Episode three of a ten-part series with which heise/Autos takes a look at the Chinese car market. There, Chinese electric car manufacturers are warming up – partly with strong support from the so-called Communist Party – in order to soon roll up the domestic and international markets with a lot of momentum and a colorful bouquet of the most modern cars. This should not remain without consequences for the German car manufacturers, whose largest single global market has been China for several years.
On the one hand, this will foreseeably change the picture on German and European roads, but will also have an impact on German producers and their sales in China, the world’s largest single market.
Of three prestige electric car brands in China – Nio, Xpeng and Li Auto – Li Auto slipped into the role of the problem child in 2022. In August 2022, the company sold just 4571 cars. The Chinese newspapers focus very much on these numbers. At the beginning of each month, the sales of the three manufacturers from the previous month are compared very precisely. Sometimes just four weeks pass between jubilant arias and the mood of the end of the world.
Li Auto differs from the competition because the manufacturer relies on a range extender. In an emergency, the large battery is kept alive by a small petrol engine. The brand thus appeals to different customers than Xpeng and Nio. However, the collapsing sales figures had no technical background. The portfolio was just tiny for a long time. In fact, it consisted only of the Li One. A large SUV that has been delivered since April 2020.
Number 1: An SUV with a hybrid drive
The Li One costs the equivalent of around 45,000 euros. To be able to classify the price: A BMW X5 in China starts at 82,000 euros, an Audi Q5 costs around 55,000 euros. In the Li One, two electric motors (100 and 140 kW) guarantee propulsion, a 1.2-liter three-cylinder supplies the battery, which alone only allows a range of 180 kilometers. After two and a half years on the market, the model ran out of steam.
The chassis with the combustion engine.
Special feature of range extenders
The L9 drove sales figures up again. This is the brand’s new flagship, a luxurious full-size SUV. The technology is similar to that of the Li One. Two electric motors (125 and 200 kW) drive the car, a four-cylinder petrol engine fills the battery. The car would travel 215 kilometers purely electrically. If the battery is charged and the tank is full, it should be around 1300 kilometers, at least says Li Auto. Cost point: 63,000 euros. The vehicle was hardly available when sales climbed to 11,531 cars. An increase of 152 percent compared to the previous month.
Li Auto entered the market with the Li One.
German competition left behind
The Germans are not a big competitor because they are too expensive: The comparable BMW X7 and Mercedes GLS cost between 168,000 and 190,000 euros. Chinese customers are no longer willing to pay such a surcharge just to drive a German car. Especially since the Chinese manufacturers have long been leaders in many areas of electromobility.
Tesla takes these issues seriously. In October 2022, the American manufacturer reduced its prices for the Model 3 by five percent (to the equivalent of 36,000 euros). The Model Y was nine percent cheaper (now available in China from the equivalent of 43,000 euros). Mercedes also significantly reduced the prices for the two electric cars EQE and EQS in China.
The L8 is to become the final sales booster for Li Auto. He’s not going to reinvent the wheel either. Two electric motors, a range extender, a range of 1300 kilometers. But somewhat more reserved dimensions. From November, the slightly smaller SUV should be available from 54,000 euros.
The L8 relies on the same technology as the L9, but is somewhat more modest in size – also in terms of price. The company hopes to get the necessary quantities from him.
Diligent money collectors
The fact that Li Auto has the means at all to bring new models onto the market at such a pace – after only one SUV had to fly the flag for years – is due to its IPO. In the summer of 2020, the corona pandemic and a trade war between the USA and China raged. Nevertheless, the automaker managed to collect 1.2 billion US dollars on the stock exchange during this phase. The fact that the umbrella company is officially based in the Cayman Islands does not seem to bother investors and shareholders. The Hong Kong IPO in 2021 raised another 1.7 billion euros.
The money should enable very ambitious goals. In 2021, Li Auto was able to sell just 90,500 vehicles. In 2022 it should have been around 120,000 cars. According to older plans, this year there should be 2.2 million units. A utopian plan. But at least it shows that Li Auto wants to aim high and can be dangerous for German manufacturers.
Make money from subscriptions
Like the other large electric car manufacturers in China, Li Auto is also focusing on making money with digitalization. The software of the cars, the artificial intelligence of the driver assistance systems and entertainment apps are considered the core competence of the brand. For example, Li Auto offers a premium subscription that includes various service packages, streaming services and other applications for the vehicle. “Li Auto’s top priority is to become a leader in autonomous driving technologies and contribute to building an electric vehicle ecosystem that can drive the future of e-mobility,” said Mingming Huang, one of the shareholders, at IPO in New York.
(fpi)
