$2 Billion Transformation: Li Xiang Turns the i8 Into an iPhone

"How to create a new era SUV that can simultaneously possess the advantages of an off-road vehicle, a sedan, and an MPV? Upgrade the definition of SUV to a new standard."

On July 29th, at the launch event of the Li Auto i8, Li Xiang posed a question and also provided his and Li Auto's answer, which is the Li Auto i8.

Combining the off-road capability, climbing and rough-road performance of an SUV, the handling of a sedan, and the comfort and space of an MPV, the Li Auto i8 truly brings together the strengths of these three market segments.

Behind this, Li Xiang's purpose is not merely to wash away the shadow of MEGA's failure, but to create a whole new category, enabling Li Auto to enter the pure electric market and continue to stand at the top of the new energy vehicle industry.

After all, despite being widely underestimated both inside and outside the industry, Li Auto opened up the new category of range-extended vehicles.

Nowadays, except for NIO and Great Wall Motors, almost all Chinese car manufacturers have already launched extended-range models, and even Volkswagen will introduce its first extended-range vehicle in 2026.

However, from an external perspective, the Li Auto i8 is simply an SUV, which is not a completely new category.

However, between the lines of the press conference, Li Xiang revealed his ambition.

Ideal i8 = SUV + Sedan + MPV. I don't know what this scene makes the readers think of, but the thoughts of Yiou Auto directly return to:

January 9, 2007. That's right, it was the day Steve Jobs unveiled the first-generation iPhone.

"An iPod, a phone, an internet communicator. An iPod, a phone, an internet communicator. Do you get it? These are not three separate devices, this is one device, and we are calling it the iPhone!"

It was under Jobs' astonishing insight that Apple combined the iPod music player, phone, and internet terminal to create a new species: the smartphone. This opened the door to the mobile internet era.

Facing rampant plagiarism, severe product homogenization, and intense competition in the Chinese automotive industry, Li Xiang's product concept of integrating off-road vehicles, sedans, and MPVs is undoubtedly an attempt to create a new species. He hopes to open up a new blue ocean for the Chinese automotive industry, just as the Li Xiang ONE pioneered the range-extending track in 2019.

For Li Auto, if the i8 can accomplish this mission, it will not only allow Li Auto to truly enter the pure electric market but also avoid homogeneous competition, enabling Li Auto to gain a new growth pole.

To win this battle, Li assigned two executives who previously led the Li ONE and L series, Zhang Xiao and Liu Jie, to take charge of specific product work.

In the field of assisted driving, Lang Xiangpeng's team successfully completed the development of the VLA large model, enabling the Li Auto i8 to be the first to feature the VLA driver large model, thereby creating a new competitive edge for Li Auto.

The redesign alone cost 2 billion.

"The first time I saw a picture of the Ideal i8, I definitely thought it was a bit ugly."

At the launch event for the Ideal i8, Li Xiang jokingly commented on the new i8's design language. However, he then changed his tone and said, "After a while, I found it more and more pleasing to the eye. When I saw the actual car, I thought the Ideal i8 looked amazing."

The brand-new i8 features a distinctly MEGA-inspired design, and design was precisely one of the major factors that led to MEGA’s downfall.

However, with the launch of the Home Edition, Li Auto MEGA mounted a counterattack, with its sales increasing more than threefold, securing its position as the sales champion among pure electric vehicles priced above 500,000 yuan.

Among the many factors that attract users, there is one element that surprises outsiders, which is design.

Li Xiang revealed, "It may be hard to imagine, but the number one factor for new owners choosing the Li Auto MEGA is its design."

Although more and more car owners have begun to accept MEGA's design language, last year's lesson was undeniably painful.

According to the original plan, the Li Auto i8 was initially intended to be launched as the smaller MEGA. However, after the setback of the MEGA last year, Li Auto overturned the original plan and, in particular, made adjustments to the rear design language of the i8.

Do not underestimate the adjustments made to the rear-end design; what follows are the costs of reworking the white body and molds, among other expenses, with a total investment of nearly 2 billion yuan.

Regarding original designs, we have our own persistence and patience," Li Xiang emphasized at the launch event. The design of the Ideal i8 is not for the sake of design itself, but rather a pursuit of true user value.

Taking aerodynamic drag as an example, the Ideal i8 has a drag coefficient of only 0.218, which is even lower than the updated Model 3's 0.219. This not only improves the interior quietness of the Ideal i8 but also saves energy consumption, resulting in a longer driving range.

In recent years, some car manufacturers have relied on clever design imitations to become trendsetters in the Chinese automobile market. Subsequently, this mature methodology has also been adopted by other car companies.

Although these car companies have achieved success with this approach, it has sparked significant domestic and international controversy, and has further intensified the already highly homogeneous product competition, leading to increased involution in the Chinese car market.

At this moment, Li Auto’s commitment to original design—regardless of its ultimate success or failure—is the right path that China’s automotive industry must take.

Design is just one part of Li Xiang's hope to create a new species to compete again in pure electric vehicles.

To ensure the competitiveness of the Li Auto i8, Li Auto has developed an all-new high-voltage pure electric platform for the model. The entire lineup comes standard with a 5C ternary lithium ultra-fast charging battery, offering CLTC ranges of 670 km and 720 km, respectively. It can achieve a charging speed of “500 kilometers of range added in just 10 minutes of charging.”

With the support of the new platform, the Li Xiang i8 truly achieves the combination of an SUV, a sedan, and an MPV.

