For three consecutive years, Li Auto led sales among China’s new carmakers. Now it faces a sales conundrum.
In 2022, Li Auto launched its range-extended L series, which became the driver of its rapid growth. That year, it sold 133,000 vehicles, up 47.2%.
The momentum carried into 2023, when annual sales reached 376,000, a year-on-year surge of 182.2%. The company became one of the country’s bestselling automotive brands and achieved its first full-year profit.
In 2024, even as competition in range-extended models intensified, Li Auto grew more than 30%, delivering 500,500 vehicles and retaining its sales lead.
Over three years, the company charted a 450% growth trajectory. That rise was built on clear positioning: presenting range-extended cars as versatile, defining family-oriented SUVs through features like fridges, large screens, and plush seating, and rolling out assisted driving features with speed and efficiency.
This sustained product leadership helped the relatively new brand break into the premium segment with a sales expense ratio of about 8%. In both product development and management philosophy, Li Auto has said it benchmarks Apple.
But by 2025, the growth slowed. After setting an ambitious sales target of 700,000 units, Li Auto’s trajectory shifted.
From January to August, cumulative sales reached 263,000, down 8% from a year earlier. In the latest August ranking of new-energy challengers, Li Auto did not even make the top five, after holding the top spot for 24 consecutive months.
The slowdown came early. Despite having five models on sale, deliveries in January and February were only 26,000–29,000. The updated Li L6, launched in April, gave Li Auto temporary relief as monthly sales rebounded to more than 40,000 in May.
But competition grew fiercer. The refreshed L6 could not sustain momentum, and by August, sales had fallen back to around 28,000.
The slump was reflected in its market value. As of September 1, Li Auto’s Hong Kong valuation was HKD 186.5 billion (USD 23.9 billion), down 48% from its 2024 peak.
To understand what happened, 36Kr visited 16 stores across five cities, including Beijing, Shenzhen, and Hangzhou, to explore three questions:
- Who stole Li Auto’s buyers?
- Does it still have a product edge?
- And in a market where heavyweights like Xiaomi and Huawei are going all out, where does Li Auto fit?
Huawei enters, Li Auto stumbles
The Li L9, the most expensive model in Li Auto’s range-extended L series, is priced above RMB 400,000 (USD 56,000). It topped 10,000 monthly sales for five consecutive months and became the company’s main profit driver. But it was also where the first cracks began to show.
In 2024, Huawei’s Harmony Intelligent Mobility Alliance (HIMA) saw its Aito M9 reach annual sales of 158,000, seizing the crown in the same price segment. Meanwhile, the L9’s share slipped. By 2025, average monthly sales had fallen to just over 4,000.
Store visits and car club interviews showed the L9’s user base shifting from a mix of business and family buyers to mostly households. Business-leaning customers migrated toward the M9.
The first-generation L9 launched in June 2022 in a single Max trim, priced at RMB 459,800 (USD 64,372). With a 3,105-millimeter wheelbase comparable to the BMW X7, plus standard air suspension and continuous damping control systems, it offered high-end features at a relatively accessible price.
Many early owners already had gasoline cars from Mercedes-Benz or BMW. A lower price than the BMW X7 and standout comfort were the main reasons they chose the L9. “At this price, there’s nothing better,” several car club members told 36Kr.
Despite its “dad car” label, the L9’s early buyers were diverse, ranging from middle-aged entrepreneurs to single young women. At a time when adoption of new energy vehicles was still limited, these were largely high-net-worth early adopters drawn to new experiences.
Later, Li Auto tried to trade price for volume.
In 2023, it introduced a Pro variant of the L9, with fewer sensors and a downgraded driving chip that restricted navigation assistance to highways. The price dropped RMB 30,000 to RMB 429,800 (USD 60,172). This lower entry point helped push the L9 past 10,000 monthly deliveries for five consecutive months.
The turning point came in December 2023, when Huawei launched the Aito M9 at RMB 469,800 (USD 65,772), positioning it head-to-head with the L9.
