Li Xiang is not ideal, but the transformation depends on Li Xiang.
The "top student" among new car - making forces, Li Auto, has encountered multiple crises such as declining sales and operating losses after 10 years of establishment.
Facing the crisis, Li Xiang, the founder, chairman, and CEO of Li Auto, has decided that starting from the fourth quarter of this year, Li Auto will firmly return to the management mode of a startup company.
Currently, although Li Auto is facing a crisis, it is not far behind. Can initiating changes help Li Auto overcome the difficulties?
01. Crisis of the Top Student
Among new car - making forces, Li Auto has always been a top student. It takes the mid - to high - end route but still holds the top position in sales among new car - making forces. It was also the first to achieve profitability, with a considerable profit margin, far ahead of other new car - making forces.
However, this good development came to an end in 2025.
Firstly, in terms of sales. Since 2025, Li Auto's position as the sales champion among new car - making forces has been continuously challenged by Leapmotor and was eventually surpassed. More importantly, besides Leapmotor, the sales of other new car - making forces have also gradually outpaced Li Auto.
DoNews once counted the sales performance of 13 major domestic new car - making forces during the peak car - selling seasons of "Golden September and Silver October" (September and October). The top 5 new car - making force companies in cumulative sales were Leapmotor with 136,900 vehicles, Hongmeng Zhixing with 121,100 vehicles (including AITO, ZEEKR, and other brands), XPeng Motors with 83,600 vehicles, Xiaomi Auto with over 80,000 vehicles, and NIO with 75,100 vehicles (including NIO, LeDao, and Firefly). Li Auto's cumulative sales were 65,700 vehicles, a nearly 40% decrease compared to the same period last year, ranking 7th.
Source: Chart by DoNews
It's true that in the current market, cheaper cars are more popular. Some new car - making forces have launched models at mass - market prices to boost sales and quickly captured market share through cost - effectiveness. However, the reason for Li Auto's "decline" is not as simple as price. After all, Hongmeng Zhixing takes the high - end route, and Xiaomi Auto is not cheap either.
In DoNews' view, the advent of the "large - car" era, the high - end transformation of car companies, and the layout of the extended - range track have all eroded Li Auto's living space from the outside.
Now, the car market is witnessing a wave of "large cars", and more and more "bulky" models are being launched. Meanwhile, with the high - end transformation of domestic brands, more and more competitors are entering the price range of 300,000 yuan and above, and the vehicle configurations are becoming more and more competitive. Li Auto's advantages in large - sized models and the first - created configuration combination of "refrigerator, color TV, and big sofa" have lost their uniqueness, and the model advantages have been weakened.
In addition, since 2025, many car companies have launched their own extended - range technologies and models, announcing their entry into the extended - range market. The extended - range track on which Li Auto's sales depend has been divided up. Moreover, the electric vehicles that Li Auto has been vigorously developing in the past two years have not yet gained momentum and have not provided strong support for sales.
In the third quarter of 2025, Li Auto's total deliveries were 93,200 vehicles, a 39% year - on - year decrease. With sales far from the previous level, Li Auto's vehicle sales revenue dropped to 25.9 billion yuan, a 37.4% decrease compared to 41.3 billion yuan in the same period last year and a 10.4% decrease compared to 28.9 billion yuan in the second quarter.
Li Auto's profitability has declined sharply. In the third quarter of 2025, Li Auto's total revenue was 27.4 billion yuan, a 36.2% year - on - year decline. It turned from profit to loss, with a net loss of 624 million yuan, while the net profits in the third quarter of 2024 and the second quarter of 2025 were 2.8 billion yuan and 1.1 billion yuan respectively.
Source: Li Auto's announcement
02. Difficult Hurdle in the Electric Vehicle Field
Besides the pressure on the extended - range track, Li Auto has suffered a lot since entering the electric vehicle track. A series of public - opinion crises have vividly illustrated its ill - fated journey.
Currently, Li Auto has three pure - electric models: MEGA, i8, and i6. Among them, the first electric vehicle, MEGA, was launched in March 2024. However, due to the controversial exterior design, it triggered a marketing crisis, resulting in a large number of users canceling their orders, and the sales got off to a bad start. At the Shanghai Auto Show in April this year, the Li Auto MEGA Home special family edition priced at 559,800 yuan and the newly upgraded Li Auto MEGA Ultra intelligent version priced at 529,800 yuan were officially released. After that, the sales of MEGA rebounded, and it won the sales championship in the pure - electric vehicles over 500,000 yuan and MPVs over 500,000 yuan in the third quarter.
However, the crisis surrounding MEGA lingers. In late October, a fire incident involving a 2024 - model Li Auto MEGA occurred in Shanghai, triggering a lot of discussions. After that, Li Auto initiated a voluntary recall, recalling 11,411 units of the 2024 - model Li Auto MEGA due to "insufficient anti - corrosion performance of the coolant".
This recall incident had a great impact on Li Auto's financial report data for the third quarter. Li Tie, the CFO of Li Auto, revealed in a conference call that about 1.1 billion yuan of warranty costs were set aside for the MEGA recall in Q3. In addition, Li Auto's financial report shows that the gross profit margin in the third quarter of 2025 was 16.3%. If the estimated cost of the Li Auto MEGA recall is excluded, the gross profit margin would be 20.4%.
The pure - electric SUV Li Auto i8, which was launched at the end of July, triggered negative public opinion due to a collision - test video with an 8 - ton heavy - duty truck of Chenglong Trucks. Moreover, the product itself lacks highlights, so it didn't have good sales performance.
