Before the release of Li Auto L6

Tonight, the 'Big Thigh Song' (a nickname for Li Xiang, CEO of Li Auto) will launch the L6 car. How the stock price moves in the short term largely depends on the market's feedback after this event.

After all, this is the most important car launch of the year. Although strategies can be adjusted later, as the saying goes, 'the first blow is half the battle.' With the lessons learned from the Mega, they will likely be extra cautious with the L6. 'Listen to their words, but watch their actions'—after the Mega, both internal and external voices have focused on the former. More importantly, this launch gives us nano shareholders a great opportunity to observe how management will take concrete actions to address the current situation.

Personally, I hope they don’t over-control 'expectations for sales' or place too much emphasis on 'maintaining a 20%+ gross margin.' Keep it simple—don’t repeat the Mega’s pricing mistake with the L6; set it lower. Then, generously roll out discounts, repurchase benefits, and perks for the L7, L8, and L9, even if it means slightly lowering the gross margin. Focus on momentum and market share. This year, in terms of total sales, aim to at least surpass Audi, if not the top two of BBA (BMW, Benz, Audi).

I hope the starting price of the L6 can be between 220,000-230,000 RMB, with appropriate pre-order benefits. For promotion tactics, learn from Lei Jun (Xiaomi’s CEO) and the strategies used during the ZEEKR 001 launch—it could bring significant advantages.

Additionally, here’s an update on my thoughts about $Li Auto(LI.US):

Ultimately, everyone now understands: from an investment perspective, the auto industry isn’t an ideal business model. To achieve 超额收益 (excess returns), you need to closely monitor and confirm that the management is exceptionally strong.
For the industry: concentration may fall short of expectations; sustained differentiation is difficult; brand-building takes time.
Diverse demand for cars objectively exists. A single car model or product 定位 (positioning) is insufficient. Li Auto claims that deepening its focus on family cars could rival Apple’s revenue, but this assumes brand concentration.
Under these circumstances, expectations for ROI may be overestimated. To put it bluntly, hoping for explosive short-to-medium-term 超额收益 in the auto industry might be unrealistic.
Toyota’s stock grew 8x over 20 years since 2002, with an annualized return of 11%. But if you exclude the recent 2 years (a 特殊窗口 due to China-US decoupling), the annualized return drops to 6-7%.
Li Auto is special to us because, as shareholders and users of a 本土 (local) mass-consumer brand, we have unique insights into this stock. However, this doesn’t escape the logic of business models: profitability, ease of profitability, and stability. On these three dimensions, cars can’t compare to Kweichow Moutai (to borrow Duan Yongping’s analogy).
Of course, during the transformative period of the past 2 years—or even now—people may argue that 'EVs are a better business than ICE cars' due to the paradigm shift, supply chain disruption, and redefinition of cars by autonomous driving.
These three paradigms still exist but aren’t exclusive to Li Auto. Moreover, they’ve mostly improved the product experience without fundamentally altering the car’s 工具属性 (utility nature). As shareholders, we’d love to see exceptional management deliver above-average returns, but if cars remain tools, the returns may not deviate much.
Among these points, what has changed between the post-earnings rally and now? Mostly nothing.
So why weren’t these thoughts raised earlier, but now, after the stock price dropped, everyone’s analyzing them?
1. Partly, emotions follow stock prices. During the rally, expectations were high for the four dimensions: paradigm shift, supply chain disruption, autonomous driving redefining cars, and management capability.
2. On the other hand, reality has delivered a slap. According to Bayesian principles, revising expectations downward is reasonable.

Will the L6 show us better evidence to revise expectations upward?