The ideal choice between offense and defense: Profit or sales volume?
｜GUIDE｜
■Li Auto's pure - electric strategy is under pressure.
■Should it maintain prices or increase sales volume?
■What's next for Li Auto, offense or defense?
In the just - passed August, the new energy vehicle market witnessed continuous dramas of "reversals and comebacks".
Except for BYD, which still ranked first in the industry with a sales volume of 370,000 units, Leapmotor set a new historical high with a total delivery volume of 57,066 units, a year - on - year increase of 88%, and continued to top the list among new - force automakers.
In this wave, unfortunately, Li Auto became the "background". With a delivery volume of 28,529 units, horizontally compared, it couldn't outperform Hongmeng Zhixing, XPeng, NIO, and Xiaomi. Vertically, its delivery volume declined month - on - month for three consecutive months.
According to the previously released semi - annual report, Li Auto's situation was not entirely "ideal". Against the backdrop of a 7.8% increase in delivery volume, its revenue decreased by 2.0% year - on - year to 56.172 billion yuan, and its net profit was 1.743 billion yuan, a slight year - on - year increase of 2.8%.
Judging from the situation in the first half of the year, Li Auto still outperformed many new - force players in terms of total revenue and total delivery volume. However, when product competition and price competition became increasingly fierce, the challenges Li Auto faced not only implied the meaning of "it's cold at the top" (the larger the base, the slower the growth rate), but also carried the risk of being knocked off the stage by latecomers.
Where exactly do Li Auto's challenges come from? What kind of impact will they have on Li Auto? Does Li Auto still have new stories to tell? This article attempts to answer these questions.
01 The Squeezed Li Auto i8
"The current problem is that every time we make a move, our peers make two moves." Li Xiang's statement at the interim results conference pointed directly at the current troubles Li Auto is facing.
In the just - passed August, Li Auto suffered a lot with the i8.
With the goal of creating a "family mobile space", the Li Auto i8 is defined as a six - seat family SUV. It is equipped with zero - gravity seats, a refrigerated and heated refrigerator, and intelligent technologies, doing its best to meet the needs of family users in terms of driving experience and in - car space.
Meanwhile, it is Li Auto's second pure - electric model (the first pure - electric model is the MEGA) and its first pure - electric SUV.
When it was first launched, the Li Auto i8 offered three versions: the Pro version was priced at 321,800 yuan, the Max version at 349,800 yuan, and the top - end Ultra version at 369,800 yuan.
But just one week later, Li Auto readjusted the prices. The three versions were merged into one, with the Max as the standard version, priced at 339,800 yuan. At the same time, a platinum audio system worth 10,000 yuan was given as a free gift, meaning that users only needed to spend 349,800 yuan for the Ultra version to get all the configurations.
The main reason for the rapid price adjustment of the Li Auto i8 was that its post - launch performance fell short of expectations. And within that week, the NIO LeDao L90 was in close competition with the Li Auto i8.
Overall, the main differences between the Li Auto i8 and the LeDao L90 lie in battery range and intelligent driving technology. The i8 outperforms the LeDao L90 in terms of battery range and chip computing power. It can be said that you get what you pay for.
According to a report from the Passenger Car Association, the Li Auto i8 and the LeDao L90 have a certain degree of similarity in positioning, and the target family car - buying groups also highly overlap. Both models are of great strategic significance to their respective companies, and currently, the topic popularity of the two models is almost on par. In terms of core competitiveness, the LeDao focuses on space, energy consumption, safety, and intelligence, while the selling point of Li Auto lies in its industry - leading charging efficiency.
While the Li Auto i8's pricing strategy took a "wrong turn", the LeDao L90, relying on its low price on one hand and high delivery efficiency on the other, has snatched a lot of attention from the Li Auto i8.
According to Li Auto's plan, it aimed to deliver 8,000 to 10,000 units of the i8 in September, but the LeDao has already achieved this goal.
The pure - electric version of the AITO M8, which was launched in August, dealt a heavy blow to Li Auto. The pure - electric version of the AITO M8 is priced from 359,800 yuan and has a total of six versions. In terms of performance, the pure - electric version of the AITO M8 is equipped with a 100kWh ternary lithium battery from CATL. The long - range version has a CLTC battery range of 705 km, and the four - wheel - drive version has a CLTC battery range of 655 km.
