Detailed narrative
Sales Network Optimization & Store Partner Program
Li Auto is strategically optimizing its direct sales network, clarifying that rumors of 100 store closures are false, and instead focusing on quality over quantity. New stores will prioritize top-tier shopping malls and premium auto parks to enhance brand presence and attract high-quality traffic, particularly in higher-tier cities to support BEV sales ramp-up.
The company launched a new store partner program on March 1, empowering store managers with autonomy in customer acquisition, operations, and team management, alongside profit sharing, aiming for significant sales and operational improvements from Q3.
New Product Strategy & AI Integration
The company is launching the all-new L9 lineup in Q2, featuring comprehensive upgrades including an 800-volt architecture, 5C ultra-fast charging, and the next-generation full-stack in-house developed range extender 3.0 system. The top-of-the-line Li L9 Livis, priced at RMB 559,800, will feature the world's first mass-produced fully drive-by-wire chassis and an 800-volt fully active suspension system, powered by two in-house developed 5-nanometer M100 chips, positioning it as an 'embodied AI robot' and a 'real smart car'.
BEV Portfolio Ramp-up and Battery Strategy
Li Auto is successfully resolving supply constraints for the Li i6, which is now in a stable delivery phase and expected to sustain monthly sales of around 20,000 units. The Li i8 has seen user satisfaction rise, with NPS up over 20%, leading to a significant rebound in orders (180% vs.
January). The company plans to launch the Li i9, a new flagship BEV SUV, in H2 2026. Li Auto's battery strategy involves open partnerships, with all 2026 vehicles equipped with batteries from either Li Auto or CATL brands, ensuring unified quality and safety standards.
Embodied AI Transformation and R&D Investment
2026 is highlighted as a pivotal year for Li Auto's transformation into an embodied AI company, moving beyond a smart EV company. In 2025, R&D spending totaled RMB 11.3 billion, with approximately 50% allocated to AI-related initiatives, a strategy that will continue in 2026 with R&D expenses expected to remain around RMB 12 billion.
This investment focuses on creating AI (chips, foundation models, software/hardware) and applying AI for organizational efficiency, aiming for proactive, high-frequency user experiences.
R&D Restructuring and Talent Development
A major organizational change in January revamped hardware and software functions with the shared goal of building a 'silicon-based digital human being.' This restructuring, which reconnected functions across the 'brain' (datasets, chips, OS) and 'applications' (core software, agents, skills, memories) and 'hardware' teams, has led to significant efficiency gains.
For example, autonomous driving model iterations now occur daily, a 14x improvement. The company also noted the emergence of talented young leaders, many born after 1990, who are making major contributions to technology and products.
Cost Management & Pricing Strategy
To address raw material cost inflation, particularly in batteries and memory chips, Li Auto is implementing a three-pronged strategy. This includes strengthening supply chain collaboration through long-term agreements to stabilize pricing and secure supply, driving end-to-end cost optimizations across the value chain through platform-based development and proprietary technologies, and adopting a rational and steady approach to new vehicle pricing for 2026 models to ensure healthy and sustainable profitability, aiming to bring gross margins back to a healthy range.