The Li L7 is a model that was nearly canceled during development, according to CEO Li Xiang.

(Image credit: CnEVPost)

The Li L7 -- a new model that almost got canceled -- saw its highest single-day sales ever on Saturday, according to Li Xiang, founder, chairman and CEO of Li Auto (NASDAQ: LI).

"Yesterday was our first tech day, and today is also a historic moment -- the first time that the Li L7 has sold more than 1,000 units on a single day with no new model launch," Li wrote on Weibo late at night on June 18.

Li Auto held its first Family Tech Day event on June 17, announcing the official name of its first BEV, Li MEGA, and the company's progress in developing assisted driving and supercharging capabilities.

"For a model with a starting price of RMB 300,000 ($42,100) or more and in a steady state of sales, selling more than 1,000 in a single day should be a moment to remember," Li said.

Li Auto launched the Li L7, its first five-seat SUV, on February 8 and currently offers three versions with starting prices of RMB 319,800, RMB 339,800 and RMB 379,800, respectively.

All of the company's current models are extended-range electric vehicles (EREVs), with the other two being the higher-priced, six-seat Li L8 and Li L9.

The Li L7 was almost canceled during development, according to Li, who said he was quite determined to axe the model last September, but several other executives stopped him.

Li mentioned in another Weibo yesterday that most members of Li Auto's management team thought the company should set an annual sales target of 360,000 units at the beginning of the year, but he ultimately decided to set a budget target based on annual sales of 306,000 units.

"This was partly because I didn't think we could be too optimistic about the economic environment this year, and partly because we didn't meet our budget targets for all three years from 2020-2022," he said.

Li said the too-low targets he set caused the company to place orders at suppliers at the beginning of the year that were clearly not keeping up with current sales, so several key components would take more than a quarter to reach the right capacity if production ramp-up began now.

Currently, Li Auto's plant in Changzhou, Jiangsu province has two production lines, one for double-shift production and one for single-shift production, according to Li.

The current peak capacity of the plant is 7,500 units/week, of which six days are production time and one day is used for maintenance, Li said.

Li Auto's goals set at the beginning of the year were too conservative, and suppliers of key components are currently adding equipment in line with the company's demand of more than 10,000 units/week, according to Li.

Li said Li Auto won't be able to achieve 10,000 units/week capacity until the fourth quarter when both of its lines will be based on double-shift production.

Li Auto delivered a record 28,277 vehicles in May, up 145.97 percent year-on-year and 10.11 percent from April, the third consecutive month to exceed the 20,000-unit mark, according to data released June 1.

The Li L7 achieved its second consecutive month of over 10,000 deliveries in May, Li Auto said at the time, without disclosing specific figures.

Li Auto aims for the Li L7, Li L8 and Li L9 models to see combined monthly sales of more than 40,000 units this year, Li said on June 1.

($1 = RMB 7.1266)

Li Auto Family Tech Day: 1st BEV named Li MEGA, aims to be top seller above $70,000 in China