At its autumn strategy meeting, Li Auto first admitted “efficiency has slowed” and decided to overhaul its strategy.
In October, Li Auto sales fell 38.3% year-on-year to just 31,767 units, marking five consecutive months of negative growth.
According to Chinese media reports, at the recently concluded autumn strategy meeting, Li Auto internally acknowledged for the first time that its “efficiency has slowed” and reflected on core issues such as declining sales, R&D pace, and product strategy.
Back in August, during the Q2 earnings call, Li Xiang candidly stated: “While we play one card, our competitors play two. Our iteration speed is equivalent to rivals seeing our cards and playing against us.”
Li Auto’s pace of major platform updates every four years can no longer keep up with current competition intensity. Its extended-range L Series, once selling over 50,000 units monthly, has now dropped to around 20,000 while facing attacks from multiple sides. In contrast, its “top rival” Huawei’s HIMA alone has 25 models planned for next year.
Product Strategy Adjustments
Facing lagging product timelines, Li Auto has decided to shorten its major platform iteration cycle from four years to two. To support this shift, the company has mobilized supply chain partners for synchronized acceleration.
Li Auto will also abandon its once-prized “Matryoshka doll” design strategy. Post-meeting, the company resolved to create greater differentiation between future models, distinguishing them by design identity rather than just configurations.
An industry insider pinpointed the core issue: “L9 buyers find the L6/7/8 models confusingly similar, lacking the premium feel and clear differentiation of AITO M9.”
Li Auto’s product philosophy is also evolving. According to an insider, “Li Xiang used to resist piling on configurations, but now they’ll compete where competition is due. No more half-hearted products—if it can’t amaze users, don’t make it.”
R&D System Reflection
Following the strategy meeting, the R&D system convened a separate meeting in Changzhou to reflect on its own issues.
Li Auto internally recognized that its past overemphasis on R&D cost-effectiveness led to resource compression when revenue declined.
For instance, after the MEGA setback last year, Li Auto’s large-scale layoffs were seen by many internally as “inexplicable and demoralizing.” This over-pursuit of cost-effectiveness created a vicious cycle of reduced investment and slower speed.
In a recent organizational reshuffle, Li Xiang has personally taken over HR to direct company structure and staffing adjustments. Li Auto’s R&D technology department is also planning to establish an independent system—similar to Xiaomi Auto’s architecture department—to drive more product innovation.
Accelerating Overseas Expansion Across the Board
“The biggest mistake was going all-in on overseas expansion too late,” was another key reflection from the strategy meeting.
At the strategy meeting two years ago, Li Auto judged that overseas expansion wouldn’t be a strategic priority and might only be seriously considered after 2028.
Li Auto previously relied on parallel exports to markets like Russia, the Middle East, and Central Asia, with peak monthly exports reaching 4,000 units. An L9 costing 450,000 RMB in China could sell for 900,000 RMB in Russia, doubling the price.
This year, Russia and Central Asian countries have introduced many restrictive policies, slashing Li Auto’s parallel exports to just a few hundred units per month. Additionally, starting January 1, 2026, four government ministries including the Commerce Ministry will strictly curb new car exports disguised as used vehicles, completely cutting off Li Auto’s parallel export route.
Faced with this strategic miscalculation, Li Auto decided to accelerate its official overseas deployment.
In October 2025, Li Auto opened its first overseas authorized retail center in Tashkent, Uzbekistan, officially entering the Central Asian market—surprising the industry, as most Chinese brands choose Europe as their first destination.
Li Auto is taking a differentiated “emerging markets first, mainstream markets later” approach. It has already established R&D centers in Germany and the US, and retail centers in Uzbekistan and Kazakhstan.
According to plans, all new models launching in 2026 will be adapted to comply with overseas market regulations.
Major AI Push-Forward
On the final day of the strategy meeting, Li Auto dedicated the entire day to discussing AI investment, reaffirming its commitment to ramp up spending, particularly on inference computing capacity.
The company currently boasts 10 EFLOPS of training compute and 3 EFLOPS of inference compute, with plans for further expansion of inference capacity. Sources indicate Li Auto’s monthly computing power investment has surpassed 100 million RMB, while it continues to refine its self-developed automotive chips.
On the self-developed chip front, Li Auto’s first-generation chip successfully completed tape-out and returned from fabrication earlier this year. It is currently undergoing in-vehicle testing and is slated for deployment in flagship models next year.
The second-generation chip, which emphasizes inference capabilities and is slated for release in two years, charts a differentiated path from XPeng’s Turing chip and NIO’s Shenji chip.
Furthermore, Li Auto plans to invest heavily in robotics and AI-powered terminal applications.
Discover more from ChinaEVHome
Subscribe to get the latest posts sent to your email.
