Li Auto is reorganizing its sales and service division as it gears up to hit an ambitious annual target: selling 700,000 vehicles in 2024.
According to internal information reviewed by 36Kr, the company recently introduced major structural changes across its sales and services unit. This division—which covers retail, after-sales service, charging infrastructure, quality control, and overseas business—now reports directly to Zou Liangjun, senior vice president of sales and services.
One key change involves a shift to a “warzone” sales model. Li Auto has consolidated its original 26 provincial-level sales regions into five zones: east, west, south, north, and central. “Each of these zones is now accountable for its own sales volume, profitability, and net promoter score (NPS),” said a source familiar with the matter.
Each of the five zones reports directly to Zou, eliminating the position of a centralized retail head.
Han Xi, who previously served as vice president of sales and led the retail business, now oversees the central retail zone. “The company is trying to flatten management and encourage internal competition,” one insider said.
An internal memo seen by 36Kr confirmed the changes. In a written statement, Li Auto said the overhaul is intended to enhance the customer experience across the entire vehicle ownership lifecycle. The company referenced Apple and other global firms as inspiration for this decentralized model, which blends regional autonomy with centralized support.
“By pushing decision-making power to the five zones, we can quickly respond to localized user needs. Headquarters will focus on digital infrastructure, training, and maintaining consistent service standards,” the company said. It also noted that many of the newly appointed zone managers had gained experience during last year’s move to provincial-level management—a shift that emphasized localized decision-making.
Sales and services is one of four core business units at Li Auto, alongside product and strategy, R&D and supply, and organization and finance. Each unit is helmed by a senior executive: CEO Li Xiang oversees product and strategy; Zou leads sales and services; Ma Donghui manages R&D and supply; and Li Tie heads organization and finance.
Until now, the sales division has seen relatively few leadership changes. Zou, who joined in 2023, previously led Huawei’s terminal business in Italy and later handled international sales for Honor. He brought with him a playbook from Huawei, including the establishment of 26 provincial “warzones”—a structure that Li Xiang credited with driving sales last year.
In 2025, the company’s road ahead looks no less challenging.
Li Auto aims to sell 700,000 vehicles this year, including 600,000 extended-range electric vehicles (EREVs), with the rest coming from overseas markets. The company is preparing to officially enter regions like the Middle East and Central Asia, where parallel vehicle imports are already prevalent. For context, Xpeng Motors has set a much smaller overseas target of 40,000 units in 2024.
A source familiar with the matter noted that the five-zone model will help concentrate sales resources. “Previously, all 26 ‘warzones’ had to coordinate directly with the central marketing team. Now, there are only five lines of communication,” the person said.
The timing of the overhaul also aligns with Li Auto’s upcoming entry into the battery electric vehicle (BEV) market. On its March earnings call, CEO Li Xiang said the company would launch two all-electric SUVs this year: the six-seat Li L8 in July, followed by the five-seat Li L6 later in 2024.
These BEVs won’t just contend with competitors like the Aito M8, Xiaomi’s YU7, and Tesla’s refreshed Model Y—they will also compete with Li Auto’s own EREV lineup. Managing that overlap will be a key challenge.
In a recent media interview, Zou said that China’s regional diversity makes room for both EREVs and BEVs. He suggested that the new structure is designed to cater to these varied needs.
“Phones don’t have regional preferences—people in the north and the south use the same ones. But with cars, regional distinctions matter a lot,” one industry observer said. Consumers in northern China typically lean toward EREVs, while buyers in the south are more open to fully electric vehicles.
Li Auto adopted a similar regional strategy after its first BEV, the Li Mega, drew a lukewarm reception. In cities with low EV adoption, the company pulled the model from showrooms and redirected it to tier-one and tier-two cities. “In some tier-four and tier-five cities, RMB 600,000 (USD 84,000) could buy you a house,” one observer quipped.
Now, the company’s balancing act has expanded—from managing one flagship BEV to maintaining two full lineups.
Li Auto’s approach to sales has long mirrored its broader business strategy. In 2023, it delivered nearly 380,000 vehicles, outperforming several newer players. That success fueled an aggressive 2024 target of 800,000 vehicles and 800 retail locations.
To support that growth, Zou created a dedicated retail go-to-market team and transitioned to a decentralized sales model by dividing the country into 26 units. But after the underwhelming launch of the Li Mega, Li Auto slashed its annual target to 500,000 units and paused store expansion. It also merged its retail and delivery teams to cut costs and streamline operations.
The new five-zone model aims to strike a balance: empowering local leaders while preserving flexibility in sales strategies across regions.
In 2023, Li Auto sold close to 500,000 EREVs—a number it hopes to match this year. By May, all four EREV models will receive smart driving upgrades. The AD Max version will swap its dual Nvidia Orin X chips for a single Thor-U chip, enabling the next-generation vision-language-action (VLA) platform. Meanwhile, the AD Pro system will transition from the Horizon Journey 5 chip to the J6M chip and add light detection and ranging (LiDAR) capabilities, narrowing the gap between Pro and Max.
The vehicles’ design, electric drive systems, and batteries will remain unchanged.
To drive sales, Li Auto is ramping up efforts on multiple fronts: expanding its fast-charging network to 4,000 stations by year-end, pushing into tier-four and tier-five cities, and accelerating its international rollout across Central Asia, the Asia Pacific, Latin America, the Middle East, and Europe.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Li Anqi for 36Kr.