Sales Decline for Three Consecutive Months, Li Auto Begins "Car Dismantling"

At 3:00 PM on August 4, Li Auto placed a new-generation Li L6 on a live streaming platform.

Over the course of more than four hours, the vehicle was dismantled into five parts: seats, body, safety structure, chassis, and battery.

This live car dismantling event took place against the backdrop of Li Auto's sales declining year-over-year and month-over-month for three consecutive months.

Li Xiang, Chairman and CEO of Li Auto, wrote in a social media post before the live dismantling: "Competing on materials is better than competing on price."

For Li Auto, the live dismantling is an attempt to re-demonstrate product strength while under sales pressure.

Since 2023, Li Auto has grown rapidly thanks to its L-series extended-range SUVs, becoming one of the first companies in the new force camp to achieve scaled profitability. The Li L7, L8, and L9 cover different price ranges and have formed differentiation through their positioning as "family smart flagship SUVs."

However, as competitors enter the extended-range market and competition in pure electric models accelerates, the advantages Li Auto previously established are being reshaped.

Today, Li Auto is using product displays, technology communication, and adjustments to its product system to search anew for a growth path.

Three Consecutive Declines

Li Auto's sales decline did not start in July.

Looking back at the monthly trends this year, deliveries reached 41,053 units in March, hitting a new high for the year, after which they entered a downward channel. April saw 34,085 units, May 33,350 units, June 30,895 units, and July 30,468 units, with a cumulative decline of over 10,000 units over four months.

From a year-over-year perspective, May decreased by approximately 18%, June by 14.84%, and July by 0.86%. Although the decline narrowed month by month, a signal of stabilization has not yet appeared.

Li Auto is also intensively launching new models.

In the past three months, Li Auto successively completed the model refresh of key extended-range models such as the all-new L9 and all-new L8, and launched the new-generation L6 in July. However, judging from delivery results, the intensive launch of new models has not yet reversed the overall downward trend.

The extended-range route is transforming from a differentiated choice into a technical direction increasingly adopted by more automakers.

In the past, extended-range models were mainly promoted by a few new force enterprises, but in recent years, more companies, including traditional automakers and new energy brands, have begun to launch extended-range products.

As more brands enter the same market, the differentiating effect brought by extended-range technology itself is diminishing.

When consumers choose new energy SUVs, their considerations have shifted from "whether it solves range anxiety" to comprehensive experiences such as intelligent driving, cockpit, design, price, and brand.

Competition in the family SUV market is also intensifying.

In the past, Li Auto established strong recognition through its family positioning, but as competing brands continuously launch similar products, "large space, high configuration, and intelligence" have become common industry demands.

What Li Auto needs to face is no longer just the transition of traditional fuel SUV users, but competing for more mature consumers among new energy brands.

Li Auto's pure electric business has not yet formed a sufficiently distinct brand label.

Currently, Li Auto has only three pure electric models on sale. Although the pure electric model i6 has exceeded monthly sales of 20,000 units for several consecutive months, becoming the main sales driver for the brand, sales are still supported primarily by a single model, and the product structure remains relatively singular. In the first quarter of 2026, Li Auto reported a net loss of RMB 2.3 billion, compared to a net profit of RMB 647 million in the same period of 2025; vehicle gross margin fell from 19.8% in the same period of 2025 to 6.1%.

An analyst following the industry told Wall Street News that Li Auto is in a critical period of pain characterized by "extended-range iteration and pure electric transition," where the competitiveness of older extended-range models is weakening, and new models have not yet fully ramped up volume.

The three consecutive months of sales decline have become a node for Li Auto to re-examine its product strategy. The live dismantling of the new-generation L6 on August 4 unfolded precisely against this background.

Car Dismantling

The live dismantling on August 4 lasted more than four hours, presenting the entire dismantling process.

Li Xinyang, product head of the new-generation Li L6, hosted the dismantling, which started with the seat system and progressively delved into key modules such as the white body structure, active and passive safety systems, chassis assembly, and power battery. Li Auto officially summarized this live stream as: "Every cut is made in the places 'invisible' on the configuration list."

This live stream followed closely on the heels of the new-generation L6's market launch.

The car was officially launched on July 16 with a price of RMB 249,800, positioned as a 250,000-yuan class four-wheel-drive mid-to-large SUV. Maintaining the same price as the previous-generation L6, the new model upgrades seat comfort, chassis handling, smart cockpit, and assisted driving.

Li Xiang stated in his social media post before the live dismantling: "In a car's cost structure, elements such as material grade, structural design, thermal management solutions, and wiring harness specifications do not appear on the configuration sheet, nor can users perceive them in the showroom, but they will gradually manifest during actual use over the next five to eight years."

Zeekr is also engaging in similar dismantling communication.

Just the day before, on August 3, Zeekr completed a live dismantling of the actual Zeekr 7X vehicle, first conducting a rear-end collision test at 105 km/h, then dismantling the body, and inviting industry experts to verify the steel-aluminum structure and chassis architecture on site.

For Li Auto, this live stream is firstly a form of product communication.

However, market validation still awaits the delivery results of the new-generation L6: it must drive a rebound in the extended-range base, and the pure electric product line must continue to expand, for Li Auto to break free from reliance on a single model.

In March this year, Li Auto announced its 2026 sales target during the earnings call for the fourth quarter and full year of 2025, namely a year-over-year growth of more than 20%, corresponding to approximately 487,600 units for the full year.

By the first half of the year, Li Auto had cumulatively delivered approximately 193,500 units, a year-over-year decrease of 5.1%, making it the only brand among the top six new forces to experience a year-over-year decline. Calculated against the full-year target, the completion rate is approximately 39.7%, indicating significant pressure in the second half of the year.

To achieve this goal, Li Xiang proposed a "3+2" growth strategy at the time: on one hand, managing the sales system, promoting the refresh of the L series, and increasing volume for pure electric models; on the other hand, delivering on intelligent R&D achievements and expanding into overseas markets.

Li Xiang defined 2026 as Li Auto's "first year of formal overseas layout."

According to company planning, Li Auto has already entered markets such as Macau, Cambodia, and Laos; in the third quarter, it will launch L9 extended-range models adapted to local usage scenarios in the Middle East and Central Asian markets; in the second half of the year, it will launch the pure electric model i6 in the European market; and by the end of the year, it will release the right-hand drive version of the MEGA in right-hand drive markets such as Hong Kong, China, and Singapore.

Li Xiang also judged that in the next 3 to 5 years, the core of competition in mid-to-high-end smart cars will be embodied intelligence.

However, the transition is accompanied by growing pains, and the launch of new cars has not yet translated into sales growth.

A product executive at another new force company told Wall Street News that they are quite concerned about Li Auto's current situation, as intensively launched competing models appear to offer higher cost-performance ratios. It remains uncertain whether users will perceive Li Auto's product strength from the dismantling and pay for it.

The live dismantling on August 4 is, to some extent, an action taken by Li Auto against the dual background of sales pressure and strategic transition. What Li Auto needs to answer now is where to find growth when price wars reach their extreme, when the dividends of extended-range technology gradually fade, and when an automaker faces the dual tests of declining sales and strategic transition.