Li Auto is evaluating the closure of some underperforming retail outlets as it grapples with a sustained slowdown in vehicle deliveries amid intensifying competition in China’s crowded auto market, domestic media reported.
The company is assessing the move, although the number of stores potentially affected has not been finalised, Lanjinger reported on Thursday, citing a source familiar with the matter. The focus of the review is not the scale of closures but improvements in operational efficiency and overall channel effectiveness, the source said.
According to the report, most of the outlets under consideration were opened during Li Auto’s aggressive expansion phase. The company expanded its sales network most rapidly in 2023, when it added 179 retail stores as demand surged for its extended-range electric vehicle lineup.
As of Dec. 31, Li Auto operated 548 retail stores across 159 cities, the company said earlier this month when it released its December delivery data.
Li Auto’s sales trajectory has shifted sharply over the past two years. Deliveries reached 376,030 vehicles in 2023, a year-on-year increase of 182.21% and the fastest growth rate the company had recorded in five years. That momentum slowed in 2024, when deliveries rose to a record 500,508 units, up 33.10% from the previous year.
In 2025, however, deliveries fell 18.81% to 406,343 vehicles, with most months showing a sequential decline, underscoring the pressure the automaker faces from rivals offering both battery-electric and hybrid models at increasingly competitive prices.
Looking ahead, Li Auto has tentatively set a sales growth target of around 40% for 2026, aiming for about 550,000 vehicle deliveries, according to a report this week by 36Kr. To reach that goal, the company is refocusing on what it sees as its most defensible strengths, including regaining leadership in the extended-range electric vehicle segment, the report said.
The potential store closures suggest Li Auto is shifting from rapid expansion toward a more disciplined approach as China’s auto market matures and competition intensifies across both pricing and technology.
