Have ideals lost their appeal?
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Three days ago, on May 15, 2026, the Li Auto L9 Livis was officially launched. This is the flagship of the extended-range family into which Li Auto has poured the most energy and hopes in nearly two years.
At exactly 4 PM that day, as the launch event came to an end, the L9 Livis price was announced, coinciding with Hong Kong stocks entering Friday’s closing auction. In the end, there was no significant volatility at the close. But when the market opened on Monday, May 18, Li Auto’s share price fell more than 14%, and continued to drop about 5 percentage points the next day—a total decline of 18% in two days.
Originally, this car was seen internally by Li Auto as the most important catalyst of the year, with hopes to use the L9 replacement to reclaim high-end market share. But judging from the capital market’s trends alone, differences of opinion are large. Investors' doubts about Li Auto are rising. Note that the stock price has already retraced by half from a relative high of HK$128 half a year ago.
But has Li Auto really lost its appeal and started heading off track? The answer is no.
What is the market worried about?
Is the share price decline a return to value mean or a misjudged sell-off? First, we need to clarify what investors are actually worried about in these two plunges.
This time, the Li Auto L9 was launched in two versions: the Ultra at 459,800 yuan and the Livis at 509,800 yuan. The Livis version’s price was trimmed by 50,000 yuan compared to its pre-sale price, plus a further 20,000 yuan discount during the initial sales period.
This decrease was seen as a gesture of sincerity by consumers, but brokerages believe this pricing is still not aggressive enough.
After the launch, some institutions expressed negative views about the new L9. Citi said even with a 70,000 yuan price cut, the L9 Livis’ value for money is only on par with peers. Morgan Stanley pointed out that the six-seat SUV market is already a red ocean, crowded with competitors such as Nio, Xpeng, Aito M9, and Zeekr 9X.
On this basis, Citi forecasted monthly sales of 4,000 units for the Ultra and 1,000 for the Livis. The market seemed to listen, but reality quickly moved in the opposite direction.
According to sources, 72 hours after the new L9 was launched, weekend store visits peaked, and customers said the Livis version was 30,000 yuan below their original expectations. Moreover, the proportion of existing owners upgrading or trading in exceeded store expectations, driving a surge in test drives.
In terms of sales mix, the ratio of Livis to Ultra was 9:1. Store feedback said customers overwhelmingly chose the Livis version, with the 800V active suspension, solid-state LiDAR and wheels being what they noticed most. Customers felt the Livis' configuration offered better value for money.
Li Auto’s product line manager Tang Jing confirmed this, “At the launch, probably because we spoke mostly about the Livis, 90% of users ended up choosing the Livis version, and dual-color option take-up far exceeded expectations.”
Citi’s claim that “the more expensive, the harder to sell" and insufficient flagship appeal for the L9 Livis has fallen apart.
But hot money is mostly short-sighted. From the perspective of investors, the market indeed hoped that after experiencing volatility, Li Auto would produce a new big hit and quickly push sales and profits back into an upward channel.
Li Auto’s 2025 annual report showed total sales fell 18.8% last year; unit price per vehicle dropped 14,000 yuan year-on-year to 262,600 yuan. The scaling of entry-level models such as the i6 disrupted the previous logic of high gross margin and reliable growth for the Li Auto brand.
To stabilize the situation, Li Auto’s strategic focus in 2026 shifted to extended-range products, with only one new pure electric model retained. This can be understood as focusing firepower in their most familiar territory for a decisive battle.
However, as more competitors enter, the extended-range track has also become a red ocean. Some industry researchers noted that Nio, Xpeng, Li Auto, Xiaomi, Deep Blue, and Zeekr all deliver between 29,000 and 34,000 units per month—the gap is small, meaning the success or failure of one product could realign the rankings.
Therefore, investors hope the new L9 can deal a decisive blow to competitors, repeating the miracle of the first-generation product three years ago by driving both high volume and profit. They hope this will reverse industry price wars and mounting raw material costs.
However, Li Xiang’s main strategy has already pivoted to AI; the company is counter-cyclically increasing R&D spending, with a 2026 R&D budget guidance of 12 billion yuan, half of which is for AI. In the short term, this surge in R&D will erode profits.