In September, Li Auto launched another attack on the pure - electric market and released the new - form five - seat pure - electric SUV Li Auto i6. The standard version of Li Auto i6 is priced at 249,800 yuan and started delivery on September 27. It is reported that Li Auto i6 adopts an innovative shark - shaped low - drag design and is built on a native high - voltage pure - electric architecture, equipped with a 5C battery, which can maximize energy - efficiency performance and achieve a CLTC cruising range of 720 kilometers. It also comes standard with Li Auto's self - developed VLA driver large model and the "Li Auto Assistant" intelligent agent, bringing users a leading - edge intelligent experience in the industry.
After its launch, Li Auto i6 quickly became the "star of Li Auto's pure - electric vehicles". On November 1st, Li Xiang said, "The sales of Li Auto i6 have been booming since its launch, with orders exceeding 70,000, far exceeding our expectations." The latest news shows that the total number of orders for Li Auto i8 and Li Auto i6 has exceeded 100,000.
However, what follows is Li Auto's production - capacity crisis. DoNews saw on Li Auto's official website that currently, Li Auto i6 is expected to be delivered 16 - 19 weeks after ordering.
Source: Li Auto's official website
The successive crises of electric vehicles reflect that Li Auto's products in the past two years have been somewhat out of touch with market demand, resulting in the models not being well - received by the market. Although the orders for Li Auto i6 have increased, it has exposed Li Auto's supply - chain shortcoming.
To solve the production - capacity bottleneck, Li Auto i6 officially adopted a dual - battery supplier model starting from November, introducing Sunwoda and CATL to form a complementary supply. Ma Donghui, the president of Li Auto, said, "Li Auto will ensure that the battery performance and quality standards of the two suppliers are consistent." It is also expected that the monthly production capacity of Li Auto i6 will steadily increase to 20,000 units at the beginning of next year.
03. Li Xiang No Longer at Ease
In fact, the decline in sales and performance is only a short - term crisis that Li Auto is facing. Looking at the long - term, the most difficult problem that Li Auto needs to solve is the lack of its own "growth potential".
Now, most mainstream new car - making forces have been established for more than 10 years. They are exploring new growth poles through multi - dimensional means such as global layout, product - matrix optimization, and cost control, and have achieved some success.
Take Li Auto's old rivals, NIO and XPeng Motors, as examples.
Among them, NIO adopts a multi - brand strategy. In addition to the main NIO brand, it has launched sub - brands LeDao and Firefly, which are more mass - market - oriented, and they have provided strong support for the total sales. Currently, LeDao, whose model prices are roughly in the range of 200,000 - 300,000 yuan (the price can be as low as more than 100,000 yuan if the BaaS battery - leasing plan is adopted), has a higher monthly sales volume than the NIO brand. In September and October, the NIO brand delivered 13,700 and 17,100 new cars respectively, while LeDao delivered 15,200 and 17,300 new cars respectively; the monthly sales volume of the Firefly brand, with a starting price of about 120,000 yuan, is close to 6,000 units.
XPeng Motors has successfully opened up the mass market in the automotive business with the MONA M03 and XPeng P7+ launched last year, and is focusing on developing cutting - edge technologies such as AI, embodied intelligent robots, and flying cars. At the beginning of November, XPeng Motors' new - generation humanoid robot IRON was released. Due to its highly anthropomorphic appearance and stable and smooth movement ability, it was suspected by netizens to be a real - person performance, which triggered a lot of discussions. He Xiaopeng, the chairman and CEO of XPeng Motors, had to cut open the "muscle" covering the robot's mechanical structure on - site to prove its authenticity. This reflects the current technological leadership of XPeng Motors from the side.
These cutting - edge technologies not only bring mass - market orders to XPeng Motors but also strongly contribute to expanding XPeng Motors' growth space. The market is discussing re - evaluating the value of XPeng Motors.
In contrast, Li Auto's dual - track layout of extended - range and pure - electric vehicles has not brought considerable growth so far. Instead, it has repeatedly put the company in disputes and even damaged its brand image.
Just as Li Auto postponed the launch of pure - electric vehicles decisively after the poor start of MEGA in 2024, in the face of the crisis, Li Xiang showed his decisiveness again and decided to make changes.
At the earnings conference call for the third quarter of 2025, Li Xiang put forward an ambitious goal: "In 3 - 5 years, Li Auto will become the best - performing enterprise in the field of embodied intelligence."
In addition, Li Xiang said that starting from the fourth quarter of this year, Li Auto will firmly return to the management mode of a startup company. He admitted that after three years of experimentation, he found that the professional - manager management system is not suitable for Li Auto at this stage. Instead, it has made them "become a worse version of themselves".
According to a report by LeiDi.com, since June 2025, Li Auto has carried out a series of internal adjustments. In June, the person - in - charge of Li Auto's sales and service system was changed and was placed under the leadership of Ma Donghui. Thus, the integration reform of R & D, production, and sales organizations was completed, and the coordination efficiency was greatly improved. In November, the person - in - charge of the organizational human resources was changed and was placed under the leadership of Li Xiang. Thus, talent management, product definition, and company strategy are now fully led by Li Xiang, the top leader of the enterprise.
Li Auto is waiting for a major change. It is still unknown how much this change will affect the company's sales, performance, and funds. However, it is certain that the result of this change will determine the company's survival.
This article is from the WeChat official account "DoNews" (ID: ilovedonews), author: Xu Yun, published by 36Kr with authorization.