Competition intensifies as Li Auto allegedly revises its sales strategy
Li Auto, a prominent Chinese electric vehicle (EV) manufacturer, has made several significant changes to its sales strategy and introduced a new battery electric vehicle (BEV) model.
The company launched its second BEV model, the Li i8, on July 29. However, due to market demands and the need to alleviate short-term sales pressure, the model was re-launched on August 5 with reduced versions and a lower price. The Li i8 is set to begin deliveries on August 20, with a target of delivering 8,000 to 10,000 units by the end of September.
In July, Li Auto delivered 2,816 units of the Li Mega Multi-Purpose Vehicle (MPV), accounting for 9.16 percent of the company's monthly deliveries. The Li Mega has been a steady performer for Li Auto, contributing to the company's sales.
The changes in Li Auto's sales strategy began in April 2023 when the company adopted a provincial-level direct sales system. This system proved successful, as Li Auto achieved its highest sales among China's EV startups in 2023 while using this system. However, the company has now reverted to a province-based sales structure.
The previous sales network was divided into 26 regions based on China's major provinces. This was later reduced to five regions as part of a withdrawn sales system that was in place for less than six months. The change was due to intensifying market competition and the need to address short-term sales pressure.
The restructured sales and service system continues to be led by Li Auto's president, Ma Donghui. Following the latest adjustments, Han our X, the former head of the Central region, has been reassigned as head of retail. The search results do not provide information about who has taken over the leadership of the sales department in the new organizational structure of Li Auto.
In the first seven months of the year, Li Auto delivered 234,669 vehicles, marking a year-on-year decrease of 2.21 percent. The breakdown of Li Auto's July deliveries shows that electric range extended vehicles (EREVs) declined while the Mega continued to rise. Li Auto's main L-series EREVs saw delivery volumes drop by 40 percent to 53 percent year-on-year in July.
In 2024, Li Auto's annual sales exceeded 500,000 units for the first time. Despite the recent challenges, Li Auto remains a significant player in the EV market in China. The company's continued focus on innovation and adaptation to market conditions bodes well for its future.
