is as follow:


	For the Year Ended December 31,
	2019	2020	2021
Valuation allowance
Balance at beginning of the year	419,496	887,441	1,004,665
Additions	467,945	148,458	395,955
Reversal	—	(31,234)	(103,225)
Balance at ending of the year	887,441	1,004,665	1,297,395

For the year ended December 31, 2021, Wheels Technology and Chongqing Lixiang Automobile had achieved pre-tax profit, and the Group forecasted these two subsidiaries are likely to continue to achieve pre-tax profit in 2022. As a result, the Group made an assessment and considered that the deferred tax assets for these two subsidiaries are more-likely-than-not to be utilized in the future, and therefore concluded that the previously recognized valuation allowance for these two subsidiaries should be reversed in income statement as an income tax benefit (i.e. a credit of income tax expense).

27. Taxation (Continued)

As of December 31, 2021, the Group had net operating loss carryforwards of approximately RMB5,624,288 mainly arose from the Group’s certain subsidiaries, VIEs and the VIEs’ subsidiaries established in the PRC, which can be carried forward to offset future taxable income and will expire during the period from 2022 to 2031. As of December 31, 2021, deferred tax assets arose from the net operating loss carryforwards amounting to RMB1,083,508 were provided for full valuation allowance, while the remaining RMB36,151 were expected to be utilized prior to expiration considering future taxable income for respective entities.

Uncertain Tax Position

The Group did not identify any significant unrecognized tax benefits for each of the periods presented. The Group did not incur any interest related to unrecognized tax benefits, did not recognize any penalties as income tax expense and also does not anticipate any significant change in unrecognized tax benefits within 12 months from December 31, 2021.

(d)Consumption tax

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 and 3% consumption tax rate from August 2021 and is recorded in cost of sales. As of December 31, 2021, the Group paid RMB287,891 comsumption tax and related surcharge.

- 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

Short-term Borrowings and Long-term Borrowings - Borrowings (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Sep. 30, 2021	Dec. 31, 2020 CNY (¥)
Debt Instrument [Line Items]
Total	¥ 5,997,941			¥ 511,638
Short-term borrowings	37,042	$ 5,813
Long-term borrowings	5,960,899	$ 935,395		511,638
Secured borrowing
Debt Instrument [Line Items]
Principal Amount				¥ 94,550
Interest Rate Per Annum				6.175%
Total				¥ 98,717
Unsecured corporate loan
Debt Instrument [Line Items]
Principal Amount				¥ 401,073
Interest Rate Per Annum				6.175%
Total				¥ 412,921
Convertible debt
Debt Instrument [Line Items]
Principal Amount	¥ 862,500
Interest Rate Per Annum	0.25%	0.25%
Total	¥ 5,397,941
Secured bank loan
Debt Instrument [Line Items]
Principal Amount	¥ 600,000
Interest Rate Per Annum	4.80%	4.80%	4.80%
Total	¥ 600,000
Long-term borrowings	¥ 562,958

Taxation - Movement of valuation allowance (Details) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥) subsidiary	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Valuation allowance
Balance at beginning of the year	¥ 1,004,665	¥ 887,441	¥ 419,496
Additions	395,955	148,458	467,945
Reversal	(103,225)	(31,234)
Balance at ending of the year	¥ 1,297,395	¥ 1,004,665	¥ 887,441
Number of subsidiaries \| subsidiary	2

Selling, General and Administrative Expenses

12 Months Ended

Dec. 31, 2021

Selling, General and Administrative Expenses.

Selling, General and Administrative Expenses

21. Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of the following:


	For the Year Ended December 31,
	2019	2020	2021
Employee compensation	238,368	449,109	1,414,177
Marketing and promotional expenses	176,383	264,814	1,100,769
Rental and related expenses	78,897	162,907	324,655
Depreciation and amortization expenses	57,650	37,923	82,777
Travel expenses	20,171	20,806	69,079
Expected credit losses	—	—	6,415
Impairment of property, plant and equipment	18,066	30,381	—
Others	99,844	152,879	494,513
Total	689,379	1,118,819	3,492,385

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Summary of Significant Accounting Policies

Basis of presentation

(a)Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

Significant accounting policies followed by the Group in the preparation of its accompanying consolidated financial statements are summarized below.

Principles of consolidation

(b)Principles of consolidation

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

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, bears the risks of, and enjoys the rewards normally associated with, ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity.

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

Use of estimates

(c)Use of estimates

The preparation of the 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 consolidated financial statements and accompanying notes.

Significant accounting estimates reflected in the Group’s consolidated financial statements 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, fair value of warrant liabilities and derivative liabilities, 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, 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.

Functional currency and foreign currency translation

(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 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 consolidated statements of comprehensive 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 consolidated statements of comprehensive loss, and the accumulated foreign currency translation adjustments are presented as a component of accumulated other comprehensive income/(loss) in the consolidated statements of shareholders’ (deficit)/equity. Total foreign currency translation adjustment income was RMB2,851 for the year ended December 31, 2019 and the foreign currency translation adjustment loss were RMB1,020,728 and RMB516,687 for the years ended December 31, 2020 and 2021 respectively.

Convenience translation

(e)Convenience translation

Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive loss and consolidated statements of cash flows from RMB into US$ as of and for the year ended December 31, 2021 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB6.3726, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 30, 2021. No representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2021, or at any other rate.

Cash, cash equivalents and restricted cash

(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, 2020 and 2021, 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 RMB17,844 and RMB33,540, respectively, which have been classified as cash and cash equivalents on the consolidated financial statements.

Cash that is restricted as to withdrawal for use or pledged as security is reported separately on the face of the consolidated balance sheets and is not included in the total cash and cash equivalents in the 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 15).

2. Summary of Significant Accounting Policies (Continued)

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


	As of December 31,
	2020	2021
Cash and cash equivalents	8,938,341	27,854,224
Restricted cash	1,234,178	2,638,840
Total cash, cash equivalents and restricted cash	10,172,519	30,493,064

Time deposits and short-term investments

(g)Time deposits and short-term investments

Time deposits are those balances placed with the banks with original maturities longer than three months but less than one year.

