Li Xiang: This Year Is a Key Year for Ideal Evolution Into an Embodied Intelligence Enterprise, with Sales Target Growth Exceeding 20%

“Last year was a significant period of strategic adjustment for Li Auto.” On March 12, Li Xiang, Chairman and CEO of Li Auto, revealed during the earnings call that by 2026, the company’s sales target is to achieve over 20% year-over-year growth (sales exceeding 488,000 units).

In Li Xiang’s view, the overall growth in the automotive market in 2026 will be limited, but competition in the mid-to-high-end new energy vehicle segment above 200,000 yuan is fierce, with new car launches even matching the total of the past three years. How to achieve over 20% growth in such a challenging environment? He proposed a solution called “3+2.”

He explained, “The three core strategies” include: 1. Managing the sales system effectively; 2. Launching the new generation of the L series, led by the all-new Li L9; 3. Steady volume growth of pure electric models, including Li i6, Li i8, Li MEGA, and the upcoming Li i9 in the second half of the year. The “two supporting strategies” are intelligentization and international expansion.

On March 12, Li Auto announced its Q4 and full-year 2025 financial results. The report showed that in Q4 2025, Li Auto achieved revenue of 28.775 billion yuan, down 35% year-over-year but up 5.2% quarter-over-quarter; net profit attributable to ordinary shareholders was 20.2 million yuan, down 99.4% YoY. For the full year, Li Auto’s revenue was 112.312 billion yuan, down 22.3% YoY; net profit attributable to ordinary shareholders was 1.139 billion yuan, down 85.8%.

“Ensuring the company’s delivery volume remains stable at the top tier of high-end vehicles from a sales capability perspective”

In terms of sales, Li Xiang pointed out that the company’s biggest problem in the past was managing the direct sales system through a dealership model.

Since Q3 last year, the company has focused on how to sell cars well through its direct sales system, emphasizing high-quality store openings, store management, store manager incentives, and team empowerment training, all driven by sales volume and per capita output, implementing a series of reforms:

1. Optimizing division of labor and personnel concentration by replacing and relocating stores, moving sales efforts from declining secondary shopping malls to core commercial districts and auto cities, directly improving store efficiency and per capita output.

2. Innovating mechanisms to activate frontline stores. In March this year, the company launched the Store Partner Program, where excellent store managers have decision-making and profit-sharing rights, transforming from traditional managers to store operators.

During the earnings call, Li Auto President Ma Donghui denied rumors of closing over 100 sales stores in 2025. He said, “Li Auto has always adjusted and optimized a small number of inefficient stores that cannot support sales targets. This is mainly to address issues like poor store location choices and declining traffic in commercial areas, which is normal business optimization.”

Ma Donghui stated that this year’s channel layout will focus more on quality than quantity. The company expects to see significant improvements in sales and operational capabilities by Q3.

“Under the current environment where most auto sales systems are unprofitable, we aim to cultivate a large number of store managers earning over a million yuan annually, with top managers earning two to three times the industry average; and from a sales capability perspective, ensure the company’s order volume and delivery remain in the top tier of high-end vehicles,” Li Xiang said.

“Making pure electric products truly establish a foothold in the market”

In terms of products, Li Auto will officially launch the new Li L9 series in Q2 this year. This model is highly anticipated.

“With a comprehensive upgrade in the powertrain, intelligent driving, and chassis technology, we aim to create a significant ‘experience gap’ with competitors and regain our leading position in flagship SUVs,” Li Xiang said.

According to the company, the top-tier Livis version of the Li L9 embodies Li Auto’s deep thinking on a flagship SUV with embodied intelligence, priced at 559,800 yuan. Notably, the Li L9 Livis will be equipped with two automotive-grade 5nm Li Auto self-developed Mach 100 chips, which the company claims have effective computing power five to six times that of NVIDIA Thor-U, and are better adapted through data flow architecture and self-developed intelligent driving systems—truly achieving integrated self-developed algorithms and hardware/software.

“The success of the Li L9’s upgrade will directly determine the market ceiling of the entire L series. If the previous Li L9’s competitiveness mainly came from precise product definition, the new generation will build core technological barriers,” Li Xiang commented.

In 2025, Li Auto’s sales did not meet market expectations. The full-year sales were 406,300 units, down 19.3% YoY. Transitioning from extended-range models to pure electric and dual-track powertrains presents phase-specific challenges, including channel adjustments, user acceptance, and supply chain adaptation.

Li Xiang mentioned that the company’s pure electric models are continuing to ramp up. First, through ongoing efforts with suppliers, the supply issues for the Li i6 are gradually being resolved, and capacity will continue to increase. Meanwhile, as owners’ mileage increases, positive feedback and satisfaction are driving orders and sales of the Li i8 to rebound. Since March, orders for the Li i8 have more than doubled compared to January.

Li Xiang stated, “The Li i6 and Li i8 together solidify Li Auto’s market foundation for pure electric products. Our goal is to fully resolve previous issues so that our pure electric models can truly establish a foothold in the market. Additionally, looking back at last year, after its launch, the Li i6 faced multiple challenges such as initial sales policies, capacity ramp-up, and the phase-out of purchase tax subsidies, which pressured its gross margin. However, this also leaves enough room for gross margin improvement this year.”

In the second half of 2026, Li Auto will launch a new pure electric flagship SUV, the Li i9, further expanding its electric vehicle lineup.

“Completing the transition to embodied intelligence to establish a competitive advantage in the next phase”

Li Xiang defined 2026 as “the key year for Li Auto to evolve into an embodied intelligence company.”

“Faced with increasing competition in the new energy vehicle market, we will focus on raising our technological moat and completing the transition from smart electric vehicles to an embodied intelligence enterprise to establish a competitive advantage in the next stage. In 2025, our R&D investment reached 11.3 billion yuan, with 50% allocated to AI-related projects. We will continue this investment strategy in 2026 to further strengthen our core capabilities in embodied intelligence,” Li Xiang said.

He believes that for Li Auto, AI mainly involves two aspects: one is creating AI, and the other is how to use AI. Creating AI means endowing products with life; using AI means improving work efficiency.

He mentioned that in creating AI, the company has completely restructured its R&D organization to operate as an embodied intelligence company. Building products is akin to creating humans, and in areas like inference chips, foundational models, software, and hardware, the company is developing capabilities and cultivating top talent. From a product perspective, cars are viewed as intelligent entities with vitality, and AI is key to giving products vitality. At the efficiency level, AI is reversing the decline in information flow and decision-making efficiency caused by company scale expansion.

In January this year, Li Auto underwent a major organizational restructuring. The R&D team shifted from department divisions based on hardware and software functions to a new structure focused on “creating digital humans and silicon-based humans.”