With deliveries starting in February 2024, the M9 booked 158,000 orders that year, surpassing the BMW X5 to become China’s bestselling model priced above RMB 500,000.
By contrast, L9 sales fell to 85,800 in 2024 and slipped further to 21,000 in the first half of 2025.
Li Auto updated the L9 twice during this period, adding newer chips, more massage points in the seats, and larger, sharper screens. These incremental upgrades improved competitiveness but did not reignite buyer enthusiasm.
Sales staff observed the L9’s customer base converging on larger households, with fewer single or corporate buyers. “Families care most about space, comfort, and price,” one salesperson said. “More chips or bigger screens don’t move the needle for them, and they don’t broaden the L9’s appeal to other buyer types.”
The Aito M9 painted a different picture. Unlike the comfort-led L9, M9 buyers focused on design and driver assistance, and paid less attention to other features. Inside HIMA and among frontline sales, Huawei’s brand power is seen as decisive. “As long as the product doesn’t stumble, sales will hold. Consumers’ trust in Huawei wasn’t built overnight,” a Huawei source told 36Kr.
In 2025, Huawei went further with the Aito M8, starting at RMB 359,800 (USD 50,372), to target Li Auto’s family car segment. Unlike the business-oriented M9, the M8 has a younger look, offers five- and six-seat layouts, and, compared with the L series’ rear rows, has a flat floor and a roomier third row.
Priced squarely between the L8 and L9, the M8 appeals both to families with strict demands for space, comfort, and price, and to high-end users seeking cutting-edge in-car technology, squeezing Li Auto from both ends of the market.
“M9 buyers average 35 and up, with plenty over 50. M8 customers are clearly younger, mostly 30–35, with many one-child families and even some Gen Z buyers,” an Aito salesperson told 36Kr.
Li Auto’s sales teams are reluctant to discuss customer losses, but Aito dealers are blunt:
“Whichever Aito model customers pick, they are clear they want a range-extended vehicle. Before, only Li Auto did that well. Now we do, so they come to us.”
Why brand power matters as much as specs
The competition between Li Auto and Aito is a snapshot of China’s high-end car market. Above RMB 400,000 (USD 56,000), demand goes beyond product specifications. Brands build strength through design and identity. Mercedes-Benz leans on luxury and quietness to project “business,” while BMW’s engines and chassis tuning convey “performance.” Paying a premium becomes a way for consumers to express identity.
New energy car brands are following the same path. From the Li One to the L series, and later the Li Mega and the i series, Li Auto has cultivated family word-of-mouth and positioned itself as a “mobile home,” tailoring products to household needs.
Aito, from the M5 and M7 to the M8 and M9, emphasizes quality and Chinese cultural design cues while pushing leadership in technology and features. It presents itself as a homegrown tech leader.
One of Aito’s biggest draws is Huawei’s ADS 4.0. The M8 comes standard with ADS 4.0 hardware, while city-level functions are a RMB 12,000 (USD 1,680) option. More than 90% of buyers add it, with salespeople noting that Huawei’s driver assistance system is a strong pull.
As comfort becomes standard across the segment, the product gap between Li Auto and Aito is narrowing. For high-end buyers, brand differentiation is increasingly decisive.
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Family SUVs under siege
The Li L6 and L7 account for more than 60% of Li Auto’s sales. But 36Kr’s visits found the RMB 200,000–300,000 (USD 28,000–42,000) SUV segment mired in a price war, with feature gaps closing quickly. Consumers rarely stay loyal to one brand, and many base their decisions on price.
Models like Aito’s M7 and Onvo’s L90 gained traction by undercutting Li Auto, further squeezing the L6 and L7.
Launched in early 2023 at RMB 319,800 (USD 44,772), the Li L7 is a large SUV with a 3,005-millimeter wheelbase and a combined gasoline-electric range of 1,315 kilometers.
When the first-generation L7 debuted, competition was limited. The Aito M7, with a 2,820-millimeter wheelbase and a “pseudo” six-seat layout, failed to gain traction. Nio’s electric vehicles, with ranges of just about 400 kilometers, put off families.