Short-term investments are investments in financial instruments with variable interest rates. These financial instruments have maturity dates within one year and are classified as short-term investments. 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 consolidated statements of comprehensive loss as “Interest income and investment income, net.”

Trade receivables and current expected credit losses

(h)Trade receivables and current expected credit losses

Trade receivable primarily include 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 doubtful accounts for trade receivable was recognized for the years ended December 31, 2019 and 2020.

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. Primarily as a result of the macroeconomic and market turmoil caused by COVID-19, the Group updated the model based on the continuously monitoring result and took the latest available information into consideration.

The Group adopted this 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 provision for the current assets and non-current assets were RMB972 and RMB983, respectively. For the year ended December 31, 2021, the Group recorded RMB6,415 in expected credit losses in selling, general and administrative expenses. As of December 31, 2021, the expected credit loss provision recorded in current assets and non-current assets were RMB2,659 and RMB3,757, respectively.

2. Summary of Significant Accounting Policies (Continued)

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 year ended December 31, 2021:


		For the year ended
		December 31, 2021
Balance as of December 31, 2020		—
Impact of adoption of ASC 326		1,955
Balance as of January 1, 2021		1,955
Provisions		6,415
Write-offs		(1,954)
Balance as of December 31, 2021		6,416

Derivative instruments

(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 consolidated statements of comprehensive loss or in other comprehensive income/(loss) depending on the use of the derivatives and whether they qualify for hedge accounting.

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 consolidated statements of comprehensive 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.

As of December 31, 2021, the outstanding balance of derivative instruments was nil due to maturity of derivative instruments. The Company recorded the fair value gain of RMB73,824 in Interest income and investment income, net on the consolidated statement of comprehensive loss for the year ended December 31, 2021.

Inventories

(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. No inventory write-downs were recognized for the years ended December 31, 2019 and 2020. The inventory write-downs for the year ended December 31, 2021 were immaterial.

Property, plant and equipment, net

(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.

The estimated useful lives are as follows:


		Useful Lives
Buildings		20 years
Buildings improvements		5 to 10 years
Production facilities		5 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 consolidated statements of comprehensive loss.

Intangible assets, net

(m)Intangible assets, net

Definite lived intangible assets are carried at cost less accumulated amortization and impairment, if any. Definite lived intangible assets are amortized using the straight-line method over the estimated useful lives as below:


		Useful Lives
Software and Patents		5 to 10 years

The Company estimates the useful life of the software and patents to be 5 to 10 years based on the contract terms, expected technical obsolescence and innovations and industry experience of such intangible assets.

Intangible assets that have indefinite useful life represent the automotive manufacturing permission, which is necessary to produce the passenger vehicles. No useful life was determined in the contract terms when the Company acquired the automotive manufacturing permission. The Company expects that the automotive manufacturing permission is unlikely to be terminated based on industry experience and will continue to contribute revenue in the future. Therefore, the Company considers the useful life of this intangible assets to be indefinite.

Impairment of long-lived assets and intangible assets with indefinite lives

(n)Impairment of long-lived assets and intangible assets with indefinite lives

Long-lived assets include property, plant and equipment and intangible assets with definite lives. Long-lived assets are assessed for impairment, whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate the carrying value of an asset may not be recoverable in accordance with ASC 360. The Company measures the carrying amount of long-lived assets against the estimated undiscounted future cash flows associated with it. The impairment exists when the estimated undiscounted future cash flows are less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value. RMB18,066, RMB30,381 and RMB27,389 impairment of long-lived assets were recognized for the years ended December 31, 2019, 2020 and 2021, respectively.

2. Summary of Significant Accounting Policies (Continued)

Intangible assets with indefinite lives are tested for impairment at least annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired in accordance with ASC 350. The Company first performs a qualitative assessment to assess all relevant events and circumstances that could affect the significant inputs used to determine the fair value of the indefinite-lived intangible asset. If after performing the qualitative assessment, the Company determines that it is more likely than not that the indefinite-lived intangible asset is impaired, the Company calculates the fair value of the intangible asset and perform the quantitative impairment test by comparing the fair value of the asset with its carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, the Company recognizes an impairment loss in an amount equal to that excess. In consideration of the growing electric vehicle industry in China, the Group’s improving financial performance, the stable macroeconomic conditions in China and the Group’s future manufacturing plans, the Company determined that it is not likely that the indefinite-lived intangible assets was impaired as of December 31, 2019, 2020 and 2021.

Long-term investments

(o)Long-term investments

Long-term investments are comprised of investments in publicly traded companies and privately-held companies.

The Group adopted ASU 2016-01 on January 1, 2018. The Group measures equity investments other than equity method investments at fair value through earnings. For those equity investments without readily determinable fair values, the Group elects to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the equity investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. The implementation guidance notes that an entity should make a “reasonable efforts” to identify price changes that are known or that can reasonably be known.

Pursuant to ASC 321, for equity investments measured at fair value with changes in fair value recorded in earnings, the Group does not assess whether those securities are impaired. For those equity investments that the Group elects to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss equal to the difference between the carrying value and fair value.

Investments in entities over which the Group can exercise significant influence and hold an investment in common shares or in-substance common shares (or both) of the investee but do not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC topic 323, Investment—Equity Method and Joint Ventures (“ASC 323”). Under the equity method, the Group initially records its investments at cost and the difference between the cost of the equity investee and the fair value of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill, which is included in the equity method investment on our consolidated balance sheets. The Group subsequently adjusts the carrying amount of the investments to recognize our proportionate share of each equity investee’s net income or loss into earnings after the date of investment. The Group evaluates the equity method investments for impairment under ASC 323. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary.

