Li Auto has significantly slowed its overseas expansion efforts, shifting its focus back to the domestic market, as reported by local media outlet LatePost. The Chinese automaker had initially planned a more aggressive push into international markets but now believes that more thorough preparations are needed before entering foreign markets. This decision reflects the companyâs strategic reassessment of its priorities and resources.
Li Auto’s management has highlighted the need for overseas models to be designed specifically for local consumers rather than simply adapting domestic vehicles. According to a source familiar with the matter, the company will differentiate its vehicles for international markets by modifying not only language settings but also features such as vehicle appearance and smart driving technology. The goal is to offer models tailored to each market under a suitable brand to maximize appeal.
In November 2022, LatePost reported that Li Auto initially intended to begin its overseas expansion in 2024, targeting Middle Eastern markets such as the UAE and Saudi Arabia, as well as potentially entering some North African countries. The first model slated for these markets was expected to be the flagship Li L9. The company had also considered offering lower-priced models like the Li L8 and Li L7, depending on market demand and consumer reception in these regions.
Li Auto currently sells a variety of extended-range electric vehicles (EREVs) in China, including the Li L6, Li L7, Li L8, and Li L9, along with the Li Mega electric MPV. However, the complexities of entering the Middle Eastern market, particularly regarding local regulations and consumer preferences, have slowed the companyâs efforts. Sources close to the international business team emphasized that the slowdown is not due to new challenges but rather a reflection that the timing for expansion is not yet ideal.
The company has acknowledged the difficulty for new Chinese automakers to break into larger, established markets such as the US and Western Europe, which account for the majority of the global luxury car market. Given that Li Autoâs models are positioned in the higher price range, the company sees limited strategic value in entering smaller or less mature markets at this stage. For now, Li Autoâs focus remains firmly on maintaining its competitive edge in Chinaâs luxury EV market.
Despite the delay, Li Auto continues to explore overseas opportunities. During an earnings call in February 2024, the company outlined plans to establish an after-sales service network in Central Asia and the Middle East by mid-year, maintaining a direct sales model in these markets. While challenges remain, Li Auto has begun recruiting sales and service teams in Dubai and plans to introduce models like the Li L9 and Li L7 to international markets later in the year, adapting to local conditions and policies where necessary.
