Chinese electric vehicle maker Li Auto recently marked a significant milestone, celebrating the roll-off of the 200,000th unit of its flagship SUV, the Li L9. This achievement is part of the company’s broader success, having sold 800,000 vehicles across its entire lineup. Taking advantage of this momentous occasion, 36Kr sat down with Tang Jing, the manager of Li Auto’s first product line, to discuss market competition and the company’s future.
Tang emphasized that product value is the cornerstone of Li Auto’s design philosophy, deeply rooted in the concept of user value. The L9, introduced two years ago, exemplifies this commitment. Launched in June 2022, the L9 was priced at RMB 459,800 (USD 63,665), a decision that sparked considerable debate within the company. CEO Li Xiang disclosed that when launching the second product, they had three choices: an alternative to the Li One, a cheaper model, or a higher-end model. Ultimately, they opted for the latter.
Reflecting on the Li One’s success, Tang noted that it carved out a new market segment above RMB 300,000 (USD 41,540), achieving monthly sales of 20,000 units. Despite this, user feedback highlighted persistent issues, such as the lack of screens for the co-pilot and second-row seats. The L9 was designed to address these pain points, featuring a refrigerator, a large television, and a spacious sofa—elements that quickly resonated with family users. Subsequent models, the L8, L7, and L6, inherited these design elements and product definitions.
One unexpected discovery was the strong demand for practical in-car refrigerators. Previously, in-car refrigerators were either used for storing champagne or placed in the trunk, powered by the engine and ceasing to function once the engine was off. Li Auto’s solution was to embed a compressor under the L9’s armrest, enhancing the refrigerator’s practicality. “With a large battery, many scenarios can be served. For example, if you buy ice cream and dumplings at Sam’s Club and drive for tens of kilometers, they won’t melt,” Tang explained.
However, some critics argue that features like a refrigerator, television, or large sofa seem incongruent with the high-tech attributes of smart cars. Tang acknowledged the challenge of balancing space and noise in creating a functional in-car refrigerator but highlighted the 2024 models of the L8, L7, and L6, which now offer this feature. This evolution underscores the importance of challenging industry norms to create flagship products.
Currently, Li Auto’s flagship model faces stiff competition. In December last year, the Aito M9 entered the market, quickly amassing 100,000 orders, with June sales surpassing 17,000 units. In contrast, the Li L9’s sales have not exceeded 10,000 units. Moreover, the M9’s average order price of RMB 550,000 (USD 76,155) is higher than the Li L9, which has a maximum price of RMB 439,800 (USD 60,895) after the 2024 price cuts.
Tang remains unphased by the competition, asserting that both the Li L9 and the Aito M9 have unique advantages. He believes the ultimate deciding factor will be each car’s intelligent performance. In terms of intelligent driving, Tang expects Li Auto to be on par with Huawei, advancing side by side.
Tang added that the industry’s competition would ultimately hinge on user value, not just technology. “Users want safer, more comfortable, more convenient, and more refined products, not just cool technical parameters.” Li also emphasized that Li Auto’s greatest strength lies in its products. “If technology cannot be turned into products, it is meaningless. When people talk about Apple, they are actually talking about products and experience. In the long run, we are the company most like Apple, and also the company in the automotive industry most like Apple.”
The insights above were derived from an interview conducted by 36Kr with Tang. The following transcript is a translation of that interview and has been edited and consolidated for brevity and clarity.
36Kr: Starting from the L9, Li Auto has made the refrigerator, television, and sofa the core features of the L-series models. How were these initially selected?
Tang Jing (TJ): This goes back to the Li One. The Li One created a new category in the market above RMB 300,000, but there were still pain points. For the L9, we wanted to address the issues that users were not satisfied with, such as video watching for the co-pilot and the sofa experience. Essentially, the L9 extended the features of the Li One.
The refrigerator was a product of user demand. From an R&D perspective, no in-car refrigerator on the market before the L9 was successful. They were either for showing off by storing champagne in high-end models for taking pictures, or they were placed in the trunk and stopped working once the engine was turned off.
With a large battery, many scenarios can be powered. For example, if I buy ice cream and dumplings at Sam’s Club and drive for tens of kilometers, they won’t melt. This is a genuine user need and a product value that emerged as cars transitioned from the fuel era to the electric era.