The Group assesses its investments in privately-held companies for impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the companies, including current earnings trends and undiscounted cash flows, and other company-specific information, such as recent financing rounds. The fair value determination, particularly for investments in privately-held companies whose revenue model is still unclear, requires significant judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investments. If this assessment indicates that an impairment exists, the Group estimates the fair value of the investment and writes down the investment to its fair value, taking the corresponding charge to the consolidated statements of comprehensive loss.

Employee benefits

(p)Employee benefits

Full time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiaries and VIEs and VIEs’ subsidiaries of the Group make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions made. Total amounts of such employee benefit expenses, which were expensed as incurred, were approximately RMB168,019, RMB133,162 and RMB482,536 for the years ended December 31, 2019, 2020 and 2021, respectively.

Product warranties

(q)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 consolidated balance sheets. Warranty cost is recorded as a component of cost of sales in the consolidated statements of comprehensive 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.

In November 2020, the Group initiated the voluntary recall for vehicles produced on or before June 1, 2020 and communicated its intention to replace, free of charge, the control arm ball joint of the front suspension of Li ONEs in accordance with necessary safety measures. In addition to product warranties, the Company recognized the estimated costs of the recall as incurred.

The accrued warranty activity consists of the following:


	For the Year Ended December 31,
	2019	2020	2021
Accrued warranty at beginning of the year	—	6,996	233,366
Warranty cost incurred	(163)	(8,258)	(22,558)
Provision for warranty	7,159	234,628	631,537
Accrued warranty at end of the year	6,996	233,366	842,345
Including: Accrued warranty, current	1,477	55,138	154,276
Accrued warranty, non-current	5,519	178,228	688,069

Revenue recognition

(r)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(Note 9). Revenues of the Group are primarily derived from sales of vehicle, 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.

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 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 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 ONE to a customer.

2. Summary of Significant Accounting Policies (Continued)

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 theshold 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 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.

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 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.

2.Summary of Significant Accounting Policies (Continued)

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 Company earns the tradable new energy vehicle credits from the production of the Company’s electric vehicles. The Company sells these credits at agreed price to other regulated entities who can use the credits to comply with the regulatory requirements. The Company 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 Company 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 ONE and recognized as revenue upon transfer of control of the vehicles, which is within one year after entering the sales contracts.

Cost of sales

(s)Cost of sales

Cost of sales consists of direct production and material costs, labor costs, manufacturing overhead (including depreciation of assets associated with the production), shipping and logistic costs and reserves for estimated warranty costs. The cost of sales also includes adjustments to warranty costs and charges to write-down the carrying value of the inventory when it exceeds its estimated net realizable value and to provide for on-hand inventory that is either obsolete or in excess of forecasted demand.

Research and development expenses

(t)Research and development expenses

Research and development (“R&D”) expenses are primary comprised of salaries, bonuses, benefits and share-based compensation for those employees engaged in research, design and development activities; design and development expenses, primarily includes consultation fees, validation and testing fees; depreciation and amortization expenses of equipment and software of R&D activities and other expenses. R&D costs are expensed as incurred.

Sales and marketing expenses

(u)Sales and marketing expenses

Sales and marketing expenses consist primarily of salaries and other compensation related expenses for sales and marketing personnel, marketing and promotional expenses, rental and related expenses for retail stores and delivery and servicing centers and other expenses.

General and administrative expenses

(v)General and administrative expenses

General and administrative expenses consist primarily of salaries, bonuses, benefits and share-based compensation for employees involved in general corporate functions, including finance, legal and human resources, depreciation and amortization expenses primarily relating to leasehold improvements, factory buildings, facilities, and equipment prior to the start of production, rental and other general corporate related expenses.

Fair value

(w)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.

Share-based compensation

(x)Share-based compensation

The Company grants share options to eligible employees, directors and consultants and accounts for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation.

Employees’ share-based compensation awards granted with service conditions and the occurrence of an qualified IPO as performance condition, are measured at the grant date fair value. Cumulative share-based compensation expenses for the options that have satisfied the service condition should be recorded upon the completion of the US IPO, using the graded-vesting method. This performance condition was met upon the completion of the Company’ US IPO in August 2020 and the associated share-based compensation expense for awards vested as of that date were recognized. Employees’ share-based compensation awards granted with only service conditions are recognized as expenses over the vesting period, using the graded vesting method, net of estimated forfeitures.

The binomial option-pricing model is used to measure the value of share options. The determination of the fair value is affected by the fair value of the ordinary shares as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, risk-free interest rates and expected dividends. The fair value of these awards was determined taking into account these factors.

The assumptions used in share-based compensation expense recognition represent management’s best estimates, but these estimates involve inherent uncertainties and application of management judgment. If factors change or different assumptions are used, the share-based compensation expenses could be materially different for any period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company for accounting purposes.

Taxation

(y)Taxation

Current income taxes are recorded in accordance with the regulations of the relevant tax jurisdiction. The Group accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Tax. Under this method, deferred tax assets and liabilities are recognized for the tax consequences attributable to differences between carrying amounts of existing assets and liabilities in the financial statements and their respective tax basis, and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive loss in the period of change. Valuation allowances are established when necessary to reduce the amount of deferred tax assets if it is considered more likely than not that amount of the deferred tax assets will not be realized.

The Group records liabilities related to uncertain tax positions when, despite the Group’s belief that the Group’s tax return positions are supportable, the Group believes that it is more likely than not that those positions may not be fully sustained upon review by tax authorities. Accrued interest and penalties related to unrecognized tax benefits are classified as income tax expense. The Group did not recognize uncertain tax positions as of December 31, 2020 and 2021.

Discontinued operations

(z)Discontinued operations

Discontinued operations are reported when a component of the Group comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the Group is classified as held for disposal or has been disposed of, if the disposal of the component (1) represents a strategic shift and (2) have a major impact on the Group’s financial results. In the consolidated statements of comprehensive loss, results from discontinued operations is reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. Cash flows for discontinuing operations are presented separately in the consolidated statements of cash flow and Note 22. In order to present the financial effects of the continuing operations and discontinued operations, revenues and expenses arising from intra-group transactions are eliminated except for those revenues and expenses that are considered to continue after the disposal of the discontinued operations.

