Li Auto incorrectly treated a period of commercial validation as a period of rapid growth with the Li Mega, and this strategic miscalculation was the essential reason for the model's issues, its CEO said.
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Li Auto CEO said the company will fight back against organized crimes, as Li Mega's design has been hit with an avalanche of negative comments over the past few days.
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Li Auto CEO calls on China's policy makers to establish a mechanism to facilitate mergers and acquisitions between auto companies, amid widespread discussions over HiPhi's production halt.
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Li Auto delivered a record 50,353 vehicles in December and 376,030 for the full year 2023.
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A prominent product manager in China's smartphone industry has joined Li Auto, sparking speculation that the carmaker may follow Nio and make phones.
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Li Auto's factory in Changzhou will be upgraded and revamped during the Chinese National Day holiday to support production expansion.
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They were last pictured together on June 6, 2020, when Nio, Xpeng, and Li Auto were all struggling to boost sales.
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Li Auto finished the first half of the year with more than 130,000 units sold and does not have any ability to sell 400,000 vehicles for the full year, its CEO said.
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Li Auto (NASDAQ: LI) CEO denied that the company raised its sales target to 400,000 units this year, after the reports sparked widespread discussion.
"A media report today that our target for this year has been adjusted to 400,000 units is false and unfounded," Li Auto founder, chairman and CEO Li Xiang said on Weibo today.
Li Auto finished the first half of the year with more than 130,000 units sold and does not have any ability to make the full year sales of 400,000 units, he said.
The company's capabilities, including product, sales, capacity and organization, cannot support 400,000 units sold this year, and the gap is huge, Li said.
"The automotive industry's capability chain is built one step at a time, with no particular shortcuts," he added.
In a report yesterday, local media outlet 36kr cited sources familiar with the matter as saying that Li Auto recently raised its full-year sales target to 400,000 units from the original 300,000.
In addition to the overall sales target, Li also set targets for sales of specific models, according to the report.
Li set a goal for the Li L7 to achieve 20,000 deliveries of a single model in October, and to keep deliveries of the more expensive Li L9 and Li L8 above 10,000 units, bringing overall deliveries to 40,000 units/month, the report said.
Earlier today, Li Auto said on Weibo that it had sold 27,300 units this month as of June 25 and was on track to reach its 30,000-unit monthly sales goal.
Assuming Li Auto sells 30,000 vehicles in June, the 400,000-unit full-year sales target means it will need to sell an average of about 44,000 units per month in the second half of the year.
On June 18, Li said on Weibo that most members of Li Auto's management team thought the company should set an annual sales target of 360,000 units at the beginning of the year, but he ultimately decided to set a budget target based on annual sales of 306,000 units.
"This was partly because I didn't think we could be too optimistic about the economic environment this year, and partly because we didn't meet our budget targets for all three years from 2020-2022," he said at the time.
Li said the too-low targets he set led the company to place orders at suppliers at the beginning of the year that were clearly not keeping up with current sales, so several key components would take more than a quarter to reach the right capacity if production ramp-up began now.
Separately, Li said in another Weibo today that the Li L7 is on track to deliver more than 13,000 units this month, although it faces an onslaught of new models in June including IM Motors' LS7, Nio's new ES6.
Sales of the Li L8 have risen from more than 7,000 last month to more than 9,000 this month, and the Li L9 has improved from slightly more than 6,000 last month to more than 8,000, he said.
In addition to deliveries that can exceed 30,000, Li Auto has seen record order in-takes, Li said, adding that capacity has become the biggest bottleneck in deliveries, not demand.
All three of Li Auto's SUVs currently on sale are extended-range electric vehicles (EREVs), which are essentially plug-in hybrids.
In retweeting Li Auto's Weibo today about last week's sales figures, Li hinted that the company could launch sedan models next.
The focus is generally on the sedan lineup as dealers of luxury brand fuel cars struggle to meet their first-half sales targets this week, so sedan sales for t first-tier luxury brands are very solid, he said.
"So, the question is, shall we launch sedan offerings?" He asked.
China NEV insurance registrations for week ending Jun 25: Tesla 16,700, Li Auto 7,500, Nio 3,200
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Li Auto aims to reach annual sales of 1.6 million vehicles and annual revenue of RMB 500 billion by 2025, its CEO said.
The CEO of Li Auto (NASDAQ: LI) welcomed the clarification of China's new energy vehicle (NEV) purchase tax exemption policy for the next few years and reiterated the company's ambitious goals.
Li Auto aims to reach annual sales of 1.6 million vehicles and annual revenue of RMB 500 billion ($70 billion) by 2025, Li Xiang, the company's founder, chairman and CEO, wrote on Weibo today.
China has provided stable policies for the next four years, which is great and gives Li Auto's team no excuse not to accomplish its strategic goals for 2025, Li said.
By early 2026, Li Auto's ability to meet that goal will be verified, he said.
Li Auto originally set that aggressive goal in February 2021, saying the company aims to be the No. 1 smart electric vehicle company in China with a 20 percent market share, or 1.6 million units sold annually, by 2025.