In comparison, the relatively cheaper Li Auto i8, with two battery versions corresponding to ranges of 720 km and 670 km respectively, is not at a disadvantage in terms of performance.
However, in reality, the large - order bookings of the pure - electric version of the AITO M8 exceeded 7,000 units just two hours after its launch, and Yu Chengdong even claimed it as the "king of pure - electric vehicles". Li Auto has never officially announced the large - order data of the i8.
This situation is different from that of Li Auto during the period of the L - series extended - range models and the MEGA. The L - series opened up a market with its extended - range technology. As for the MEGA, even though it was once criticized by netizens for its coffin - like appearance when it was first launched, at least it managed to win the hearts of some users with its product strength. Among family - version models priced above 500,000 yuan, the MEGA still has its specific user group.
The i8 is not without creativity and uniqueness, but the advantages of its battery and charging piles can only be felt after use. The public opinion storm caused by the "truck - collision incident" and the wrong - turn pricing strategy have made many users hesitate before making a purchase.
02 A Critical Moment for Li Auto
Judging from the semi - annual report, Li Auto's basic market is stable. Its revenue of 56.1 billion yuan and a gross profit margin of 20.3% rank among the top among new - force players.
However, it is worth noting that in the first half of 2024, Li Auto's net profit plunged by nearly 50% year - on - year, and the gross profit margin at that time was 20.0%, only 0.3 percentage points lower than the current 20.3%. This was because the sales and R & D expenses increased year - on - year.
In the first half of 2025, Li Auto cut down on some R & D and sales expenses. The former decreased from 6.1 billion yuan to 5.3 billion yuan, a reduction of 12.4%; the latter decreased from 5.8 billion yuan to 5.2 billion yuan, a reduction of 9.4%. As a result, it managed to maintain its gross profit margin and even increase its net profit despite a slight decline in revenue.
Li Auto has maintained today's profits through "cost - cutting" and has achieved 11 consecutive quarters of profitability. However, it must "increase revenue" to win tomorrow's market.
But starting from the second half of the year, Li Auto may enter a stage of "sales decline".
Li Auto's estimated sales volume for the third quarter, as announced in the semi - annual report, is only 90,000 - 95,000 units, a 14% - 19% decline quarter - on - quarter and a 37.8% - 41.1% decrease year - on - year. Considering that 30,700 units were delivered in July and 28,500 units in August, to meet the target, the sales volume in September needs to reach 31,000 - 36,000 units. The pressure is on for the i6, which will be launched in September.
Since Li Xiang has stated at the interim results conference that he will reduce SKUs and focus on hit products, if the i6 fails after the i8 has already made mistakes, it will mean that Li Auto's pure - electric strategy for the whole year will end up "hitting a mine".
Fortunately, Li Auto has a relatively strong financial foundation, with 106.9 billion yuan in cash on its books. Otherwise, it really couldn't withstand the cash outflow rate of "an operating cash flow of - 4.74 billion yuan and an investment cash flow of - 11.19 billion yuan in the first half of 2025".
Li Auto's CFO, Li Tie, explained that the increase in the net cash outflow in the second quarter was mainly because the payment cycle for some suppliers at the end of last year was 3 - 4 months, resulting in a concentrated payment of accounts payable from November - December last year and January - February this year in this quarter. Currently, the payment cycle for suppliers has been adjusted to 60 days.
According to Li Xiang's disclosure at the interim results conference, as of now, Li Auto has more than 3,100 charging stations equipped with over 17,000 charging piles. Li Auto is confident that it will achieve the goal of having 4,000 charging stations by the end of this year.
A large - scale charging network requires high - frequency usage to generate revenue, which also depends on the recovery of Li Auto's vehicle sales.
Li Xiang and Li Auto's management also anticipated this. At the interim results conference, Li Xiang announced organizational reform measures to actively seek change and try to reverse the current situation.
Li Xiang introduced at the interim results conference that Li Auto carried out a large - scale organizational reform of its sales team in August. Currently, the headquarters directly manages 30 regions. At the same time, a Sales and Service Operations Department and a Marketing Department have been newly established, and the store - location selection team has been reorganized. The training academy and vehicle delivery team have also been strengthened. This transformation of the sales system is not a passive response but an active strategic upgrade to better meet the needs of front - line staff and strengthen the advantages of direct sales. It may take some time to adapt in the short term, but it will continuously improve the user experience and team efficiency in the long run.