Leases

(aa)Leases

The Group accounts for leases in accordance with ASC 842, Leases (“ASC 842”), which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The Group adopted ASC 842 on January 1, 2018, along with all subsequent ASU clarifications and improvements that are applicable to the Group, to each lease that existed in the periods presented in the financial statements, using the modified retrospective transition method and used the commencement date of the leases as the date of initial application. Consequently, financial information and the disclosures required under ASC 842 are provided for dates and periods presented in the financial statements. The Company elected not to apply the recognition requirements of ASC 842 to short-term leases. The Company also elected not to separate non-lease components from lease components, therefore, it will account for lease component and the non-lease components as a single lease component when there is only one vendor in the lease contract. The adoption of ASC 842 resulted in recognition of right of use (“ROU”) assets of RMB158,770, current operating lease liabilities of RMB14,575 and non-current operating lease liabilities of RMB142,751 upon the adoption date.

The Group determines if a contract contains a lease based on whether it has the right to obtain substantially all of the economic benefits from the use of an identified asset which the Group does not own and whether it has the right to direct the use of an identified asset in exchange for consideration. ROU assets represent the Group’s right to use an underlying asset for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. ROU assets are recognized as the amount of the lease liability, adjusted for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Group’s incremental borrowing rate (“IBR”), because the interest rate implicit in most of the Group’s leases is not readily determinable. The IBR is a hypothetical rate based on the Group’s understanding of what its credit rating would be to borrow and resulting interest the Group would pay to borrow an amount equal to the lease payments in a similar economic environment over the lease term on a collateralized basis. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in the Group’s lease liability calculation. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred.

The land use rights are operating leases with term of about 50 years. Other than the land use rights, the lease terms of operating and finance leases vary from more than a year to 20 years. Operating leases are included in operating lease right of use assets, current and non-current operating lease liabilities on the Group’s consolidated balance sheets. Finance leases are included in property, plant and equipment, net, current and non-current finance lease liabilities on the Group’s consolidated balance sheets. As of December 31, 2021, all of the Group’s ROU assets were generated from leased assets in the PRC.

In a sale and leaseback transaction, one party (the seller-lessee) sells an asset it owns to another party (the buyer-lessor) and simultaneously leases back all or a portion of the same asset for all, or part of, the asset’s remaining economic life. The seller-lessee transfers legal ownership of the asset to the buyer-lessor in exchange for consideration, and then makes periodic rental payments to the buyer-lessor to retain the use of the asset. The Company applies requirements in Topic 606 on revenue from contracts with customers when determining whether the transfer of an asset shall be accounted for as a sale of the asset.

An option for the seller-lessee to repurchase the asset would preclude accounting for the transfer of the asset as a sale of the asset unless both of the following criteria are met:

The exercise price of the option is the fair value of the asset at the time the option is exercised.

There are alternative assets, substantially the same as the transferred asset, readily available in the marketplace.

Loss per share

(aa)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 conversion of the Preferred Shares, using the if-converted method, for periods prior to the completion of the US IPO, and 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.

Comprehensive loss

(ab)Comprehensive loss

Comprehensive loss is defined to include all changes in equity/(deficit) of the Group during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Accumulated other comprehensive income, as presented in the consolidated balance sheets, consists of accumulated foreign currency translation adjustments.

Segment reporting

(ac)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 segments are presented.

Trade and Notes Payable (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Trade and Notes Payable
Trade payable for raw materials	¥ 7,089,370		¥ 2,991,538
Notes payable	2,286,680		168,977
Total	¥ 9,376,050	$ 1,471,307	¥ 3,160,515

Convertible Redeemable Preferred Shares and Warrants

12 Months Ended

Dec. 31, 2021

Convertible Redeemable Preferred Shares and Warrants

Convertible Redeemable Preferred Shares and Warrants

24. Convertible Redeemable Preferred Shares and Warrants

Prior to the US IPO in August 2020, the Company issued convertible redeemable preferred shares, which are summarized in the following table:


Series	Issuance Date	Shares Issued	Issue Price per Share	Proceeds from Issuance
			RMB	RMB
Pre-A⁽¹⁾	July 21, 2017	50,000,000	RMB2.00	100,000
A-1	July 4, 2016	129,409,092	RMB6.03	780,000
A-2	July 21, 2017	126,771,562	RMB7.89	1,000,000
A-3	September 5, 2017	65,498,640	RMB9.47	620,000
B-1	November 28, 2017	115,209,526	RMB13.11	1,510,000
B-2	June 6, 2018	55,804,773	RMB14.16	790,000
B-3⁽²⁾	January 7/July 2, 2019	119,950,686	RMB14.16	1,701,283
C⁽³⁾	July 2/December 2,2019/January 23, 2020	267,198,535	US$2.23/ US$1.89	3,626,924
D	July 1, 2020	231,758,541	US$2.64/ US$2.35	3,851,034

(1)

Upon the issuance of Series A-2 Preferred Shares, Series Pre-A Ordinary Shares were re-designated to Series Pre-A Preferred Shares (see Note 23).

(2)

(3)

On January 23, 2020, 18,916,548 shares of Series C Preferred Shares were issued upon the exercise of the Series B-3 Anti-Dilution Warrant.

The Series B-3 Anti-Dilution Warrant, the Series B-3 Additional Warrant and the Series C Additional Warrant (collectively referred as “Warrants”) were determined to be freestanding liability instruments and recorded at fair value upon initial recognition. Proceeds received from issuance of Series B-3 Preferred Shares and convertible promissory notes, and Series C Preferred Shares were first allocated to the Warrants based on their initial fair values. The Warrants were marked to the market with the changes recorded in the consolidated statements of comprehensive loss in the applicable subsequent reporting period. The Warrants shall terminate upon the earlier of the consummation of an IPO or the occurrence of a Deemed Liquidation Event. The balance of Warrants was reduced to zero as the Warrants terminated upon the issuance of Series D.

