Li Auto will release the Li L6 EREV, Li Mega BEV in the first half of the year and will launch three more BEVs in the second half of the year, according to local media.
(A Li L9 on display at the August 2023 Chengdu auto show. Image credit: CnEVPost)
Li Auto (NASDAQ: LI) will discontinue the older versions of its three models, the Li L7, Li L8, and Li L9, in the second quarter, after it launches the facelifted models in March, local media outlet 36kr said in a report today, citing supply chain sources.
Li Auto said yesterday it will update the L-series models with new configurations, and that the 2024 models will be launched and deliveries will begin in March.
With the Chinese New Year approaching, Li Auto has launched purchase offers for the 2023 models, the company said yesterday, without providing details.
Li Auto's three models currently on sale are all extended-range electric vehicles (EREVs), which are essentially plug-in hybrids.
After the current trio of models is revamped, Li Auto will release the Li L6 EREV, Li Mega battery electric vehicle (BEV) in the first half of 2024 and will launch three more BEVs in the second half of the year, according to 36kr.
Li Auto started offering purchase incentives as early as the fourth quarter of 2023, initially offering subsidies of more than RMB 10,000 ($1,400) to prepare for the model switch, according to the report.
As the company itself unveils its plans to revamp existing models, it is offering discounts of up to RMB 33,000 on its 2023 models, 36kr cited Li Auto salespeople as saying.
The Li L7, for example, which has a starting price of RMB 319,800, starts at RMB 286,800 after the discounts, the report noted.
In addition to preparing for the model switch, Li Auto is offering these discounts because it is running out of order reserves, according to the report.
Li Auto sold more than 10,000 units every week in December, but plummeted to 4,300 units in the first week of 2024, according to data shared by the company on Weibo.
After the specs are updated, the 2024 Li Auto models will remain competitive, with some auto bloggers saying the revamped models are expected to feature a Qualcomm Snapdragon 8295 cockpit chip and an expected increase in battery range, the report noted.
With the model switch, Li Auto will face a dilemma in terms of pricing, the report said, adding that the company's average price for vehicle sales has been slipping.
Li Auto's average vehicle price was about RMB 430,000 in the fourth quarter of 2022, but is expected to decrease to RMB 347,000 in the fourth quarter of 2023 based on its revenue guidance, the report noted.
Considering the price cuts amid the model switch, it will be more difficult for Li Auto to maintain average vehicle price at RMB350,000, the report said.
Li Auto's management has a clear perception that market share is more important than gross margin, 36kr cited an insider as saying.
This means that Li Auto is likely to mull over bigger price changes in an attempt to get more market share from the German luxury brands, the report said.
Amid widespread price wars in the auto industry in 2023, BMW, Mercedes-Benz, and Audi's sales in China remained strong, with 824,900, 613,000, and 665,000 units delivered for the year, respectively.
That's the result of price concessions by these three German luxury brands, and Li Auto will need to show more sincerity if it wants to shake them up, the report said.
Meanwhile, Huawei-backed Aito, Nio's Alps sub-brand, Xpeng's new G9, and the new model G7, are all aiming for bigger markets, the report said.
($1 = RMB 7.1633)
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