Chinese electric car startup Li Auto turned a profit in the fourth quarter of 2020, marking its first time in the black since it started deliveries of its first and only model Li ONE at the end of 2019.
In the three months through December, Li Auto posted net income of 107.5 million yuan ($16.5 million), compared with a 106.9 million yuan loss in the third quarter of the year, according to the company’s latest earnings report released on Thursday.
In an earnings call after the report’s release, Li Auto CFO Li Tie largely attributed the swing to profitability to the company’s investment in short-term wealth management products.
The company’s total revenue grew 65.2% quarter-on-quarter to 4.15 billion yuan, about 97.8% of which came from car sales.
Beijing-based Li Auto said that it delivered 14,464 Li ONEs in the fourth quarter, compared with 8,660 cars in the third quarter, bringing its total car sales for 2020 to 32,624 units. The Li ONE is a plug-in hybrid.
Earlier this month, the Shanghai municipal government issued new rules that will stop buyers of plug-in hybrids from getting free special license plates from January 2023. However, Li Auto said the policy will not have a great impact on the company as Shanghai only accounted for 9% of its sales in 2020.
In Thursday’s earnings call, Li Auto CEO Li Xiang revealed that the company is modifying its Changzhou plant to produce a new SUV model, which is set to hit the market in 2022. The company also plans to start delivery of its first pure electric car in 2023, Li said.
Li Auto said it expects current-quarter revenue to be between 2.94 billion yuan and 3.22 billion yuan, representing a year-on-year increase of between 245.9% and 278.8%. The company’s Nasdaq-listed shares closed down 9.8% at $25.87 after the results came out.