Selling Both Extended-Range and Pure Electric Models Simultaneously Is Li Auto's Biggest Challenge

Known for being "stingy," Li Auto was unusually generous at the launch event of the Li Auto i8: choosing the same venue as Xiaomi YU7, hosting an audience of several hundred people, and even extending the event duration from the usual 45 minutes to nearly two hours.

Li Xiang’s high expectations for the i8 go beyond this. For example, Li Xiang, who has always been active on Weibo, finally registered a personal short video account on the eve of the i8’s launch. There are also reforms in the sales and marketing system. Furthermore, by the day of the launch event, Li Auto had already prepared a lavish “dowry” for the i8 in the form of 3,000 supercharging stations.

From CEO actions to system reforms, from internal adjustments to external promotion, Li Auto is fully committed to the i8. However, the unprecedented investment also reflects the enormous pressure that Li Auto finds difficult to avoid.

In the warm-up video before the press conference, Li Xiang stated that, unlike his previous two ventures, entering the 10th year of investing in smart cars, Li Auto is just beginning. From 0 to 1, Li Auto has successfully developed the extended-range route, which was not initially favored, and has established a foothold in the competitive market. However, in a turbulent period of industry transformation, merely establishing roots is far from enough; only by achieving breakthroughs from 1 to 10 can there be a glimmer of hope for survival.

Against the backdrop of slowing growth in the range-extended segment, it is clear from the adjusted sales targets that the i8 has naturally taken on the crucial role of driving Li Auto to break through its own limits. As Li Auto reenters the pure electric market, there is no room for retreat—the battle for the i8 must be won; failure is not an option.

01Same price as the L8, just the first step for the i8.

To prepare for the launch of the i8 on July 29, Li Auto has already made extensive preparations.

According to the original plan, the i8 was supposed to be launched last year. However, the heavy blow from MEGA's failure disrupted Li Auto's pace and forced the company to reassess its pure electric strategy.

Misfortune is where fortune depends, and after publicly "admitting mistakes," Li Auto spent another year meticulously refining its approach. As a result, whether it was product strength, the construction of the supercharging network, or the grasp of marketing rhythm, Li Auto advanced steadily and orderly.

As early as the Shanghai Auto Show in April, Li Auto signaled the launch of two pure electric SUVs within the year and subsequently disclosed details to maintain topic heat. Meanwhile, Li Auto has been rapidly expanding its supercharging network to lay a solid foundation for MEGA and the i series. By the time the i8 was launched, Li Auto's supercharging stations had reached 3,000, ranking first nationwide, epitomizing the saying "before the troops move, the provisions go first."

In July, with the i8's presale and launch imminent, Li Auto's promotional campaign intensifies. Although its market presence struggles to compete with rivals like Xiaomi YU7, the promotional efforts are well-coordinated, with both frontline sales staff and top-level executives, including the CEO, fully prepared and committed.

Returning to Weibo, Li Xiang has been very active. From the first appearance of the i8 to its eve of listing, he has frequently spoken out in promotion and even had friendly interactions with Lei Jun as a tribute. On July 24th, even before the i8 was listed, he had already thought of a marketing strategy for after the official release, planning to record an episode explaining the i8. The next day, as short videos had long been predetermined as the mainstream communication channel of the future, Li Xiang, who was always active on Weibo, finally registered his own Douyin account. On his personal account, aside from the first self-introduction post, the remaining four videos are all focused on the i8.

After years of preparation, the i8 launch event finally delivered results that lived up to expectations. Whether it was Li Xiang's explanation of the car's range, space comfort, and battery safety, or Lang Xianpeng and Fan Haoyu's introduction of the latest developments in VLA and Ideal Assistant, the applause on site was continuous. And when the final prices of the three models were announced, significantly lower than the pre-sale prices, the gap further ignited cheers from the entire audience.

Based on the response to the launch event, the Li Auto i8's debut was initially successful, but after a brief celebration, Li Auto still needs to face harsh realities.

02Is it possible to sell both pure electric and range-extended vehicles well at the same time?