24. Convertible Redeemable Preferred Shares and Warrants (Continued)

The Series Pre-A, A-1, A-2, A-3, B-1, B-2, B-3, C and D Preferred Shares are collectively referred to as the “Preferred Shares”. All series of Preferred Shares have the same par value of US$0.0001 per share.

All of the Preferred Shares (other than those beneficially owned by Mr. Li Xiang, the founder and the chief executive officer of the Company) were automatically converted to 1,045,789,275 Class A Ordinary Shares immediately upon the completion of the US IPO in August 2020. Concurrently, all Preferred Shares beneficially owned by Mr. Li Xiang were automatically converted to 115,812,080 Class B Ordinary Shares.

The major rights, preferences and privileges of the Preferred Shares are as follows:

Conversion

Preferred Shares of the Company are convertible to Class A Ordinary Shares at any time at the option of the holders, and would automatically be converted into Class A Ordinary Shares 1) upon a Qualified IPO (“QIPO”); or 2) upon the written consent of the holders of a majority of the outstanding Preferred Shares of each class with respect to conversion of each class.

The initial conversion ratio of Preferred Shares to ordinary shares shall be 1:1, and shall be subject to adjustment and readjustment from time to time for share splits and combinations, ordinary share (on an as converted basis) dividends and distributions, reorganizations, mergers, consolidations, reclassifications, exchanges, substitutions, and dilutive issuance.

Redemption

The Company shall redeem, at the option of any holder of outstanding Preferred Shares, all of the outstanding Preferred Shares (other than the unpaid shares) held by the requesting holder, at any time after the earliest to occur of (a) the Company fails to consummate a qualified IPO (“QIPO”) by June 30, 2023, or b) any occurrence of a material breach or any material change of the relevant laws or the occurrence of any other factors, which has resulted or is likely to result in the Company’s inability to control and consolidate the financial statements of any of the PRC subsidiaries or VIEs, each Preferred Share shall be redeemable at the option of such Preferred Shareholder, out of funds legally available therefor by the Company.

The redemption amount payable for each Preferred Share (other than the unpaid shares) will be an amount equal to 100% of the Preferred Shares’ original issue price, plus all accrued but unpaid dividends thereon up to the date of redemption and simple interest on the Preferred Shares’ original issue price at the rate of 8% per annum, proportionally adjusted for share subdivisions, share dividends, reorganizations, reclassifications, consolidations, mergers or similar transactions.

Upon the redemption, Series D Preferred Shares shall rank senior to Series C Preferred Shares, Series C Preferred Shares shall rank senior to Series B-3 Preferred Shares, Series B-3 Preferred Shares shall rank senior to Series B-2 Preferred Shares, Series B-2 Preferred Shares shall rank senior to Series B-1 Preferred Shares, Series B-1 Preferred Shares shall rank senior to Series A-3 Preferred Shares, Series A-3 Preferred Shares shall rank senior to Series A-2 Preferred Shares, Series A-2 Preferred Shares shall rank senior to Series A-1 Preferred Shares, Series A-1 Preferred Shares shall rank senior to Series Pre-A Preferred Shares.

24. Convertible Redeemable Preferred Shares and Warrants (Continued)

Upon the 2019 Reorganization, QIPO definition of Series Pre-A, A-1, A-2, A-3, B-1, B-2 and B-3 Preferred Shares was revised to be the same as Series C Preferred Shares, and all Preferred Shareholders (including Series D issued on July 1, 2020) were given the option to, in the event that the funds of the Company legally available for redemption on the redemption date are insufficient to redeem the total number of redeeming shares required to be redeemed, 1) request the Company to issue a convertible promissory note (“Redemption Note”) for the unpaid portion of the redemption price or 2) allow the Company to carry forward and redeem the shares when legally funds are sufficient to do so. Such Redemption Note shall be due and payable no later than 24 months of the redemption date with a simple rate of 8% per annum. Each holder of such Redemption Note shall have the right, at its option, to convert the unpaid principal amount of the Redemption Note and the accrued but unpaid interest thereon, into the same class of Preferred Shares requested to be redeemed at a per share conversion price equal to the applicable original issue price.

Voting Rights

The holders of the Preferred Shares shall have the right to one vote for each ordinary share into which each outstanding Preferred Share held could then be converted. The holders of the Preferred Shares vote together with the Ordinary Shareholders, and not as a separate class or series, on all matters put before the shareholders.

Dividends

Each Preferred Shareholder and Ordinary Shareholder shall be entitled to receive dividends for each share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor pari passu with each other on a pro rata basis. Such dividends shall be payable only when, as, and if declared by the Board of Directors and shall be non-cumulative.

No dividends on preferred and ordinary shares have been declared since the issuance date until December 31, 2021.

Liquidation

In the event of any liquidation, the holders of Preferred Shares (except for Series Pre-A Preferred Shares) have preference over holders of Series Pre-A Preferred Shares and ordinary shares with respect to payment of dividends and distribution of assets. Upon Liquidation, Series D Preferred Shares shall rank senior to Series C Preferred Shares, Series C Preferred Shares shall rank senior to Series B-3 Preferred Shares, Series B-3 Preferred Shares shall rank senior to Series B-2 Preferred Shares, Series B-2 Preferred Shares shall rank senior to Series B-1 Preferred Shares, Series B-1 Preferred Shares shall rank senior to Series A-3 Preferred Shares, Series A-3 Preferred Shares shall rank senior to Series A-2 Preferred Shares, Series A-2 Preferred Shares shall rank senior to Series A-1 Preferred Shares, Series A-1 Preferred Shares shall rank senior to Series Pre-A Preferred Shares and ordinary shares.

