Chinese EV maker Li Auto challenges Tesla, home-grown rivals, with new five-seat SUV as competition intensifies

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The L7, starting at 319,800 yuan (US$47,108), is the third new model the start-up has launched in the world’s largest EV market in just eight months

The car’s price point is significantly below that of Li Auto’s flagship L9 SUV, but nearly 60,000 yuan above the starting price of Tesla’s Model Y

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Li Auto’s five-seat electric SUV, the L7, went on sale on Thursday. Photo: Li Auto website

Daniel Renin Shanghai

Published: 3:30pm, 9 Feb 2023

Li Auto, the nearest rival to Tesla in China’s electric-vehicle (EV) market, has started taking orders for a new five-seat SUV, aiming to expand its customer base as weakening demand for premium cars raises the competitive stakes.

The Beijing-based company’s L7, starting at 319,800 yuan (US$47,108), is the third new model the start-up has launched in the world’s largest EV market in just eight months. Orders began on Thursday, with delivery to start in early April.

The L7 hits a price point significantly below the 459,800 yuan sticker price on Li Auto’s flagship six-seat L9 SUV, introduced in June, but nearly 60,000 yuan higher than the basic edition of Tesla’s Model Y.

“The L7 is aimed at widening the customer base since Li Auto’s electric SUVs have earned a good reputation for their performance among wealthy drivers,” said Chen Jinzhu, CEO of consultancy Shanghai Mingliang Auto Service. “It will help Li Auto narrow its gap with Tesla, though demand for premium EVs is weakening.”

Tesla electric vehicles wait to be loaded onto a cargo vessel at Nangang port in Shanghai on May 15, 2022. Photo: Getty Images

Sales of premium electric cars have slowed since late 2022 as mainland middle-class consumers drifted towards cheaper models priced below 200,000 yuan amid worries about their job prospects and wages. This has seen the EVs offered by traditional carmakers, particularly global No. 1 EV maker BYD, gain in popularity.

A Huaxi Securities research report said on Thursday that the launch of L7 reflects Li Auto’s improved development capabilities, adding that the five-seat SUV would appeal to families with a budget of about 300,000 yuan who want to own a premium vehicle.