Li Auto, a Chinese electric vehicle manufacturer, has set ambitious goals to become the top luxury car brand in terms of sales volume by 2024. The company’s CEO, Li, announced during a meeting with investors that they aim to sell 40,000 vehicles per month in the fourth quarter of this year.
In the first half of this year, monthly sales of BMW, Mercedes-Benz, and Audi in China ranged from 31,500 to 70,000 units, according to data from the China Association of Automobile Manufacturers (CAAM).
Li Auto was founded in 2015 and plans to launch its first pure electric model by the end of this year. The company’s vision for the Li L8 model is to provide maximum comfort, safety, and user versatility.
Li Auto also expects its new model, MEGA, to become the best-selling car in China’s price category above 500,000 yuan (approximately 1.5 million Czech koruna). Li further stated that the company plans to introduce four new models, including three fully electric vehicles, in the next five years.
The Chinese automotive market has been experiencing a price war this year, initiated by American electric vehicle manufacturer Tesla. This price war has affected the sales and profitability of some Chinese automotive start-ups, such as Nio and Xpeng.
Li Auto aims to increase its market share and profitability in the price category above 300,000 yuan (approximately 920,000 Czech koruna) with its four hybrid models targeting families, which offer extended range capabilities.
In the period from January to July, Li Auto delivered 173,251 vehicles to customers, representing a year-on-year growth of 145%. The company aims to deliver over 100,000 vehicles to customers in the third quarter.
Additionally, Li Auto has ambitions to become a global leader in smart technology applications with its Li L9 model.
In other news, car sales in China declined for the second consecutive month in July. The uncertain economic situation and housing market issues have deterred buyers from purchasing expensive consumer goods, despite discounts and government support measures. China is the world’s largest automotive market.
In June, car sales in China decreased by 2.9%. However, for the first seven months of this year, car sales increased by 1.7% compared to the same period last year, reaching 11.44 million units.
Foreign automakers have been focusing on overseas markets as domestic growth slows down. In July, car exports increased by 63%, following a 56% increase in June.
Competition in the Chinese automotive market is intensifying as automakers face weakening demand and increasing price competition. Over 40 brands have joined the price reduction trend initiated by Tesla at the beginning of this year. In July, General Motors and Volkswagen also reduced the prices of their latest electric vehicles.
The growth of New Energy Vehicles (NEVs), which have been driving the Chinese automotive market, is also slowing down. Although NEV sales increased by 31.9% in July and accounted for 35.8% of total car sales, the segment experienced a 3.6% decline compared to June.
China surpassed Germany as the world’s second-largest car exporter in 2022 and dethroned Japan as the largest car exporter in the first quarter of this year. China exported 1.07 million vehicles, a 58% year-on-year increase, while Japan exported 954,185 vehicles, a 6% increase compared to the same period last year.
How has the increasing demand for electric vehicles in China contributed to the significant growth of Li Auto compared to the same period last year?
Significant increase compared to the same period last year. This growth can be attributed to the increasing demand for electric vehicles in China.
Li Auto’s strategy to focus on the luxury car market is a bold move, considering the competition from established luxury brands such as BMW, Mercedes-Benz, and Audi. However, Li Auto believes that their unique selling points, such as maximum comfort, safety, and user versatility, will differentiate them from their competitors.
The upcoming launch of their first pure electric model, the Li L8, is crucial for their ambitious goals. The company aims to provide a high-quality electric vehicle that meets the needs and preferences of luxury car buyers. They are confident that the Li L8 will make a strong impact in the market.
Another key product for Li Auto is the MEGA, which they expect to become the best-selling car in its price category. This shows their commitment to offering a diverse range of vehicles to cater to different customer segments.
To achieve their goals, Li Auto plans to introduce four new models, including three fully electric vehicles, in the next five years. This demonstrates their dedication to innovation and staying ahead of the competition.
The Chinese automotive market has been highly competitive, with American electric vehicle manufacturer Tesla initiating a price war this year. This has affected the sales and profitability of some Chinese automotive start-ups, but Li Auto is determined to increase its market share and profitability.
By targeting the price category above 300,000 yuan with their hybrid models, Li Auto aims to tap into the growing demand for environmentally friendly vehicles among families. These hybrid models offer extended range capabilities, providing a convenient and practical solution for daily commuting and long-distance travel.
With their ambitious goals, focus on luxury and innovation, and expanding product lineup, Li Auto is positioning itself as a leading player in the Chinese electric vehicle market. It will be interesting to see how they fare against the competition and whether they can achieve their targets by 2024.