03 Offense or Defense for Li Auto?
Compared with the covetousness of its competitors, the most important question Li Auto needs to consider is whether to go on the offensive or stay on the defensive.
Or more specifically, if it goes on the offensive, can it succeed? If it stays on the defensive, can it hold its ground?
Among all the new - force automakers, there are not many profitable ones, and Li Auto is one of them. The gross profit margin and profit that Li Auto has been trying to maintain in the first half of the year are the most convincing factors for investors in the capital market.
Li Auto's early profitability can be mainly attributed to three factors.
First, it alleviated users' range anxiety with its extended - range technology. Second, it was the first to attract family users by creating family - oriented scenarios such as "refrigerators, color TVs, and big sofas", thus accumulating a certain number of fans. Third, its "copy - paste" production method reduced the development cost of Li Auto's vehicles, giving it a certain cost advantage.
Judging from the situation in August, with the market encirclement it faced when entering the pure - electric market, Li Auto's advantage in product definition has been declining. Coupled with the public opinion storm caused by the i8's collision with a truck, in addition to losing some potential users, it also affected Li Auto's existing car owners.
While the whole network was criticizing Li Auto, some people also targeted Li Auto owners going about their normal business, filming all kinds of flaws in their driving to use as material to attack Li Auto. It will be extremely difficult for Li Auto to rely on its fans to hold its ground like Xiaomi does.
According to the first - half - year financial report, Li Auto chose to maintain its price to preserve its gross profit margin. The decline in revenue was offset by strict cost control, and finally, it achieved profit growth. However, starting from the i8, Li Auto has started to cut prices to increase sales volume.
This is also a problem that Li Auto needs to weigh. If it maintains its brand premium, it has to accept a contraction in revenue. If it exchanges price for volume, it may further compress its profitability, affect the recognition of its existing car owners, and reduce its prospects in the capital market.
Li Xiang said at the results conference that the product and SKU strategy will return to the logic of "a single strong SKU", with all core configurations fully equipped to offer the best product value to users. Currently, we need to solve the problem of "lagging iteration rhythm" and plan to accelerate the dual - iteration of "product + technology", aiming to regain the leading position in the whole - vehicle product and AI aspects in 2026, similar to the era of the L9 in 2022.
To go on the offensive, Li Auto needs to show new product strength. When the "refrigerator, color TV, big sofa" concept has been copied by other companies and it is difficult for Li Auto to establish an advantage as a new player in the pure - electric market, Li Auto still has stories to tell.
AI is one of them.
Li Auto's CTO, Xie Yan, said at the interim results conference that the progress of the self - developed chip has exceeded expectations: it was successfully taped out and returned at the beginning of this year. Currently, it is undergoing automotive - grade testing, and all indicators meet the standards. It is planned to be mass - produced and deployed in flagship models next year, leading similar projects in terms of progress.
This has raised new expectations for Li Auto's large - model performance. Li Xiang said that the safety of VLA driving will be improved to 10 times that of human driving within the next two years, and L4 - level autonomous driving will be achieved by 2027 at the latest.
Going global is also an option.
According to the introduction from Li Auto's management, it has established R & D centers in Germany and the United States, and has systematically built overseas sales/after - sales organizations and IT systems. The key target markets are the Middle East, Central Asia, and Europe. At the same time, all products to be launched in 2026 will be developed in accordance with global regulations.
However, Li Auto's management also admits that it currently faces challenges such as brand recognition and channel construction.
To succeed in the offensive, support from sales volume and revenue is essential. Once sales volume is blocked, the pressure on other aspects will increase.
In this regard, Li Auto, which is actively seeking change, may have to endure the pain caused by the "rhythm conversion" for some time.
Disclaimer: This article involves content related to listed companies. It is the author's personal analysis and judgment based on the information publicly disclosed by listed companies in accordance with their legal obligations (including but not limited to temporary announcements, periodic reports, and official interactive platforms). The information or opinions in this article do not constitute any investment or other business advice. Shizhibang will not be responsible for any actions taken based on this article.