Exclusive 36kr | Li Auto Overhauls Organizational Structure: Cutting Out Middle Layers, Vehicle and Smart Driving Product Teams Return to R&D System

Image source: Visual China

Text by | Xiao Man
Editor | Li Qin, Yang Xuan

After Li Xiang set the goal of "returning to the entrepreneurial state" last year, Li Auto was still streamlining its organization and processes.

36Kr Auto has learned from multiple informed sources that Li Auto is about to conduct a new round of organizational structure adjustment around the product decision - making process. It plans to split some key functions of the product department and integrate them into the R & D department.

In terms of group relationships, the product department of Li Auto is led by Fan Haoyu and includes electric vehicle body, spatial intelligence, autonomous driving terminal products, interaction design, platform operation, App and official website, etc.

People familiar with the adjustment trend told 36Kr Auto that the current adjustment mainly targets the core product definition teams such as electric vehicle body and autonomous driving. Specifically, it has been confirmed that the electric vehicle body definition team of the product department will be split and integrated into the vehicle R & D department led by Liu Liguo; the autonomous driving terminal product team will be merged into the base model R & D team led by Zhan Kun.

"Maybe some product personnel related to user experience will also join Liu Jie's product line," said an informed source.

People close to Li Auto's senior management analyzed to 36Kr that the decision - making process for vehicle product definition has been cumbersome and criticized within Li Auto for a long time. The core reason is that three core departments are involved in product decision - making: the product line department led by Liu Jie at the front end, the platform product definition department led by Fan Haoyu in the middle, and the R & D team.

The core essence of this adjustment is to "return product definition to R & D" in order to shorten the product decision - making process and improve the efficiency and quality of product definition. After the adjustment, the decision - making for vehicle products will be reduced from three departments to two, namely the product line and R & D departments, "eliminating the intermediate platform product definition."

The product attribute of intelligent assisted driving is relatively weak, and there has always been a debate in the industry about whether it is necessary for the product and R & D to be parallel departments. In the organizational structures of most companies, assisted driving R & D and product are the same business department. Li Auto's move of "handing over the product to R & D" is also in line with the mainstream trend in the industry.

Streamlining the Product Decision - Making Process by Eliminating Intermediate Links

36Kr Auto has learned that this adjustment has spread within Li Auto and oral notifications have been made.

Looking at the previous organizational structure, Li Auto's "product department" was a large network covering the vehicle's software and hardware experience, including core sectors such as electric vehicle body, spatial intelligence, autonomous driving terminal products, interaction design, platform operation, App and official website. Most of the user - perceivable experiences were defined by them.

"After the adjustment, the product department will continue to be responsible for businesses such as spatial intelligence and smart glasses," said a person close to Li Auto.

The core change in this adjustment is to shorten the product definition process. In the past structure, a function or vehicle model had to go through three levels of transfer: "product line - product department - R & D department (engineering implementation)". After the adjustment, the product department is removed, and the product line and R & D department are directly connected.

The reason why Li Auto established both the "product line" and the "product department" was the result of comprehensively learning from Huawei since 2022.

In 2024, Li Auto adjusted its product organizational structure: the vehicle model PDT (Product Development Team) was separated from the product department led by Fan Haoyu and merged with the commercial PCT (Product Commercial Team) to form the "product line", which is led by Liu Jie.

Since then, the product line has focused on the decision - making and operation for product commercial success. It is responsible for collecting and summarizing various information from users, experts, partners, and the industry, determining product definitions based on this, and coordinating the work of various departments.

According to the original plan, the task and goal of the product line were to "achieve commercial success, satisfy users, and make the company profitable." During the product development stage, it focused on cooperation with the R & D and supply teams; during the product launch period, it focused on cooperation with the sales and marketing teams.

After the adjustment, Fan Haoyu's product department took a step back and continued to focus on "platform - type products" such as intelligent driving, intelligent space, and electric platforms.

At that time, Li Auto tried to transform from a product - oriented company relying on blockbuster models into a process - oriented company with a sound organizational process and long - term competitiveness. In terms of product R & D, it used a strict process to ensure that each product had an accurate market positioning and avoid blind R & D. However, the result was that the organization became bloated and decision - making became slow.

"When we make one move, our peers can make two moves. Our iteration frequency is like our peers playing cards with us while watching our cards," Li Xiang admitted at the end of last year that the company's efficiency had slowed down.

At the earnings conference call in the third quarter of last year, Li Xiang said that the company would return to the management mode of a startup. One of the measures was to "continuously improve efficiency rather than occupy more resources." Li Xiang believed that only by increasing value, improving efficiency, and solving key problems could the company continuously meet users' needs in a highly competitive and rapidly changing environment.

Continuous Adjustment: Li Auto is Still Finding its Rhythm

In the current situation where automotive technology changes slowly and products are becoming increasingly homogeneous, a small group of top - notch product managers can no longer support Li Auto to win the entire battle. Li Xiang has always been trying to make the company have a more complete capability barrier beyond product definition.

Since this year, Li Auto has carried out several organizational adjustments. In January this year, to meet the new round of AI competition, Li Auto integrated its R & D teams into base model teams, software body teams, hardware body teams, etc.; at the end of May, Li Auto added three secondary departments related to embodied intelligence, including embodied engineering, embodied interaction, and embodied behavior, to the base model department.

Since last year, Li Auto has been facing the pressure of weak sales growth. The latest delivery data shows that Li Auto delivered 30,895 new vehicles in June; in contrast, NIO delivered 40,597 vehicles, and XPeng delivered 40,126 vehicles.

The industry generally believes that the factors contributing to its sales pressure are, firstly, the conservative facelift of the L series in 2025, which has led to the rapid catch - up of its core product competitiveness by peers. At the same time, the MEGA and Li Auto i8, which shoulder the heavy responsibility of the brand's pure - electric breakthrough, have suffered successive setbacks. As a result, the momentum of Li Auto in the pure - electric track is currently mainly supported by the i6 model.

A company with "leading product strength" as its core naturally cannot afford to lose ground. Especially this year and in the coming years, the industry competition has intensified unprecedentedly. High - end market players such as NIO, Hongmeng Zhixing, and Zeekr have quickly broken through, and Xiaomi Auto is also eager to enter the market. The pressure on Li Auto to maintain its product strength has also increased accordingly.

"First of all, improve decision - making efficiency and eliminate those endless ineffective meetings," said an informed source. Let the product and R & D departments communicate directly.

Of course, every adjustment is accompanied by pain. The power structure is decentralized and reorganized. Some people in the departments involved in the adjustment will leave, the original rhythm will be disrupted, and then they have to wait for a restart.

An engineer from Li Auto told 36Kr Auto that after Chen Wei left, the R & D progress of Li Auto's base model slowed down, and some departments didn't receive new requirements for several months.

In the long run, Li Auto is trying to make the company return to the combat state of the startup mode through organizational adjustment, but it is bound to experience short - term pain.