The holders of Preferred Shares (exclusive of unpaid shares and Series Pre-A Preferred Shares) shall be entitled to receive an amount per share equal to an amount equal to the higher of (1) 100% of the original issue price of such Preferred Shares, plus an aggregate interests calculated at a simple rate of 8% per annum and multiplied by a fraction and (2) the amount receivable by the Preferred Shareholders if all the assets of the Company available for distribution to shareholders is distributed ratably among all the Members on an as-converted basis. If there are still assets of the Company legally available for distribution, such remaining assets of the Company shall be distributed to the holders of issued and outstanding Series Pre-A Preferred Shares and ordinary shares.

24. Convertible Redeemable Preferred Shares and Warrants (Continued)

Conversion upon US IPO

In August 2020, in connection with the completion of US IPO, all of the Preferred Shares were automatically converted to 1,045,789,275 Class A ordinary shares and 115,812,080 Class B ordinary shares based on the aforementioned conversion price.

Accounting for Preferred Shares

The Company classified the Preferred Shares as mezzanine equity in the consolidated balance sheets because they were redeemable at the holders’ option upon the occurrence of certain deemed liquidation events and certain event outside of the Company’s control. The Preferred Shares are recorded initially at fair value, net of issuance costs.

The Company recognized accretion to the respective redemption value of the Preferred Shares over the period starting from issuance date to July 4, 2022, the earliest redemption date. The Company recognized accretion of the Preferred Shares amounted to RMB743,100, RMB651,190 and nil for the years ended December 31, 2019, 2020 and 2021, respectively.

Prior to the 2019 Reorganization, the Company has determined that host contract of the Series Pre-A, A-1, A-2, A-3, B-1, B-2 and B-3 Preferred Shares were more akin to an equity host. The conversion feature embedded in the Preferred Shares is considered to meet the definition of derivative in accordance with ASC 815-15-25, due to the optional redemption settlement mechanism upon deemed liquidation could give rise to net settlement of the conversion provision in cash if the per share distribution amount is higher than the fixed redemption amount, instead of the settlement by delivery of the ordinary shares of the Company. This equity-like conversion feature was considered clearly and closely related to the equity host, therefore does not warrant bifurcation. The Company also assessed the redemption features and liquidation feature and determined that these features as a freestanding instrument, would not meet the definition of a derivative, and therefore need not be bifurcated and separately accounted for.

After the 2019 Reorganization, host contract of the Preferred Shares is more akin to a debt host, given the Preferred Shares holders have potential creditors’ right in the event of insufficient fund upon redemption, along with other debt-like features in the terms of the Preferred Shares, including the redemption rights. Company considered extinguishment accounting should be applied for all Preferred Shares issued prior to the 2019 Reorganization from a qualitative perspective, although from quantitative perspective, the changes of these preferred shares’ fair value before and after the modification was immaterial. Hence, accumulated deficit was increased by the difference between the fair value of Series Pre-A, A-1, A-2, A-3, B-1, B-2 and B-3 Preferred Shares after modification and the carrying amount of these Preferred Shares immediately before the modification.

The Company also reassessed the conversion feature, redemption feature and liquidation preference of all Preferred Shares after the 2019 Reorganization. The equity-like conversion feature is considered not clearly and closely related to the debt host, and therefore was bifurcated and separately accounted for using fair value. For redemption feature, as it would not result in any substantial premium or discount, nor would it accelerate the repayment of the contractual principal amount, it is clearly and closely related to the debt host, and therefore shall not be bifurcated and accounted for separately. The liquidation preference, on the other hand, may result in substantial premium and could accelerate repayment of the principal upon occurrence of contingent redemption events. Hence, the liquidation preference is considered not clearly and closely related to the debt host and should be bifurcated and accounted for separately. The Company determined the fair value of these derivative liabilities and concluded that the fair value of the bifurcated liquidation features was insignificant. The derivative liabilities of conversion features was bifurcated from the preferred shares initially at fair value, and subsequently was marked to market value with the fair value change recognized in the consolidated statements of comprehensive loss in the applicable subsequent reporting period. Upon the consummation of US IPO and conversion of preferred shares, the conversion feature of preferred shares were automatically exercised, consequently, the derivative liabilities of conversion features was reduced to zero.

24. Convertible Redeemable Preferred Shares and Warrants (Continued)

The movement of the warrants and conversion feature derivative liabilities are summarized below:


	Warrants	Derivative
	Liabilities	Liabilities	Total
Balance at January 1, 2019	—	—	—
Issuance	174,846	1,066,013	1,240,859
Fair value change	292,305	211,859	504,164
Exercise	(45,858)	—	(45,858)
Expire(*)	(77,739)	—	(77,739)
Translation to reporting currency	8,196	19,068	27,264
Balance at December 31, 2019	351,750	1,296,940	1,648,690
Issuance	—	328,461	328,461
Fair value change	(46,812)	(225,515)	(272,327)
Exercise	(305,333)	(1,400,670)	(1,706,003)
Translation to reporting currency	395	784	1,179
Balance at December 31, 2020	—	—	—

(*)

24. Convertible Redeemable Preferred Shares and Warrants (Continued)

The Company’s convertible redeemable preferred shares activities for the years ended December 31, 2019 and 2020 are summarized below:


