Li Auto launches a full-scale attack on BBA

Author | Chai Xuchen

Editor | Wang Xiaojun

There is only one month left until the end of 2024, and Li Auto has initiated a year-end showdown in the luxury car market.

On November 29, Li Auto announced a 3-year interest-free policy for all its models, lowering the purchase threshold to a minimum. Among them, the entry-level L6 requires a down payment of less than 70,000 yuan, while the flagship MPV MEGA requires a down payment of less than 160,000 yuan. This policy will last until December 31 of this year.

Liu Jie, President of Li Auto's product line, stated that this interest-free policy was jointly launched with partner banks; if users need a 5-year long loan, Li Auto also offers a low-interest option (0.99%), "with rates less than half of the market financial options."

This means that a monthly payment of 3,000 to 5,000 yuan can get you an L6, and 6,000 to 10,000 yuan can bring home a MEGA. For salaried families who are still on the fence, this is indeed tempting.

This is Li Auto's strategic move to consolidate its share in the high-end market. Under the surface, a full-scale attack against BBA has quietly begun.

In the first half of the year, due to the MEGA incident, Li Auto's market share in the 200,000 yuan+ segment, which it values most, fell below 16% at the end of last year. Fortunately, with the volume of L6 and the push for intelligent driving, it rebounded to 17.3% in the third quarter.

Data shows that with the increase in L series sales, Li Auto has maintained its position as the sales champion of Chinese brand cars priced above 200,000 yuan for 31 consecutive weeks. Currently, the L6 has surpassed the mainstays of BBA such as the Mercedes-Benz C-Class, BMW 3 Series, and Audi Q5. Driven by this sales champion, in the third quarter, Li Auto's sales in the price segment above 200,000 yuan exceeded those of Audi and BMW.

This is a critical moment for domestic brands to break the traditional competitive landscape of the luxury car market. Currently, Li Auto has just crossed the one million sales mark, and whether it can stabilize its growth and sprint for the second million will test its capabilities in the luxury market.

However, Li Auto has also entered a product gap period at the end of the year and the market's off-season for sales. To ensure it can maintain an upward trend and smoothly transition to next year's pure electric models, it must show more sincerity to the market.

Before this round of discount policies, Li Auto was already looking for incremental growth to further penetrate the high-end market.

Meng Qingpeng, Vice President of Li Auto's supply chain, revealed that from the end of this year to early next year, Li Auto will continue to unleash the potential of the L6, aiming for a monthly sales target of 30,000 units; on the other hand, Li Auto has finally decided to catch up with this round of external expansion opportunities and established an overseas department at the end of October this year, currently targeting the Middle East and Latin American markets.

Beyond products, Li Auto is also actively refining its intelligent driving features. Recently, with the implementation of end-to-end + VLM large model, Li Auto's intelligent driving experience has rapidly improved, consequently driving the sales growth of high-spec, high-margin AD Max models across various series.

Behind a series of initiatives is Li Auto's urgent desire to secure its position in the endgame.

Insiders at Li Auto candidly stated that the company's goal is to capture 25% of the market above 200,000 yuan. Meng Qingpeng pointed out that the annual sales in the domestic market above 200,000 yuan is over 6 million units, corresponding to a quarter market share of 1.5 million units. The three BBA brands together account for about 2.3 million units, with an average annual sales of 773,000 units last year Currently, Li Auto has the capability to sell approximately 600,000 new cars annually. If it continues its current momentum and aggressively launches its pure electric series next year, fully surpassing BBA may not be far off.

However, industry insiders believe that the competition and price wars in the automotive market will intensify next year. Competitors such as Huawei, Xiaomi, and Nio are already eyeing the market, while brands like Avita and IM Motors are also preparing to enter the extended-range segment. Even joint ventures like Volkswagen, BMW, and Mercedes-Benz are brewing multiple new products, ready to launch a comprehensive battle in the coming years.

Zhang Xiao, head of Li Auto's product line, has mentioned that before 2030, Li Auto aims to capture a 30% share of the domestic market above 200,000 yuan, corresponding to a scale of over 2 million. By then, Li Auto could become one of the few leading winners, remaining at the final table of the luxury car market.

This remains a significant challenge for Li Auto, which has just crossed the million scale. In the future, beyond surpassing BBA, it still needs to compete with its rivals to secure a limited number of seats at the final table, which also means that its upcoming pure electric series next year must not fail.

For Li Auto, next year will be a crucial moment in determining whether it can become a "luxury giant" and maintain its position as the king of domestic luxury cars