Meanwhile, the internal narrative for the new L9 has become “the first embodied intelligence vehicle.” Intuitively, this seems less sexy than “high specs at lower prices,” which has increased secondary market concerns. However, with old maps, you’ll never find new continents. Li Xiang put it bluntly: “Li Auto doing AI isn’t taking a risk. Not doing it is the real risk.”
New Continents Hard to Find with Old Maps
At the beginning of the year, Li Xiang held an all-hands meeting and stressed that “2026 is the last year for anyone who wants to become a leading AI company to get onboard.” By 2028 at the latest, L4 will be implemented, and he made it clear they will make humanoid robots.
He laid out a 15-year blueprint: in the first half, autonomous driving; in the second half, humanoid robots; and finally, AGI by 2040.
Li Auto is serious about AI.
The 2025 annual report shows Li Auto’s full-year R&D investment was 11.315 billion yuan, up 2.2% year-on-year, a company record. On average, they spend a billion yuan on R&D every three days. In a year when operating cash flow from main business is negative, this is undoubtedly an aggressive choice.
In the industry, this is known as counter-cyclical investment. And this counter-cyclical move reminds people of early Apple and Tesla.
Looking back, in 2001, Apple doubled down on R&D, incubating the iPhone after the dot-com bubble burst. In 2016, facing continuous losses, lack of capacity, technical accidents and strategic investment dilemmas, Tesla still invested 13% of its revenue in R&D—and ultimately created the global hit Model 3.
In its early years, Li Auto chose to stick to its guns on extended-range technology when the industry was skeptical, trusting its judgment of market demand. It finally seized the market’s breakout moment and became the top new EV startup at the time.
Although the industry is now in another downturn, Li Auto’s thinking remains clear.
"In the late stage of competition, homogenization intensifies and concentration increases. To be more differentiated, you can’t compete at the top layer,” CTO Xie Yan told Wallstreetcn. “Top-layer things are easy to copy, and room for differentiation is narrowing. The deeper and more vertically integrated you go, the stronger the barrier.”
Xie Yan revealed that Li Auto made this strategic layout early on: “We have to go deeper, towards more difficult and core areas.” The new L9 Livis is just the first shot. Li Xiang said Li Auto essentially rebuilt the entire chassis system over the past four years, developing an in-house 5nm Mach M100 chip with dual cores yielding 2,560 TOPS of compute power.
Xie Yan mentioned that Apple dominates the smartphone industry because it integrates chips and OS, giving it capabilities far beyond peers. “Our starting point is, we must have capabilities beyond competitors.”
On another front, Li Auto’s R&D is now targeting AI hardware and embodied intelligence, with a substantial portion invested beyond vehicles. This is Li Auto’s second AI curve.
In short, Li Auto is spending today’s R&D to buy tomorrow’s voice. Moreover, the company still has 101 billion yuan in cash on hand (as of the end of 2025). This isn’t an escape route—it’s a ticket to play.
Li Auto’s growth path has always followed the same logic: early bets on the family market and extended-range technology led, after the success of the ONE, to the financial means to develop the L series; then, profits from the auto business were invested in in-house OS, model and chip development. Every step was built on the previous one.
Industry insiders say, with China’s current auto industrial chain, incubating a new Toyota or Volkswagen isn’t hard. But whether Chinese car companies can create a Porsche or BMW/Mercedes in the era of embodied intelligence depends on whether their moves are early enough.
It is worth noting that unlike other automakers, Li Auto has not capitalized its R&D cost for gradual amortization but directly expensed it all at once. Although this puts pressure on current period results, when new products launch one after another, profit upside will be huge.
This means that as Li Auto consolidates its extended-range base, ramps up pure EVs, and successfully lands its embodied intelligence curve, its performance could trace a steep upward slope. That will also mark the inflection of an old and new era.
Risk warning and disclaimerThe market carries risks and investment requires caution. This article does not constitute personal investment advice and does not account for individual users' specific investment objectives, financial situations, or needs. Users should consider whether any opinions, views, or conclusions herein fit their individual circumstances. Investment decisions made accordingly are at one's own risk. ```