After a year of disappointing sales and new models that failed to win over customers, Chinese automaker Li Auto has reconvened to adjust its model strategy, product roadmap, and R&D priorities — including AI development.
According to an exclusive report by local media outlet 36Kr, the company founded and led by Li Xiang has held a three-day closed-door strategy meeting in mid-October.
The brand plans to accelerate its product cycle, acknowledging that it has slowed down while competitors are rolling out facelifts and updates more quickly.
Additionally, the company’s overseas expansion has wavered, with Li Auto acknowledging that competitors like Nio and XPeng have already moved quickly into these markets over the past two years.
Weak Demand
In October, the company sold 31,767 vehicles — down both sequentially and year over year.
Over the past five months, and despite the introduction of its second fully electric model in July, monthly deliveries have been lower than the same period last year, when the company was selling over 40,000 units per month.
From June to October this year, monthly registrations ranged between 28,000 and 36,000 units.
The two recent fully electric models — the six-seat Li i8 SUV and the five-seat Li i6 — had weaker-than-expected receptions, in part driven by the rise in competition from other EV makers.
Competition Rise
The Li i8 was launched around the same time as Onvo’s L90, another six-seat SUV.
Unlike Li Auto‘s model, the L90 has exceeded expectations and is one of Nio’s key focuses in the fourth quarter, alongside the Nio ES8 — also a six-seat model, but on the premium segment.
The release of the six-seat Tesla Model Y L has not helped the case.
The Li i6, launched in late September, has not been able to compete with other SUVs in the segment, namely the Xiaomi YU7, which outperformed its competitors in October for the first time since its July launch.
According to industry sources cited by 36Kr, Li Auto did not expect the YU7 SUV to intensify the competitive landscape as dramatically as it did, as many in the industry once believed Xiaomi entered the car market too late.
However, earlier this year, Li Xiang said that, besides him, only Xiaomi‘s co-founder and CEO Lei Jun is capable of creating a “super product” among China’s new wave of automakers.
Even considering its range-extended L series — in which Li Auto focused on up until the launch of the fully electric Mega multi-purpose van (MPV) — monthly sales have fallen from 50,000 units to around 20,000.
XPeng launched the fully electric X9 MPV a few months prior to Li Auto‘s Mega, early last year. The model became a best-seller in its segment.
This year, the Guangzhou-based company unveiled an extended-range version of the seven-seater. The hybrid X9 has its official launch event this Thursday (November 20).
Two-year Platform Cycle
According to the 36kr report, Li Auto believes its previous four-year cycle for major platform upgrades is too slow, given the current competitive landscape.
In response, the company will adopt a two-year platform cycle and has already mobilized suppliers to support this faster pace.
The brand is also shifting its product-building philosophy.
A source told 36Kr that “Li Auto used to resist feature-stuffing,” but now the stance is that “if the market is in a feature war, we compete.”
“No more ‘good enough’ products — if it can’t wow users, don’t make it,” they added.
This shift is reflected in post-launch configuration updates to the i8 and the i6’s move to a single-trim strategy.
Just a week after the model’s launch, Li Auto abruptly revised the pricing and configuration of its i8 SUV, discontinuing the Pro and Ultra variants — which hinted that the model was facing weak demand.
Design and R&D Strategies
Li Auto is returning to its “single-model blockbuster” approach — focusing on one configuration and refining it to the highest standard — along with a design strategy that varies by platform.
While consistent design helps improve hardware reuse, it has created a recognition problem, with the sources adding that “customers buying an L9 feel the L6/7/8 all look the same.”
Li Auto aims to move away from strict cost-cutting in R&D to prevent further slowdowns — after last year’s major layoffs were found puzzling and demoralizing by industry insiders.
In a recent restructuring, Li Xiang personally oversaw HR to manage organizational and personnel changes.
The R&D department is also planning to create an independent unit — similar to Xiaomi’s new Architecture Department — to play a more direct role in product innovation.
Overseas Expansion
Two years ago, Li Auto judged that overseas markets would not be a strategic priority for a long time, perhaps until after 2028.
But at this year’s strategy meeting, and according to the local outlet, the company acknowledged that their biggest mistake was “going all-in on overseas too late.”
Li Auto had built a 30-person overseas strategy team in 2021, but it was reassigned to domestic operations in early 2022.
For the next two years, the company wavered on when and how to expand abroad, with Li Xiang himself stating in 2023 that the brand “would not enter overseas markets before 2025.”
In February 2024, Li Auto said it would adopt a direct-sales model overseas — only to shift again in May toward a hybrid dealer approach.
This year, the brand clarified that it will prioritize the Middle East, Central Asia, and Europe, opening R&D centers in Germany and the US and retail centers in Uzbekistan and Kazakhstan.
It also plans to design new models for 2026 launch to meet overseas regulatory standards.
Previously, Li Auto relied heavily on parallel export channels to Russia, the Middle East, and Central Asia, selling as many as 4,000 monthly units.
However, new restrictions in Russia and Central Asian markets have disrupted the model.
