Desperate to promote sales of its first all-electric sports utility vehicle, China’s Li Auto has reduced prices of the Li i8 by as much as RMB 20,000 ($2,782) just one week after its launch. Li Auto salespeople are also pushing to increase test drive bookings at their showrooms against the backdrop of lower-than-expected demand, according to a TechNode reporter’s observations.
Why it matters: The move comes at a time when the Li i8 could be following in the footsteps of Li Auto’s first all-electric model, the Mega, which experienced a significant failure upon its roll-out last March, partly due to a controversial design. Li Auto has been selling extended-range hybrid EVs (EREVs) for years while facing slowing demand for its relatively old and less diversified lineup.
- Li Auto chief executive Li Xiang said on Tuesday in a livestream on Douyin, TikTok’s sister app in China, that the company received more than 30,000 reservations with RMB 5,000 refundable deposits. However, just 6,000 or so customers turned their reservations into orders in the car’s first week following its launch on July 29, according to Sun Shaojun, founder of consumer behavior research agency CarFans.
Details: Li Auto said (in Chinese) on Tuesday it was providing only one version of the i8, rather than three as it previously announced for the model, as it reduced the price of the i8 Max by RMB 10,000 to RMB 339,800 ($47,266).
- Customers can still get the previous top-end version, the i8 Ultra, through selecting features and optional equipment for the Max variant at a total cost of RMB 349,800, RMB 20,000 cheaper than it used to be, according to an announcement (in Chinese).
- Meanwhile, the entry-level i8 Pro, featuring a relatively smaller battery pack and basic pilot functions, is no longer available. Li Auto said the base version comprised less than 2% of reservations so far. The company said it will provide refunds or exchanges for those who booked the Pro.
- It seems to be a tough sell for the company to get consumers into the i8 for a test drive, as it struggles to bolster store traffic, China Auto Think Tank reported on Monday. A TechNode reporter was also strongly encouraged to take a test drive when speaking to a Li Auto salesperson on Tuesday.
Context: Li Auto is facing strong competition from its peer NIO, as both companies last week rolled out their family-oriented, large crossovers. The company’s shares listed in Hong Kong fell 5.3% on Wednesday.
- NIO’s more affordable, roomier Onvo L90 is gaining traction, as sales of the Onvo brand surged 143% week-by-week to 3,697 units in the week from July 28 to August 3, Jefferies analysts wrote in a note dated August 5. Li Auto underperformed the market with sales of 5,471 units, marking a 26% decline from the week before.
READ MORE: Tit-for-tat battle flares between China’s NIO and Li Auto over three-row SUVs
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