In late May, less than a month after the entire Ideal L series was revamped, Ideal officially announced an adjustment to its sales target, lowering it from the initial 700,000 units to 640,000 units. Specifically, the sales target for the range-extended L series was reduced from 560,000 units to 520,000 units, a decrease of 40,000 units. Meanwhile, the target for the pure electric product line was significantly increased from the original 50,000 units to 120,000 units, an increase of 70,000 units.

The timing of the reduction and the actual adjustments both imply that while maintaining the extended-range base, Li Auto is accelerating its strategic shift towards the pure electric market.

However, judging from the performance of the L series and information from sources, it seems that the adjustment of Li Auto's target may not have ended yet. After the renewal of the L series drove sales back to 40,000 units in May, in June, Li Auto's monthly deliveries experienced a year-on-year decline for the first time, with only 36,000 units. Multiple sources indicate that internally, Li Auto is considering further lowering its annual expectations based on a target of 640,000 sales.

Under the encirclement of competing wolves, the sales of Li Auto's range-extended vehicles might have peaked. More challenging is the fact that Li Auto's limited scale makes it difficult to support two independent channels. When the price ranges are highly overlapping and the markets of the i8 and L8 coincide, internal competition is inevitable. Especially since the official price of the i8 overlaps with the L8 range, and the Ultra version is even 10,000 yuan cheaper, the misaligned order between range-extended and pure electric is disrupted, and the market of the L8 is likely to be diverted by the i8.

No car manufacturer has successfully sold both pure electric and extended-range vehicles well at the same time. There is currently no precedent. Can Li Auto be the exception? It's hard to be optimistic.

The challenges of pure electric and range-extended paths put Li Auto's channels and marketing to the test, with even slight missteps potentially leading to self-inflicted problems. Xiaopeng and AITO face the same issue, but as later entrants, they have Li Auto's experiences to learn from. Meanwhile, Li Auto, as the pioneer, can only explore its way forward alone in the dark.

Beyond sales difficulties, the pressure of pure electric targets is even more urgent. From January to June, MEGA's cumulative sales were less than 6,000 units. Based on the adjusted annual pure electric sales target of 120,000 units, an average monthly sales of over 20,000 units is required for the remaining five months, posing a significant challenge.

On one hand, the high-end pure electric market has limited capacity, and the i8 must fight for a share in this constrained space, leading to fierce competition. On the other hand, the Le Tao L90 is eyeing the market, the AITO M8 pure electric version is aggressively entering, and the Model Y six-seater version is also poised to launch. Caught between the three, the Li Auto i8 is beset on all sides. Additionally, five-seater pure electric SUVs from brands like Xiaomi and NIO also pose a threat. The i8 can only break through the competition with a fierce battle, carving out a path of its own.

However, the Li Xiang i8 has a "fatal" flaw - its styling. Although I, as a proponent of pragmatism, find nothing wrong with the appearance of the Li Xiang i8, its rather avant-garde design is still a "Schrödinger's cat". How the market will react remains to be judged over time. The good news is that Li Xiang MEGA's sales have already shown some improvement, so market acceptance of the i8's styling is not impossible.

Since last year, Li Auto has begun to define itself as an AI company. In this regard, Li Xiang reiterated the company's vision, stating that "AI means everything for the future of Li Auto." If achieving the status of an AI company is considered the ultimate "10," then establishing a foothold with range extenders is the transition from 0 to 1, and focusing on pure electric vehicles is the necessary leap from 1 to 2.

In the first season of "Ideal AI Talk," Li Xiang frankly stated, "Everything we are doing today is to get a ticket to L4." The setback with MEGA has greatly reduced Li Xiang's margin for error, and with internal and external challenges, Li Xiang may no longer have the capacity to repeat the mistakes of MEGA.

For Li Xiang, the Ideal i8 is far more than just a new car; it is a crucial gamble in his over ten-year leadership of Ideal.

This gamble concerns the survival of the extended-range vehicle's fundamental market, affects the success or failure of the transition to pure electric, relates to the potential breakthrough from 1 to 10, and greatly determines the confidence for Li Auto to transition into an AI company. There is no retreat and no chance for a do-over in this game. The success or failure of the Li Auto i8 and the i series will greatly impact the future direction of Li Auto.

Whether it is Li Xiang or Li Auto, the i8 campaign must succeed, not fail.