Li Xiang apologizes! Sales of LI AUTO’s MPV MEGA are announced

On March 21, Li Xiang, the CEO of LI AUTO, issued a letter to all employees internally, reflecting on the pace and sales of Ideal MEGA, and making targeted adjustments to product management, dealers, charging network layout, and sales expectations.

Li Xiang mentioned in the internal letter that Ideal MEGA and high-voltage pure electric must go through a phase from 0 to 1 similar to Ideal ONE and extended-range electric, and cannot operate like Ideal L series, which can have a business potential from 1 to 10 as soon as it is listed. However, within LI AUTO, the 0-to-1 phase of business validation of Ideal MEGA was mistakenly treated as a period of rapid development from 1 to 10, resulting in a miscalculation of the pure electric strategy pace. Li Xiang said that it will abandon the all-round sales strategy and focus on large retail centers in top cities for product experience and test drives, and accelerate the construction of supercharging stations in these cities.

Ideal MEGA is a key model of LI AUTO in 2024. It is the first pure electric vehicle and the first MPV model. It was released and listed on March 1, priced at 559,800 yuan, and officially delivered on March 11. In Li Xiang’s opinion, MEGA has the characteristics of a blockbuster and is expected to become the best-selling model in the full category above 500,000 yuan.

However, shortly after its listing, MEGA encountered a “crisis”. Some netizens P’d the word “funeral” and “new energy hearse” on the body of the MEGA, and some netizens found pictures of the MEGA parked side by side in the underground garage, adjusting the color to a strange style. The image of MEGA is easily associated with “funeral”, which will indeed make users hesitate and cause damage to the image of LI AUTO.

On March 11, Li Xiang posted on his Moments, first thanking the owners who still supported LI AUTO under these conditions, and regarding the smearing and slander of MEGA in the market, he believed it was an organized illegal and criminal act. LI AUTO decided to use legal weapons to fight against illegal acts and find the mastermind behind the scenes.

However, completely different from the previous style, since the MEGA was listed, LI AUTO has never disclosed the specific number of orders to the outside world. The market speculate that the order volume may not meet expectations. On March 19, LI AUTO announced the latest weekly sales (March 11-March 17) to the outside world. The long-awaited MEGA sales finally emerged. The weekly cumulative delivery was 1,058 vehicles, ranking sixth in the MPV market and third in the new energy MPV market. As a pure electric MPV with a price of up to 550,000 yuan, the weekly sales performance of MEGA is actually not bad. First, the high price means that the audience is limited, and coupled with the fact that pure electric MPVs are not easy to sell, the possibility of a big sale of MEGA is basically unlikely. Of course, if MEGA really catches fire, it would really be a subversive presence in the market. After all, even the sales contribution of the EV version of Denza D9, which is priced at 300,000 yuan, is only 5%.

From the sales list of new brands in the Chinese market, the sales of AITO are still higher than those of LI AUTO, with 8,694 vehicles for the former and 7,135 vehicles for the latter, and the sales gap between the two car companies is 1,500. Since 2024, LI AUTO has been surpassed by AITO, which has brought great sales pressure to LI AUTO. Data shows that the sales of L7 + L8 + L9 are still suppressed by M7, with 2,476 vehicles for L7, 2,147 vehicles for L9, and 1,453 vehicles for L8, while the sales of M7 are 7,076 vehicles.

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The new M7 of AITO, with the support of Huawei, has become the big boss in the new brand market. A single model directly chases after L9, L8, and L7. Before the facelift, the two models of AITO basically could not be sold, and the monthly sales of M7 were only a few hundred. The new M7 has upgraded the configuration while lowering the price by tens of thousands. Not only does it have an impact on the sales of the Ideal L series, but its own M5 can not be sold either. In addition, AITO M9 was also presold in December 2023. It received 30,000 orders after being listed for 7 months and started to be delivered at the end of February. The latest weekly delivery was 1,453 vehicles, which was overall not as good as L9 and was comparable to L8.

In the letter to all employees, Li Xiang also reflected on the issue that all employees paid too much attention to sales: “We are too focused on sales and competition from top to bottom, making desire surpass value, and significantly reducing our original user value and business efficiency. The pursuit of desire has made us become the people we hate.” To this end, LI AUTO will lower its expectations and desire for sales, return to healthy growth, return to the improvement of the most skilled user value, and return to the improvement of the most skilled business efficiency.

This evening, LI AUTO issued an announcement on the Hong Kong Stock Exchange, stating that due to the fact that sales orders are less than expected, the company now expects the vehicle deliveries in the first quarter of 2024 to be between 76,000 and 78,000. Previously, LI AUTO’s first-quarter delivery expectation was between 100,000 and 103,000 vehicles, with a total reduction of 24,000-22,000 vehicles.

It is understood that LI AUTO will challenge the sales of Mercedes-Benz, BMW, and Audi in the Chinese region in 2024, with an annual sales target of 800,000 vehicles. From the current results, it seems quite difficult for LI AUTO to achieve the delivery target of 800,000 vehicles. The first two months delivered 51,416 vehicles, and the target completion rate was 6%. The average monthly sales in the future need to reach more than 75,000 vehicles, and the downward adjustment of sales expectations may mean an adjustment of the 800,000 vehicle sales?

Before the US stock market, the stock price of LI AUTO fell by more than 9%.

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