At its autumn strategy meeting, Li Auto admitted to a slowdown in efficiency and outlined a clear plan to overcome its recent struggles. For the first time, the company publicly acknowledged that its sales and research & development (R&D) pace had slowed, leading to declining performance over the past few months.
In October, Li Auto sales plummeted 38.3% year-on-year, with the company only managing to sell 31,767 units, marking five consecutive months of negative growth. This stark reality led Li Auto to reevaluate its strategy, particularly in terms of its product strategy, R&D processes, and global expansion.
Li Auto’s Key Strategic Adjustments
Li Auto’s leadership recognized the need to increase efficiency and adapt faster to the intensifying competition in the electric vehicle (EV) market. The company has already initiated several strategic changes to position itself for better growth and to regain momentum.
1. Shortening the Product Iteration Cycle
Li Auto plans to shorten its product development cycle from four years to two years. This major change aims to keep the company’s vehicles competitive by ensuring that its products are updated faster than the current four-year cadence.
To accelerate this change, Li Auto is collaborating with its supply chain partners for synchronized operations, ensuring a speedier turnaround in model updates. This will be essential in competing against companies that are now innovating at a rapid pace.
2. Focus on Differentiated Design
Li Auto is also shifting its focus from its previous “Matryoshka doll” design philosophy. The company will now create greater differentiation between its vehicle models, emphasizing distinct design identities rather than just offering configurations. This will help to prevent consumer confusion, especially when it comes to models like the L6, L7, L8, and L9, which were criticized for lacking a clear premium feel.
The company also announced a commitment to “no half-hearted products”, prioritizing models that will truly “amaze users” and offer superior driving experiences.
Challenges and Solutions for Li Auto’s R&D Systems
Li Auto’s R&D system also faced internal reflection. The company admitted that an overemphasis on cost-effectiveness led to resource compression as revenue declined. This resulted in slowdowns in product innovation and employee morale.
In response to these challenges, Li Xiang, the CEO of Li Auto, has personally taken over HR management to restructure and adjust staffing, ensuring a more efficient and innovative R&D environment.
Li Auto is also planning to create an independent R&D department focused on new product development, similar to the approach taken by Xiaomi Auto.
Global Expansion Strategy: Moving Beyond China
Another key decision for Li Auto is to accelerate its global expansion. Initially, the company had planned to expand outside China only after 2028, but the recent strategic review revealed the need to shift gears and pursue international markets sooner.
Li Auto had relied on parallel exports to regions like Russia, the Middle East, and Central Asia, but restrictive policies in these regions significantly affected its sales. As of 2026, new regulations will curtail car exports, prompting Li Auto to focus more heavily on official international retail and expansion.
In October 2025, Li Auto opened its first overseas authorized retail center in Tashkent, Uzbekistan, marking the company’s official entry into Central Asia. Additionally, R&D centers have already been established in Germany and the US, with further international retail expansion planned.
Li Auto aims to adopt a “differentiated approach”, prioritizing emerging markets first, before entering mainstream markets such as Europe.
Investment in Artificial Intelligence and Inference Computing
Another significant focus for Li Auto is AI investment. The company dedicated an entire day at the strategy meeting to discuss its plans to expand its inference computing capacity. Li Auto currently possesses 10 EFLOPS of training compute and 3 EFLOPS of inference compute, and plans to increase its inference capacity even further. This will strengthen the company’s AI-powered driving systems, with the goal of improving its self-driving capabilities and user experience.
Li Auto’s self-developed chips are crucial to this effort, with the first-generation chip already undergoing in-vehicle testing. A second-generation chip, focused on inference capabilities, is set to be released in the next two years.
Li Auto’s Path Forward: Aiming for 50,000 Monthly Deliveries
To reach its target of 50,000 monthly deliveries, Li Auto is facing several challenges, including product differentiation, R&D acceleration, and stronger competition. While the company has proven itself in the extended-range EV space, it must now adapt rapidly to meet the demands of the global market.
In conclusion, Li Auto’s strategy overhaul focuses on increased product iteration speed, expanded global presence, and AI innovation. Whether these changes will enable the company to regain its momentum and reach 50,000 monthly deliveries remains to be seen, but the commitment to improvement is clear.
