I used to be a veteran auto reporter and a die-hard fan of fuel vehicles. I have always been skeptical of new car-making forces. Firstly, these new forces rely on private capital, and it is difficult to judge whether they are engaged in capital operations or genuinely building cars from the start. Secondly, new forces are often overly eager in their initial stages, and those selling PPTs seem as unreliable as those who used to "sell off-plan properties."
However, skepticism only represents a personal sentiment. The reality is that the development of new energy vehicles is quite rapid. According to data from the China Association of Automobile Manufacturers (CAAM), in the first half of 2021. global sales of new energy passenger vehicles reached 2.5468 million units (compared to 3.24 million units for the whole of 2020), accounting for 6.3% of the global automotive market.
The domestic new energy market is even more "full of spring." Data from the China Passenger Car Association (CPCA) shows that from January to July this year, domestic new energy vehicle sales totaled 1.339 million units, a year-on-year increase of 227.4%, accounting for 10% of the passenger car market.
The prosperity is not only in the market but also includes new force car companies, such as the standout "Three Musketeers" — Weilai, Xiaopeng, and Li Auto. Interestingly, Li Auto’s development approach is entirely different from that of NIO and Xpeng. It has chosen the extended-range electric vehicle as its breakthrough, and remarkably, with the Li ONE, the extended-range electric vehicle, which was once sidelined, has regained popularity.
Why did Li Auto choose the extended-range electric vehicle as its initial development model? At the Chengdu Auto Show, I had an in-depth discussion with Liu Jie, Vice President of Sales and Service at Li Auto.
The "God's Eye View" of Li ONE
Like many people, I couldn’t understand why Li Auto started with the extended-range electric vehicle, the Li ONE, and only offered one model initially.
“It’s not about the technical route that led us to choose the Li ONE, but about the users. Creating a ‘mobile home’ was Li Auto’s original aspiration. In 2023. we will also launch a super high-voltage pure electric vehicle, but the original intention of ‘home’ will not change,” Liu Jie revealed.
Liu Jie explained, “The key needs of a 300.000 RMB family user are to avoid range anxiety and to provide a more comfortable experience for the whole family. Therefore, we chose the Li ONE, which has a combined range of 1080 kilometers. In 60% of urban driving scenarios, it can operate purely on electricity.”
The market has rewarded Li Auto’s “God's eye view.” By August 31. 2021. Li ONE had delivered a cumulative total of 81.773 units. In the first eight months of this year, new car deliveries reached 48.176 units, far surpassing NIO and Xpeng. Notably, August’s delivery volume set a record, reaching 9.433 units, a staggering year-on-year increase of 248%.
Data is one aspect, but actual user experience is another. I had previously experienced the four-screen delivery and voice control of the Li ONE, which was indeed more user-friendly than traditional car systems. For example, movies playing on the passenger entertainment screen can be directly cast to the central control screen for family sharing; or, when you say “I want to rest,” after selecting the duration, the driver's seat automatically reclines, and the screen turns off... Such extreme, scenario-based experiences reflect the software engineers’ understanding of “mobile home”—it’s not designed solely for the driver but for the entire family.
Liu Jie shared a convincing statistic: each Li ONE user spends an average of 4 hours per week in the car when it is not in use, indicating that many users are treating the vehicle as a “third space.”
“Next, the family smart cockpit of the Li ONE will continue to evolve. Recently, in early September, we will implement a new OTA upgrade that changes the command-style instruction ‘Li Auto, please XXX’ to a free conversation across four audio zones in the car. The dad in the front seat and the son in the back seat can freely converse,” Liu Jie said.
Hearing this, I felt a surge of excitement. Although traditional car manufacturers have been trying hard to learn from the internet user mentality and please the "gods," they are still quite traditional compared to new forces. Taking the Li ONE as an example, its impact on users’ families spans its entire lifecycle, with user feedback and suggestions taking precedence. To listen to users’ most genuine opinions, their engineers even dive into user groups, listen to complaints, and address pain points with each OTA update. This high user engagement ceiling is something traditional car companies might struggle to achieve in a short time.
Li Auto’s Commitment to Direct Sales
In Li Auto’s view, staying connected with “God” requires a few essential scenarios: retail, delivery, and maintenance. Therefore, it has firmly chosen a direct sales model similar to Starbucks and Lianjia.
According to Liu Jie, as of August 31 this year, Li Auto has 114 retail centers nationwide, covering 69 cities. The number of after-sales maintenance centers and authorized sheet metal and spray centers has reached 194. covering 143 cities. By the end of the year, Li Auto plans to build 40 large maintenance centers, and its maintenance service network will extend to 200 cities.
For users, the advantages of a direct sales model are evident. Firstly, all the deceitful tactics of traditional 4S shops are eliminated, naturally improving user experience. Secondly, stores are the most important touchpoints for car companies to gather user feedback. If a user expresses dissatisfaction, the company will react swiftly, and soon the user will enjoy the “divine” treatment.
However, for car companies, the pressure is visible. Aside from the absence of intermediaries, the initial investment is significant. More importantly, as the scale grows and the number of stores increases, it poses a soul-searching challenge for new forces that are more adept at online operations but lack practical offline service systems.
Liu Jie acknowledged the “pressure and difficulties” but emphasized, “Li Auto will stick to the direct sales model.” He said, “In the future, Li Auto will focus on three things: first, learning from Lianjia, recruiting and training excellent partners and managers, and establishing a more systematic management system; second, continuously iterating service standards based on user feedback. Users may tolerate us in the beginning but will not do so forever; third, developing smarter management systems to enable partners to work more efficiently through data training.”
As Liu Jie mentioned, adhering to direct sales poses many challenges and risks in the internet-driven public opinion environment. Yet, I remain optimistic about its future because being “closest to the user” is the essence of internet user thinking.
Final Thoughts
Frankly, before closely interacting with Li Auto, I had a prejudice against “new forces,” a sentiment I believe many colleagues share.
But if we set aside our biases and reflect on their existence, we must acknowledge the positive contributions of new forces to the industry, such as new user thinking and new retail models. Just as Li Auto insists on direct sales and one car model, one configuration, one price, their fearless and innovative approach, diverging from traditional paths, has accelerated marketization in the new energy sector and allowed the Chinese automotive industry to rapidly switch tracks.
Of course, compared to traditional car manufacturers, new forces have their inherent shortcomings, such as stronger capital control, less mature manufacturing and management systems, and even representing examples of reckless prosperity and false growth. But all these will be assessed by the industry’s development, either improved, refined, or eliminated.
For us, who are in the midst of it, it is worth looking at their growth with a rational perspective.