All models of the Li Auto i8 come standard with dual-chamber air suspension, offering four adjustable height levels. In the highest air suspension setting, the ground clearance reaches up to 19.6 centimeters, giving the Li Auto i8 the off-road capability of an SUV.

At the same time, the Li Xiang i8 also offers the handling and accessibility of a sedan. The low center of gravity design brought by the pure electric platform and the body stiffness of 49,500 Nm give the Li Xiang i8 handling comparable to that of the BMW i7. The minimum ground clearance of the second-row threshold can be lowered to 401 millimeters, allowing the Li Xiang i8 to provide a sedan-like boarding and alighting experience.

To showcase the space of the Ideal i8 comparable to an MPV model, Li Xiang directly invited the design team and had six people, each with an average height of over 1.8 meters, sit inside.

Finally, based on the lessons learned from MEGA last year, Li Auto has built the largest supercharging network in the country, consisting of 3,000 supercharging stations and 16,000 supercharging piles, achieving the highest supercharging coverage rate in the industry.

However, all of this is just the hardware configuration and preparation of the Li Auto i8. On the software side, the Li Auto team has built a new moat.

Play Need for Speed in a virtual city.

In 2007, the birth of the iPhone once again profoundly demonstrated to the world how software defines hardware. To this day, although the iPhone is lagging behind in some hardware configurations, the iOS system remains a moat that other phone manufacturers cannot cross.

"Looking at my own abilities ten years from now, I hope to achieve the same level as Apple Inc." As early as a conference call in 2022, Li Xiang expressed his hope to build Li Auto into a company like Apple.

To become like Apple, software capability is an absolutely indispensable part. In the current Chinese automotive industry, advanced driver assistance capability is the most important software capability, without exception.

As the first company to deliver end-to-end advanced assisted driving, Li Auto has once again demonstrated its core capabilities to the public by delivering the brand-new VLA driver large model together with the Li Auto i8.

Before 2024, the outside world did not regard Li Auto as a leading player in advanced driver assistance systems. However, when Li Auto became the first to deliver end-to-end advanced assistance last year, no company dared to overlook Li Auto's capabilities anymore.

Now, Li Auto has once again taken the lead in completing the iteration, making the VLA large model the first to be deployed in its vehicles.

Why is Li Auto able to achieve this?

Li Xiang Auto’s Senior Vice President of Autonomous Driving R&D, Lang Xianpeng, told EO Auto and other media that Li Xiang Auto has trained a world model using real-world data, and then used this world model for simulation training. This not only significantly reduces training costs, but also enables rapid iteration and improvement of advanced assisted driving capabilities.

"Our ultimate goal is to have our algorithms run 'Need for Speed' inside the 'Simulated World'." Lang Xianpeng used two games as metaphors for the world model and the intelligent driving algorithm. Li Auto builds a simulated world model, namely the "Simulated World," by collecting driving scenarios and data from the physical world.

"Need for Speed" refers to Li Auto's intelligent driving algorithm, which undergoes reinforcement learning within a world model and ultimately becomes an "experienced driver."

In Lang Hanpeng's view, the ability to create a realistic world model has become the core technological barrier for Li Auto.

However, this raises a question: all car manufacturers are collecting driving scenarios and data, so why does Li Auto have a competitive moat?

"Because we have 1.2 billion kilometers of data," Lang Xianpeng stated. Without this data foundation, first, it would be impossible to train a world model, and second, it would be unclear what kind of data needs to be generated. "This barrier is very high, and it is difficult for others to replicate it in a short period of time. The iteration speed must be ensured, and actual vehicles must be used for testing, so it is very hard to surpass us."

It is reported that Li Auto began collecting data five years ago. In 2020, as Li Auto's first full delivery year, it transmitted 15 million pieces of valid data back and started creating a data closed loop.

Subsequently, as Li Auto’s sales continued to rise, the amount of valid data collected by the company also rapidly increased, reaching a total of 1.2 billion kilometers.

It was precisely in this process that Li Auto's autonomous driving evolved from rule-based algorithms to end-to-end systems, and further iterated to the current VLA large model.

In addition, from the development history of Li Auto, Lang Xianpeng believes that the upper limit of the previous generation's technical capabilities is the starting point for the next generation of technology. Therefore, "if an automaker wants to skip the rule-based algorithms and end-to-end stages and directly develop VLA large models, I believe it is not feasible."

With the accumulation of massive amounts of data and the construction of a world model, Li Auto has completely changed the way test models are conducted.

In 2023, Li Auto's training for assisted driving relied entirely on real vehicle testing, covering a total of 1.57 million kilometers, with a testing cost of 18.4 yuan per kilometer.

By the first half of 2025, real vehicle testing will be reduced to only 20,000 kilometers, while simulation testing will exceed 40 million kilometers, bringing the cost down to 0.53 yuan per kilometer—“which is basically just electricity and server expenses,” Lang Xiangpeng stated. He added that the only thing that might limit the training speed now is computing power. If the computing power is high enough, “one day of training could be equivalent to a year of real vehicle testing on the road.”

Nevertheless, Li Auto has not completely abandoned real vehicle testing, as certain tests, such as hardware durability testing, remain irreplaceable. Moreover, the data collected from real vehicle tests can continue to optimize the world model and simulation testing.

"In the past five years, starting from last year's end-to-end approach, our competitors have truly begun to take Li Auto seriously," said Lang Xiangpeng. However, it is too late because the aforementioned capabilities cannot be fully established overnight. It is precisely because of the accumulation over the past five years that Li Auto was able to deliver the VLA large model first this year.