Li Auto's management was expecting 70,000 to 80,000 units of the Li Mega for the full year prior to its launch, and is now discussing whether to lower that to 50,000 to 60,000 units, according to local media.
(Image credit: Li Auto)
Li Auto's (NASDAQ: LI) first battery electric vehicle (BEV) model, the Li Mega, has not been selling as well as expected in its initial launch, and the company's management is considering lowering its sales target for the MPV (Multi-Purpose Vehicle) model, according to a local media report.
Li Auto's management's initial 24-hour order expectation for the Li Mega, which was officially launched on March 1, was around 3,000 units, but turned out to fall short of expectations, achieving only half of the target, LatePost said in a report today.
The Li Mega received orders for nearly 4,000 units within half a month of its launch, and the Li Auto factory has a capacity of 5,000 units of the Li Mega this month, according to the report.
Prior to the launch, Li Auto's management was expecting full-year sales of 70,000 to 80,000 units of the Li Mega, a significant chunk of incremental growth in the company's annual sales target of 800,000 units for the year, the report noted.
To reach the target, Li Mega would need to average 7,000 to 8,000 monthly deliveries this year, but current sales are far from the target, LatePost said.
Li Auto's management is discussing whether it needs to lower its Li Mega sales target to 50,000 to 60,000 units, but a final number has yet to be determined, according to the report.
Li Auto officially launched the Li Mega on March 1, offering only one trim with a starting price of RMB 559,800 ($77,800), making it the highest-priced model Li Auto currently has on sale. Deliveries of the model began on March 11.
The Li Mega was launched in the Max trim, and on March 12, Li Auto adjusted the model's naming, changing the name from Li Mega Max to Li Mega Ultra.
The model looks like a locomotive for China's high-speed railroad, a unique design that aims to reduce wind resistance for better range, but it has also met with a lot of negative comments.
At the same time, the Li Mega's high price tag didn't go over well, as Xpeng's (NYSE: XPEV) X9 MPV, which was launched on January 1, starts at just RMB 359,800, and Denza's 2024 D9, which was launched on March 6, starts at RMB 339,800.
To ensure the success of the Li Mega, Li Auto prepared 1,000 vehicles for test drives of its first BEV model, according to LatePost.
Li Auto was busy after the Chinese New Year holiday with media test drives, preparation for the launch, production, and sales training for the Li Mega, with many working for two weeks straight, according to the report.
They thought they could relax after the official launch of the Li Mega, but to their surprise, it's been taking a new hit almost every day since the release, the report said, citing a Li Auto source.
Li Auto wants the Li Mega to be a symbol for the company, much like Cybertruck is a symbol for Tesla, according to the report.
The company's management has also repeatedly said it is confident that the Li Mega will be the best-selling model in China priced at more than RMB 500,000 yuan.
In the eyes of some industry insiders, Li Auto's goal for the Li Mega deviates from the true market potential for purely electric MPVs, according to LatePost.
MPVs have always been a niche model in China, contributing around 5 percent of passenger car sales each month.
In February, retail sales of MPVs in China amounted to 52,811 units, contributing 4.79 percent of the total passenger car sales of 1,103,494, according to the China Passenger Car Association (CPCA).
For comparison, sedans sold 499,699 units and SUVs sold 550,984 units in February, contributing 45.28 percent and 49.93 percent respectively.
($1 = RMB 7.1960)
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