Li Auto’s battery campaign targets new orders and a different supplier relationship

Key conclusions

Li Auto’s immediate task is to build confidence in the wider adoption of its own battery designs and help sell the refreshed i6. Li Xiang explained the case for in-house battery development on 19 October. The company unveiled its Lianshan electric-powertrain system and battery protection programme the following day, ahead of the i6 launch scheduled for 28 October. The sequence connects technical explanation, financial protection and a product launch.^[1][2][3]

The business is recovering slowly in volume while profitability remains under pressure. Third-quarter deliveries totalled 99,964, up approximately 7.2% year on year and 1.7% sequentially. Second-quarter vehicle margin was 9.4%, against 19.4% a year earlier. Battery investment has to improve delivery reliability and product competitiveness, then reduce procurement and quality-related losses over time.^[4][5][6][7]

Over the next year, Li Auto is likely to strengthen control of design and quality while specialist battery companies handle manufacturing. Sunwoda and CALB are already part of the contract-manufacturing arrangements for the refreshed i6’s cells. The earlier benefits should come through supply options and vehicle development; profit gains depend on yields, purchasing terms and after-sales costs.^[8]

A coordinated campaign supports a broad battery changeover

Battery development has already entered Li Auto’s product plans. On 7 September, the company said its own batteries were being used in the L8, L6 and i8, with adoption to expand across the range. October’s campaign translates those engineering and supply arrangements into reasons for customers to buy.^[9]

The communications address three practical issues: why the batteries are changing, what customers gain, and who pays when something goes wrong. Li Xiang explains the strategy, engineers present range and charging improvements, and the protection programme addresses financial concerns. The vehicles entering showrooms must bring these messages together.

The refreshed i6 is the clearest example. Product information published on 9 October specifies a 96 kWh in-house-developed 5C battery throughout the range, with CLTC range of 780 km for the rear-wheel-drive version and 710 km for the all-wheel-drive version. Chips, seats and cabin screens are also being upgraded.^[3] This gives sales teams a concrete comparison with the outgoing model. Explaining the battery arrangements before launch also gives dealerships time to handle questions about suppliers and quality.

The brand change is specific. A familiar battery supplier previously helped customers assess quality. Li Auto now wants its own design, validation and protection commitments to carry more of that reassurance. Greater purchasing freedom puts more responsibility for battery quality directly on the vehicle brand.

Volume is recovering; the profit challenge is more urgent

July, August and September deliveries were 30,468, 37,679 and 31,817 respectively. The quarterly total approached the top of the company’s earlier 95,000–100,000 guidance, while September was 15.6% below August.^[4][5][6][7] The recovery remains uneven and needs sustained contributions from new products.

The September announcement identified more than 10,000 deliveries of the new L6, showing the continued importance of extended-range vehicles.^[4] Applying battery improvements to both extended-range and fully electric models therefore makes commercial sense. Longer electric range can help retain family buyers for the former, while charging convenience and product improvements support expansion in the latter. Shared development also spreads spending across more vehicles.

Profit retained per vehicle is the more immediate constraint. Second-quarter vehicle margin improved by 3.3 percentage points sequentially but remained 10 points below the year-earlier level; management attributed the change mainly to product mix.^[7] Adding equipment to win volume increases the efficiency demanded of procurement and manufacturing.

The new i6 combines a larger battery with additional features. Pricing must make the upgrade attractive while covering those additions. If volume requires progressively larger discounts, recovering the investment becomes harder. Launch pricing, subsequent incentives and deliveries from November should therefore be assessed together.

Public information reviewed for this article does not disclose firm orders for the refreshed i6, the cost per kWh of its in-house battery, or model-specific margins. The strongest current conclusion is that Li Auto has assembled a substantial product and supply programme; the quality of sales generated by that programme will determine its contribution to earnings.

Cell design control addresses supply and development timing first

Li Auto has direct experience of battery shortages. Its 2025 annual report states that the i6 suffered significant delivery delays from late 2025 because of constraints in core components, particularly battery cells.^[11] Orders could not be converted into revenue promptly, and longer waiting periods gave customers more opportunity to choose another brand.

The new i6 arrangements offer a concrete response: Li Auto develops the cells, Sunwoda and CALB manufacture them, and Li Auto produces the packs.^[8] Cell specifications and vehicle development can be coordinated early, with two manufacturing partners supporting production. Capacity expansion, order allocation and process improvements can then be organised around the same vehicle programme.

This places greater demands on procurement. Process capability, yield improvement, capacity commitments and quality responsibilities need to be agreed early. Consistency across factories gives Li Auto more room to allocate orders and respond to disruption.

