$LI AUTO-W(02015.HK)$Li Auto(LI.US)In the medium term, Li Auto is not doing well, essentially because it has lost its strategic focus. This can be seen from its balancing act between Sunwoda and CATL batteries.

During the mass production of L7/L8/L9, Sunwoda has already become an extremely important secondary supplier, helping Li Auto balance CATL's strong bargaining power. However, in the launch and operation of MEGA and i8, Li Auto heavily emphasized the "CATL 5C/Kirin Battery" concept but mixed in Sunwoda batteries in actual deliveries or SKU planning. When public opinion discovered or questioned whether Sunwoda was being used, it instantly downgraded Sunwoda as inferior. At this point, Li Auto should have defended Sunwoda's reputation, but instead, it chose the worst possible solution: allowing public opinion to demonize Sunwoda and even potentially switching back to CATL in subsequent batches to appease users. This is tantamount to admitting that Sunwoda is indeed inferior to CATL.

For the mass-market i6 model, Li Auto took an even more aggressive approach by forcing a binary choice and offering extended warranties/faster delivery for Sunwoda batteries. On the surface, this seems like a benefit for users, but in reality, it's Li Auto officially certifying that Sunwoda is worse than CATL. Only inferior products need extended warranties to compensate for user confidence. The right approach should be to standardize battery packs across all models (without branding, only specifying parameters) or claim "our batteries meet uniform standards, shipped randomly, all with the same warranty."

If Li Auto truly wanted to elevate Sunwoda, it should have packaged the Li Auto & Sunwoda joint R&D as a technical brand early on, during the L-series era or the initial i8 launch, rather than trying to cut costs with Sunwoda while being embarrassed by it, ending up pleasing no one.