36Kr: Some external parties argue that features like refrigerators, televisions, and sofas do not have high technical value. What is your view on this?
TJ: This is actually the true value of a product manager. Is there no technical difficulty with the refrigerator? There is. It needs to be made in a very small space. Before the L9, no one in China had used a compressor-based refrigerator in a car. The core is the compressor technology. We wanted the refrigerator under the armrest, and solving the noise issue inside the car was really challenging. The person in charge spent a month and a half in Guangdong to solve this problem.
It was also the first time our supplier made a compressor this small. The supplier used to focus on after-sales services for German car companies, without needing to worry about noise issues. They didn’t know how to do it, but we instructed them, and now they are the industry benchmark.
Originally, the refrigerator was installed only on the L9. The old L8 didn’t have a refrigerator because the wheelbase was short. If a refrigerator was added, the aisle in the second row couldn’t fit a size 42 shoe—this is the space most people need to pass through freely. So, for the 2024 models, we managed to make a very small compressor that cools quickly, is quiet, and is cheaper, allowing the new L8, L7, and L6 to have refrigerators.
36Kr: Compared with technologies like motors with tens of thousands of RPM, doesn’t a refrigerator seem less cool?
TJ: For some technologies, it’s hard to say whether the greater contribution comes from the car manufacturer or the parts supplier. If the supplier has something ready, we use it. But if it’s something new and the supplier doesn’t have the capability, the car manufacturer’s technology becomes crucial.
In technology integration, the car manufacturer plays an absolutely essential role. For example, the industry is discussing 2000 MPa steel, but can using 2000 MPa steel alone solve safety issues? If that were the case, you would only need material developers, not vehicle engineers, or billions spent annually on crash testing.
36Kr: Some users feel that the Li Mega and L9’s interiors look similar, and there aren’t many new features?
TJ: We have thought carefully about this issue. I believe the interior layout of the L9 has reached its peak. For example, the two 50W wireless charging pads on the armrest must be in their current positions, away from sunlight, and easily visible to the driver.
The positions of the two cup holders cannot be moved back or forward. Theoretically, they could be, but they would be too close to the phone, and if there is water, it might spill. Some cars have one large and one small cup holder, but if we did that, I think Li Xiang would fire me the next day.
Previously, the air conditioning panel had buttons, but in the 2024 models, it’s all screens because children were getting hurt by the panel buttons. We spent a lot of money to change it, and now there are no sharp edges in the car. The L9’s layout is already perfect—the only thing that can be changed is the color scheme. However, we also thought that we shouldn’t change just for the sake of change.
36Kr: Will the success of extended-range products put pressure on pure electric products?
TJ: The Li Mega is indeed under a lot of pressure, and pure electric is still in the 0–1 stage. We’ve discovered that in places like Shanghai and Jiangsu-Zhejiang, users view pure electric and extended-range vehicles as two options: one with a large battery and the other with an engine, similar to choosing between gasoline and diesel. However, in the northeast and northwest regions, users see them as different products.
This year, we will have over 2,000 charging stations, and once the rollout is complete, we will have the most comprehensive charging network in China.
Caption: Image of the Li Mega vehicle model. Image source: Li Auto.
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36Kr: Li Auto’s R&D expenses in the first quarter were RMB 3 billion (USD 470 million). Where were these funds allocated toward?
TJ: When I first joined the product line, I found it quite challenging to adapt. Projects costing hundreds of thousands of RMB had to undergo lengthy reviews, whereas in the R&D department, only projects over RMB 1 million (USD 138,465) needed to be reviewed by the VP. Changing a mold can cost between RMB 5 million (USD 692,320) and RMB 8 million (USD 1.1 million)—it never felt like a lot of money.
There’s also the case of flattening the air conditioning panel buttons. At that time, I was conflicted about the necessity because the logic was the same as Mercedes-Benz—there was no need to make a significant change. However, considering child safety, Li Xiang insisted on removing it. Ultimately, we changed the entire panel frame and mold, which was very expensive.
Li Xiang is very supportive of product development costs, which can run into the tens of millions, but he is very strict about marketing expenses, with projects over RMB 50,000 (USD 6,925) requiring his personal approval.
36Kr: As CEO, Li demands change for the better, but are there bottom-up demands for change as well?