	Series Pre‑A		Series A‑1		Series A‑2		Series A‑3		Series B‑1		Series B‑2		Series B‑3		Series C		Series D		Total
	Number	Amount	Number	Amount	Number	Amount	Number	Amount	Number	Amount	Number	Amount	Number	Amount	Number	Amount	Number	Amount	Number	Amount
	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)	of shares	(RMB)
Balances as of January 1, 2019	50,000,000	175,847	129,409,092	907,658	126,771,562	1,099,816	65,498,640	676,458	115,209,526	1,621,561	48,656,111	717,699	—	—	—	—	—	—	535,544,931	5,199,039
Proceeds from Series B-2 preferred shares	—	—	—	—	—	-	—	—	—	—	7,148,662	101,200	—	—	—	—	—	—	7,148,662	101,200
Conversion of convertible promissory notes into Series B-3 Preferred Shares	—	—	—	—	—	—	—	—	—	—	—	—	11,873,086	166,549	—	—	—	—	11,873,086	166,549
Issuance of Series B-3 Preferred Shares	—	—	—	—	—	—	—	—	—	—	—	—	108,077,600	1,395,015	—	—	—	—	108,077,600	1,395,015
Issuance of Series C Preferred Shares	—	—	—	—	—	—	—	—	—	—	—	—	—	—	248,281,987	3,616,801	—	—	248,281,987	3,616,801
Deemed dividend to/(contribution from) preferred shareholders upon extinguishment	—	281,638	—	284,655	—	115,806	—	(15,139)	—	(310,359)	—	(130,312)	—	(8,927)	—	—	—	—	—	217,362
Bifurcation of conversion feature	—	(14,549)	—	(254,121)	—	(212,055)	—	(92,256)	—	(105,702)	—	(47,231)	—	(108,190)	—	(231,909)	—	—	—	(1,066,013)
Accretion on convertible redeemable preferred shares to redemption value	—	—	—	60,249	—	90,077	—	61,299	—	164,540	—	80,891	—	133,798	—	152,246	—	—	—	743,100
Effect of exchange rate changes on preferred shares	—	(8,050)	—	(17,492)	—	(18,685)	—	(10,592)	—	(22,433)	—	(11,944)	—	(27,165)	—	(1,030)	—	—	—	(117,391)
Balances as of December 31, 2019	50,000,000	434,886	129,409,092	980,949	126,771,562	1,074,959	65,498,640	619,770	115,209,526	1,347,607	55,804,773	710,303	119,950,686	1,551,080	248,281,987	3,536,108	—	—	910,926,266	10,255,662
Exercise of Series B-3 Anti-Dilution Warrant	—	—	—	—	—	—	—	—	—	—	—	—	—	—	18,916,548	305,333	—	—	18,916,548	305,333
Bifurcation of conversion feature	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	(81,082)	—	—	—	(81,082)
Issuance of preferred shares-Series D	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	231,758,541	3,603,655	231,758,541	3,603,655
Accretion on convertible redeemable preferred shares to redemption value	—	—	—	34,229	—	63,363	—	46,738	—	136,567	—	64,859	—	80,635	—	178,007	—	46,792	—	651,190
Effect of exchange rate changes on preferred shares	—	(858)	—	(1,746)	—	(1,770)	—	(964)	—	(1,899)	—	(1,040)	—	(2,613)	—	28	—	—	—	(10,862)
Conversion of preferred shares to ordinary shares	(50,000,000)	(434,028)	(129,409,092)	(1,013,432)	(126,771,562)	(1,136,552)	(65,498,640)	(665,544)	(115,209,526)	(1,482,275)	(55,804,773)	(774,122)	(119,950,686)	(1,629,102)	(267,198,535)	(3,938,394)	(231,758,541)	(3,650,447)	(1,161,601,355)	(14,723,896)
Balances as of December 31, 2020	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

Discontinued Operations - Cash flows (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash flows
Net cash (used in)/provided by discontinued operating activities	¥ 148	¥ (11,395)
Net cash (used in)/provided by discontinued investing activities	59,705	(10,565)
Discontinued Operations, Held-for-sale \| SEV related business
Cash flows
Net cash (used in)/provided by discontinued operating activities	148	(11,395)
Net cash (used in)/provided by discontinued investing activities	¥ 59,705	¥ (10,565)

Restricted Net Assets

12 Months Ended

Dec. 31, 2021

Restricted Net Assets.

Restricted Net Assets

31. Restricted Net Assets

The Group’s ability to pay dividends is primarily dependent on the Group receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Group’s subsidiaries, consolidated VIEs and VIEs’ subsidiaries incorporated in PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements prepared in accordance with US GAAP differ from those reflected in the statutory financial statements of the Group’s subsidiaries.

In accordance with the PRC Regulations on Enterprises with Foreign Investment, a foreign invested enterprise established in the PRC is required to provide certain statutory reserve funds, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profits as reported in the enterprise’s PRC statutory financial statements. A foreign invested enterprise is required to allocate at least 10% of its annual after-tax profits to the general reserve fund until such reserve fund has reached 50% of its registered capital based on the enterprise’s PRC statutory financial statements. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors for all foreign invested enterprises. The aforementioned reserved funds can only be used for specific purposes and are not distributable as cash dividends.

Additionally, in accordance with the Company Law of the PRC, a domestic enterprise is required to provide statutory surplus fund at least 10% of its annual after-tax profits until such statutory surplus fund has reached 50% of its registered capital based on the enterprise’s PRC statutory financial statements. A domestic enterprise is also required to provide discretionary surplus fund, at the discretion of the board of directors, from the net profits reported in the enterprise’s PRC statutory financial statements. The aforementioned reserve funds can only be used for specific purposes and are not distributable as cash dividends.

31. Restricted Net Assets (Continued)

As a result of these PRC laws and regulations that require annual appropriations of 10% of net after-tax profits to be set aside prior to payment of dividends as general reserve fund or statutory surplus fund, the Group’s PRC subsidiaries, consolidated VIEs and VIEs’ subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company.

Amounts restricted include paid-in capital and statutory reserve funds, less accumulate deficit if as determined pursuant to PRC GAAP, totaling approximately RMB7,644,467 and RMB11,417,468 as of December 31, 2020 and 2021, respectively; therefore in accordance with Rules 4-08 (e) (3) of Regulation S-X, the condensed parent company only financial statements as of December 31, 2020 and 2021 and for the years ended December 31, 2019, 2020 and 2021 are disclosed in Note 32.