For reference, BYD sold 1,804,624 retail units in China for the full year last year, ranking first with an 8.8 percent share, according to the China Passenger Car Association (CPCA).
Li Auto delivered 133,246 vehicles last year, up 47.25 percent year-on-year, but did not make the CPCA's top-selling automaker ranking.
All three models currently sold by Li Auto are extended-range electric vehicles (EREVs), which are essentially plug-in hybrid vehicles (PHEVs) that are still equipped with internal combustion engines.
Recently, there has been some concern that China may be scaling back support for PHEVs in order to accelerate the auto industry's transition to battery electric vehicles (BEVs).
Earlier today, China's Ministry of Finance released details of the policy to extend the purchase tax exemption for NEVs, with equal treatment for BEVs, PHEVs, EREVs, and fuel cell vehicles.
The country exempts NEVs with a purchase date between January 1, 2024 and December 31, 2025 from vehicle purchase tax, the tax exemption will not exceed RMB 30,000 per new energy passenger vehicle.
For NEVs with a purchase date between January 1, 2026 and December 31, 2027, the vehicle purchase tax will be levied at half the normal rate, with the tax reduction not exceeding RMB 15,000 per new energy passenger vehicle.
To achieve its 2025 target, Li Auto announced two months ago its plan to launch new models in the next two years.
On the first day of the Shanghai auto show on April 18, Li Auto unveiled its all-electric solution, based on the 800 V high-voltage platform, capable of giving a BEV a 400 km range on a 10-minute charge.
With the launch of the solution, Li Auto officially enters a phase of parallel development of its EREV and BEV product lines, it said at the time.
By 2025, Li Auto's product array will include one super flagship model, five EREVs, and five BEVs, the company said.
By then, Li Auto's models for the market priced above RMB 200,000 will fully meet the needs of family users, it said.
($1 = RMB 7.1945)
Li Auto Family Tech Day: 1st BEV named Li MEGA, aims to be top seller above $70,000 in China
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The Li L7 is a model that was nearly canceled during development, according to Li Auto CEO Li Xiang.
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The Li L7 -- a new model that almost got canceled -- saw its highest single-day sales ever on Saturday, according to Li Xiang, founder, chairman and CEO of Li Auto (NASDAQ: LI).
"Yesterday was our first tech day, and today is also a historic moment -- the first time that the Li L7 has sold more than 1,000 units on a single day with no new model launch," Li wrote on Weibo late at night on June 18.
Li Auto held its first Family Tech Day event on June 17, announcing the official name of its first BEV, Li MEGA, and the company's progress in developing assisted driving and supercharging capabilities.
"For a model with a starting price of RMB 300,000 ($42,100) or more and in a steady state of sales, selling more than 1,000 in a single day should be a moment to remember," Li said.
Li Auto launched the Li L7, its first five-seat SUV, on February 8 and currently offers three versions with starting prices of RMB 319,800, RMB 339,800 and RMB 379,800, respectively.
All of the company's current models are extended-range electric vehicles (EREVs), with the other two being the higher-priced, six-seat Li L8 and Li L9.
The Li L7 was almost canceled during development, according to Li, who said he was quite determined to axe the model last September, but several other executives stopped him.
Li mentioned in another Weibo yesterday that most members of Li Auto's management team thought the company should set an annual sales target of 360,000 units at the beginning of the year, but he ultimately decided to set a budget target based on annual sales of 306,000 units.
"This was partly because I didn't think we could be too optimistic about the economic environment this year, and partly because we didn't meet our budget targets for all three years from 2020-2022," he said.
Li said the too-low targets he set caused the company to place orders at suppliers at the beginning of the year that were clearly not keeping up with current sales, so several key components would take more than a quarter to reach the right capacity if production ramp-up began now.
Currently, Li Auto's plant in Changzhou, Jiangsu province has two production lines, one for double-shift production and one for single-shift production, according to Li.
The current peak capacity of the plant is 7,500 units/week, of which six days are production time and one day is used for maintenance, Li said.
Li Auto's goals set at the beginning of the year were too conservative, and suppliers of key components are currently adding equipment in line with the company's demand of more than 10,000 units/week, according to Li.
Li said Li Auto won't be able to achieve 10,000 units/week capacity until the fourth quarter when both of its lines will be based on double-shift production.
Li Auto delivered a record 28,277 vehicles in May, up 145.97 percent year-on-year and 10.11 percent from April, the third consecutive month to exceed the 20,000-unit mark, according to data released June 1.
The Li L7 achieved its second consecutive month of over 10,000 deliveries in May, Li Auto said at the time, without disclosing specific figures.
Li Auto aims for the Li L7, Li L8 and Li L9 models to see combined monthly sales of more than 40,000 units this year, Li said on June 1.
($1 = RMB 7.1266)
Li Auto Family Tech Day: 1st BEV named Li MEGA, aims to be top seller above $70,000 in China
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