TJ: The most classic case is that we are probably the only car company in China with all models supporting rollover-triggered airbags, regardless of the model or trim. Previously, only luxury models like the BMW X7, Mercedes-Benz GLS, Bentley, and Rolls-Royce had this function. At that time, we learned that the airbag controllers supporting rollover triggering were not yet mass-produced in China.
One day, an engineer asked me if we should have rollover-triggered airbags like Bentley and Rolls-Royce. I said, of course. Previously, many sensors in the car couldn’t recognize rollovers, but we pushed the supplier to develop rollover airbags with multi-channel monitoring in China. A single part costs about RMB 200 (USD 27.7), but multiplying that by the production volume, it adds up to a lot. For 200,000 units of the L9, that’s RMB 40 million (USD 5.5 million). The main thing is that all the rollover monitoring software had to be redone, and the testing was also expensive. Each car itself costs millions, and one test is RMB 300,000. Three cars add up to over RMB 1.5 million (USD 207,695).
We also added side airbags for the second-row seats. Previously, there were only curtains, which could only protect the upper body. We are likely the first company in China to add side airbags for all second-row seats, regardless of model or trim.
I was scolded by Li Xiang several times before. Once, he jokingly said that, when faced with the choice of whether to do the co-pilot test, the industry standard was only to test the driver’s seat. My idea was not to do the co-pilot test. Then Li Xiang jokingly said, “Do you have a bad relationship with your wife because the co-pilot is usually the wife?” This gave me great inspiration. All safety features that can be done should be done. Starting from April this year, the CIRI Auto Technology Institute has made the co-pilot test an industry standard.
36Kr: The Aito M9 is a competitor to the Li L9. How do you view the current competition?
TJ: The refrigerator, television, and spacious sofa are our competitive advantages. However, everyone’s home is different. There are RMB 1,000 refrigerators and RMB 10,000 refrigerators, and the user experiences differ. The L9 and M9 each have their unique strengths. For instance, the L9 boasts dual-chamber air suspension, while the M9 features the Turing chassis. The M9’s HUD is large, but the L9’s HUD is exceptionally clear in many aspects. As a family car, the L9 is absolutely top-notch.
Where is the winning point? In my understanding, in terms of intelligent driving, we and Huawei are likely to be in a “Southern Murong, Northern Qiaofeng” situation, advancing side by side.
Our disadvantage is that our brand is very young. I want to persuade Li Xiang to invest in the product line and in conveying user value. Li Xiang’s approach is to gradually guide users through our products.
36Kr: You are mainly responsible for Li Auto’s flagship product line. What directions will future flagship models take? Can we expect more technological advancements?
TJ: I come from an R&D background, and my understanding of technology is that when a need arises, whether from users or from Li Xiang, I first assume the need is reasonable, even if it seems unbelievable. By approaching problems with a positive mindset, we can achieve 80% of 100 needs. With effort, we can achieve 90%, and with even more effort, we can reach 96%. This mindset allows us to lead the industry with flagship models.
For example, before the L9, extended-range vehicles all had large air intakes, while pure EVs did not. The Li One also had a large air inlet, but for the L9, we designed an electric air inlet, folding it under the ring light—something no one in the industry had done before. One day, Li Xiang pointed out that the electric air inlet was allowing sand and leaves to enter, causing issues, and asked if we could remove it and keep only the air inlet under the license plate.
The R&D team’s first reaction was that it couldn’t be done because no one in the industry had attempted it. But I told the team to first assume Li Xiang’s demand was reasonable and figure out how to achieve it. We brought together experts in thermal management, interior, exterior, styling, collision, noise, vibration, and harshness (NVH), and we were the first in the industry to solve this problem.
Li Xiang himself made a significant contribution. First, he proposed a demand that seemed unbelievable at the time. Second, it was crucial to move the millimeter-wave radar under the license plate. Bosch initially disagreed, but Li Xiang personally negotiated with them, which was rare but critical. Challenging industry norms is essential for creating flagship products.
Innovation in flagship products also requires a deep understanding of technology. The final competition may not be about individual pieces of technology but about user value. Users want safer, more comfortable, more convenient, and more refined products, not just those with impressive technical parameters.
Current communication often falls into parameter competition. Parameters are the easiest to choose but also the easiest to surpass. Competing on parameters offers no real advantage. The ultimate core competitiveness lies in the user experience.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Li Anqi for 36Kr.