Trade and Notes Payable -Aging Analysis Of Trade and Notes Payable (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Trade and Notes Payable
Total	¥ 9,376,050	$ 1,471,307	¥ 3,160,515
Within 3 months
Trade and Notes Payable
Total	7,539,833		3,118,840
Between 3 months and 6 months
Trade and Notes Payable
Total	1,639,286		18,537
Between 6 months and 1 year
Trade and Notes Payable
Total	161,913		10,676
More than 1 year
Trade and Notes Payable
Total	¥ 35,018		¥ 12,462

Taxation - Components of deferred tax assets (liabilities) (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets
Net operating loss carryforwards	¥ 1,119,659	¥ 1,144,397	¥ 717,495
Accrued expenses and others	228,734	66,773	12,545
Impairment of long-lived assets and allowance for credit losses	13,224	7,694	73,271
Acquisition of Changzhou Manufacturing Base Phase I and Phase II (Note 11)	11,969
Depreciation and amortization	190	16,220	26,946
Unrealized financing cost		13,125	27,520
Unrealized investment loss			29,664
Total deferred tax assets	1,373,776	1,248,209	887,441
Less: Valuation allowance	(1,297,395)	(1,004,665)	¥ (887,441)	¥ (419,496)
Deferred tax assets, net of valuation allowance	76,381	243,544
Deferred tax liabilities
Accelerated tax depreciation and others	(195,121)	(215,030)
Fair value change of certain investments	(15,087)	(5,667)
Total deferred tax liabilities	(210,208)	(220,697)
Deferred tax assets, net		¥ 22,847
Deferred tax liabilities, net	¥ (133,827)

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

(a)Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

Significant accounting policies followed by the Group in the preparation of its accompanying consolidated financial statements are summarized below.

(b)Principles of consolidation

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

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

(c)Use of estimates

2. Summary of Significant Accounting Policies (Continued)

(d)Functional currency and foreign currency translation

(e)Convenience translation

(f)Cash, cash equivalents and restricted cash

2. Summary of Significant Accounting Policies (Continued)

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


	As of December 31,
	2020	2021
Cash and cash equivalents	8,938,341	27,854,224
Restricted cash	1,234,178	2,638,840
Total cash, cash equivalents and restricted cash	10,172,519	30,493,064

(g)Time deposits and short-term investments

Time deposits are those balances placed with the banks with original maturities longer than three months but less than one year.

(h)Trade receivables and current expected credit losses

2. Summary of Significant Accounting Policies (Continued)


		For the year ended
		December 31, 2021
Balance as of December 31, 2020		—
Impact of adoption of ASC 326		1,955
Balance as of January 1, 2021		1,955
Provisions		6,415
Write-offs		(1,954)
Balance as of December 31, 2021		6,416

(i)Derivative instruments

2. Summary of Significant Accounting Policies (Continued)

(j)Inventories

(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 facilities		5 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

2. Summary of Significant Accounting Policies (Continued)

(m)Intangible assets, net


		Useful Lives
Software and Patents		5 to 10 years

(n)Impairment of long-lived assets and intangible assets with indefinite lives

2. Summary of Significant Accounting Policies (Continued)

(o)Long-term investments

Long-term investments are comprised of investments in publicly traded companies and privately-held companies.

2. Summary of Significant Accounting Policies (Continued)

(p)Employee benefits

(q)Product warranties

The accrued warranty activity consists of the following:


	For the Year Ended December 31,
	2019	2020	2021
Accrued warranty at beginning of the year	—	6,996	233,366
Warranty cost incurred	(163)	(8,258)	(22,558)
Provision for warranty	7,159	234,628	631,537
Accrued warranty at end of the year	6,996	233,366	842,345
Including: Accrued warranty, current	1,477	55,138	154,276
Accrued warranty, non-current	5,519	178,228	688,069

(r)Revenue recognition

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)

●

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.

Vehicle sales

2. Summary of Significant Accounting Policies (Continued)

Sales of Li Plus Membership

Customer loyalty points

2.Summary of Significant Accounting Policies (Continued)

Sales of Automotive Regulatory Credits

Practical expedients and exemptions

(s)Cost of sales

(t)Research and development expenses

(u)Sales and marketing expenses

(v)General and administrative expenses

2. Summary of Significant Accounting Policies (Continued)

(w)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.

(x)Share-based compensation

The Company grants share options to eligible employees, directors and consultants and accounts for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation.

2. Summary of Significant Accounting Policies (Continued)

(y)Taxation

(z)Discontinued operations

2. Summary of Significant Accounting Policies (Continued)

(aa)Leases

An option for the seller-lessee to repurchase the asset would preclude accounting for the transfer of the asset as a sale of the asset unless both of the following criteria are met:

The exercise price of the option is the fair value of the asset at the time the option is exercised.

There are alternative assets, substantially the same as the transferred asset, readily available in the marketplace.

2. Summary of Significant Accounting Policies (Continued)

(aa)Loss per share

(ab)Comprehensive loss

(ac)Segment reporting

Revenue Disaggregation - Revenue By Timing of Recognition (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Revenue Disaggregation
Revenues	¥ 27,009,779	$ 4,238,424	¥ 9,456,609	¥ 284,367
Vehicle sales
Revenue Disaggregation
Revenues	26,128,469	4,100,127	9,282,703	280,967
Other sales and services
Revenue Disaggregation
Revenues	881,310	$ 138,297	173,906	3,400
Revenue recognized at a point in time
Revenue Disaggregation
Revenues	26,917,836		9,436,095	284,195
Revenue recognized at a point in time \| Vehicle sales
Revenue Disaggregation
Revenues	26,128,469		9,282,703	280,967
Revenue recognized at a point in time \| Other sales and services
Revenue Disaggregation
Revenues	789,367		153,392	3,228
Revenue recognized over time
Revenue Disaggregation
Revenues	¥ 91,943		¥ 20,514	¥ 172

- Definition

+ References

+ Details

Summary of Significant Accounting Policies - Product warranties (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Summary of Significant Accounting Policies
Accrued warranty at beginning of the year	¥ 233,366	¥ 6,996
Warranty cost incurred	(22,558)	(8,258)	¥ (163)
Provision for warranty	631,537	234,628	7,159
Accrued warranty at end of the year	¥ 842,345	¥ 233,366	¥ 6,996