Li Auto’s range extender addressed both range anxiety and the driving experience. Its wider wheelbase and air suspension delivered best-in-class ride comfort. Seats in the front and rear offered ventilation, heating, and massage, and could fold flat into a full-length bed. This comfort edge made the L7 one of the most popular SUVs on the market.
But the formula was quickly copied. In September 2023, Aito’s updated M7 matched the L7 in product strength while cutting the starting price by RMB 70,000 (USD 9,800). Since then, Li Auto and Aito have been locked in a cycle of competition built on product features and pricing.
In 2024, Li Auto launched the lower-priced five-seat L6 at RMB 249,800–279,800 (USD 34,972–39,172). Leveraging the L series’ reputation, it sold 192,000 units in its first year, averaging more than 24,000 per month.
With its lower price point, Li Auto briefly regained the initiative.
But rivals extended far beyond the M7. New challengers that once focused solely on pure EVs began launching range-extended models. Brands like Luxeed, IM Motors, and Avatr joined the fight. Virtually every automaker in the RMB 200,000–300,000 segment now has a competing product.
Pure EVs are also beginning to threaten the L6 and L7.
The L90, a six-seat EV launched by Nio’s Onvo sub-brand in July, starts at RMB 265,800 (USD 37,212). It supports battery swapping, and with a battery-as-a-service plan, the upfront price can drop to RMB 179,800 (USD 25,172).
“Our cheapest six-seat SUV is still RMB 321,800 (USD 45,052),” a Li Auto salesperson told 36Kr. “Plenty of buyers who only have the budget for an L6 are eyeing the L90. The L6 doesn’t have air suspension or rear screens, but the Onvo does, and it even adds two ‘zero-gravity’ seats.”
In regions where Nio’s swap network is strongest (Jiangsu, Zhejiang, and Shanghai), competition is especially intense. “August was the first full delivery month. Nationwide we’ll be over 10,000, and maybe a tenth of that in Shanghai,” an Onvo employee said. “Nio and Onvo have strong grassroots support across the Yangtze River Delta.”
Li Auto sales staff in the region acknowledged the impact. “After the L90 launch, natural foot traffic for the L6 fell. Now delivery is basically immediate or within a week. Citywide July deliveries were cut in half.”
In the RMB 250,000–350,000 (USD 35,000–49,000) family SUV segment, buyers can now choose five-, six-, or seven-seat layouts. Air suspension, zero-gravity seats, driver assistance, and voice assistants have largely become standard.
Configurations that once set Li Auto apart can now be matched or surpassed within six months, while determined rivals keep pushing prices lower.
In this context, competition for the L6 and L7 goes beyond product comparisons. It has become a grinding contest of features and price.
Winning households by winning kids
The L series’ sustained growth stems from a sharp focus on family users and a system-level moat that is hard to replicate.
From opening the market with its emphasis on extended range, Li Auto has closely tracked shifts in consumer demand. Continuous refinements to noise, vibration, and harshness (NVH), along with advances in air suspension, have kept its configurations and comfort appealing.
Over a three- to five-year cycle, maintaining product leadership is the foundation of the L series’ sales strength. This requires not only sharp market instincts but also strong R&D and supply chain capabilities.
What truly differentiates the L series is how it builds experiences around family life.
“In Li Auto showrooms, it’s striking how often parents ask kids which car to buy, and the kids almost always pick Li Auto,” a salesperson told 36Kr.
Other brands also offer fridges, big screens, and sofa-like seating. Why, then, do children consistently favor Li Auto?
Before purchase, the rear entertainment screen and voice assistant tend to be irresistible to kids. After purchase, children quickly learn to operate them. “Some two-year-olds can already use voice commands to play their favorite cartoons, while some five- or six-year-olds even show their parents how to use voice commands instead of the screen,” the salesperson said.
Making the system intuitive for very young children required adjustments to both software and hardware.
Conversations with Li Auto engineers show the company fine-tuned its algorithms specifically for family use. Its in-car assistant is trained on children’s voiceprints and common mispronunciations for wake and recognition. Because children often speak ungrammatically, the assistant was further trained on child-specific data so its large model could interpret commands more effectively.
Winning over kids also required more than tuning parameters. The assistant responds differently depending on personality, using varied tones for active versus quiet children. It continually adjusts recommendations while ensuring content remains healthy and appropriate.
On-screen interaction is just as important. Screen size and distance were designed for children’s ergonomics, while color and contrast were optimized. Third-party apps were deeply integrated into Li Auto’s operating system. Every detail contributed to the final experience.
Together, these features built strong word of mouth for the L series. In various online reports reviewed by 36Kr, the series consistently ranked at or near the top in net promoter scores (NPS).
This is not simply “putting a plush cover on tech.” It reflects coordination across product, technology, and service systems.
Inside Li Auto, NPS carries strategic weight. “Li Xiang has said in internal letters that chasing sales too hard can throw the company off balance. NPS will be the core goal,” one employee told 36Kr.
Product teams can quickly turn frontline insights into R&D plans, enabling innovations such as swivel zero-gravity seats. A full-stack in-house tech system provides the software and hardware backbone, while consistent marketing and service networks ensure these innovations reach users and close the loop.
Such seamless cross-functional collaboration is hard to match, which is one reason the L series continues to enjoy high praise years after launch.
The limits of the family-first formula
Outside the premium L series, Li Auto launched another vehicle in March 2024: an all-electric MPV called the Li Mega, priced at RMB 559,800 (USD 78,372) for its first version.
Its avant-garde styling has been a double-edged sword, deterring many mainstream buyers while attracting a niche of high-end users.
A Beijing salesperson told 36Kr he sold 20 Li Megas in two days:
“It started with a young woman who had just returned from studying overseas. She placed an order the day she tested it. The next day she pulled me into a WeChat group and said 19 friends from her equestrian club wanted to buy the car.”
Conversations with high-end car sellers suggest that buyers of vehicles priced above RMB 500,000 (USD 70,000) generally fall into two groups. One buys out of passion, paying for branding or unique experiences and often seeking rarity. The other buys for practical purposes, most commonly business networking and status signaling. Only after those needs are met do buyers consider additional features.
Multiple salespeople said the Li Mega’s target audience is uncertain and difficult to cultivate. “Those who buy the Li Mega do it because they love how it looks.”
That sharp-edged design taps into interest-driven consumption at the high end.
Beyond the Li Mega, however, the L series remain steady mainstream products. They share an almost identical family design language that no longer feels fresh. To justify higher brand premiums, the series needs new anchors of value.
On the practical side, the L series’ strong emphasis on serving families narrows its audience. “Have you seen any luxury fuel brand advertise itself as family-friendly?” several luxury salespeople asked. “Before EVs, the BMW X5 was arguably the most family-suited SUV in the premium market, but its better-known moniker was the king of the road.”
The premium market is not about necessity. Demand extends far beyond family use. At the high end, the L9’s competitiveness depends less on specifications and more on business attributes, lifestyle appeal, and the identity the brand confers.
Although brand elevation is challenging, Li Auto’s focus on households, along with its execution from product to R&D, continues to drive recognition and word of mouth in the mid- and lower-tier family market.
“Can’t afford Li Auto? Get Leapmotor. It’s a half-price Li Auto, with almost the same product philosophy,” a Li Auto salesperson told 36Kr. “Who likes Li Auto the most? Leapmotor buyers. A lot of consumers think this way.”
But moving further downmarket is difficult. With channel, supply chain, and cost constraints, trading price for volume is not necessarily the best path.
Squeezed from both ends
Today, the L series is squeezed from both ends. In the lower tier, rivals copy Li Auto’s family-oriented, range-extended concept and launch similar products at more aggressive prices. In the premium market, competitors keep layering business, lifestyle, and identity onto their offerings, moving beyond the range extender and family angle.
Even so, Li Auto still holds the sweet spot in the midprice family SUV market in terms of product, user base, and reputation.
What it needs now is a transfusion: a new product thesis and the technical firepower to mint the next blockbuster.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Xu Caiyu for 36Kr.