Engineering teams can also make product decisions earlier. Battery dimensions affect floor layout, heat generation affects cooling, and power management shapes cold-weather performance and charging. Developing these characteristics with the vehicle can reduce late structural changes required to accommodate an existing pack. Development efficiency and supply predictability can produce benefits before substantial cost savings emerge.

Costs will depend on execution. In September interviews, management prioritised access to technology, data and fault diagnosis, and acknowledged that in-house development may not be cheaper than purchasing a supplier solution.^[12] Li Auto takes on development and validation spending, while manufacturing partners still need a return. Reuse across models, better yields and fewer quality losses are needed to spread that investment.

The protection programme concentrates responsibility on Li Auto

The announced programme provides a vehicle of equivalent specification when a quality defect in Li Auto’s own battery causes spontaneous combustion and the vehicle meets total-loss criteria. For a battery fire caused by a collision or underbody scraping, also resulting in a total loss, it covers the difference between the insured vehicle-damage amount and the insurer’s actual payment.^[10] Eligibility and exclusions remain governed by the official service terms.

For sales teams, this is easier to communicate than cell chemistry: Li Auto is offering additional compensation in defined circumstances. For management, it requires earlier risk control. Manufacturing-defect detection, vehicle alerts, diagnosis and claims handling all affect the cost of the commitment.

An earlier recall illustrates the need for system-wide validation. A regulator announcement in October 2025 covered 11,411 MEGA vehicles. Insufficient corrosion protection in a batch of coolant could cause cooling plates to corrode and leak, with battery thermal runaway possible in extreme circumstances.^[13] Interfaces between cells, packs, coolant and power electronics require coordinated validation.

Li Auto already offers a Lianshan industrial collaboration tool for suppliers. Its official product page describes anomaly alerts, quality-data queries and tracking of corrective work.^[14] Applied to batteries, such tools can help engineers locate affected batches and process steps, then feed corrective measures back into production.

During the supply changeover, comparable results matter: repair rates by factory, response times after alerts, repair duration and compensation costs. Improvements would allow the protection programme to support both sales and lower long-term losses. Manufacturing problems would concentrate costs and reputational pressure on the automaker.

Two supplier models are developing in parallel

Li Auto is seeking greater control over battery design. Another competitor in family vehicles is deepening its relationship with a leading battery supplier. On 10 October, CATL and Seres announced a long-term cooperation agreement. AITO will continue using CATL batteries across its range, alongside planned expansion of battery production within the vehicle factory.^[15]

These arrangements shape competition. Li Auto wants vehicle requirements to direct battery development, with partners taking a greater manufacturing role. Seres continues to draw on CATL’s technology, production expertise and brand through closer joint operations. One model gives the automaker more design and sourcing choices; the other concentrates the use of an established supplier’s capabilities.

Sunwoda and CALB gain opportunities to provide manufacturing and industrialisation services to automakers with their own development teams. CATL faces pressure on procurement shares and bargaining relationships for some programmes, while new technologies, quality performance and dedicated capacity remain ways to retain business. Li Auto and CATL signed a five-year agreement in 2025; future purchasing shares by model have not been disclosed.^[16]

Commercial success will be decided among similarly priced vehicles. Delivery time, range available for a given budget and reliable winter and long-distance operation will affect returns on the technology. Dealerships need to demonstrate the differences through test drives and charging, while suppliers must maintain consistent production batches.

First the i6, then returns across the range

The most likely direction is wider use of Li Auto’s battery designs, with the i6 supporting electric-vehicle volume and cross-model reuse improving investment returns. Named vehicles and manufacturing partners are already in place. Extending this approach fits the existing allocation of resources better than an abrupt change to a different supply system.

Near-term tests are the new i6’s pricing and conversion of orders into deliveries. Over the following quarters, the questions become whether incentives must keep rising and whether vehicle margins improve alongside volume. Progress on both would indicate a stronger commercial return from the added technology.

Charging infrastructure supports this process. At the end of September, Li Auto reported 4,188 stations and 23,077 charging stalls.^[4] The existing network supports battery upgrades and needs more vehicles to use it. Further investment should prioritise actual routes and peak-period capacity so that charging convenience helps close vehicle sales.

For the longer term, management said in September that a 15C system was undergoing vehicle testing, with technical readiness expected in 2027; production would depend on vehicle and charging-network plans.^[12] Wider deployment of the current 5C solution is consequently the more likely operating priority over the next year. Higher charging rates provide options for later products.

Li Auto’s campaign has a clear commercial direction: take responsibility for the battery brand and quality, secure more control over design and supply allocation, and use new electric vehicles to grow. The most valuable outcomes would be reliable i6 deliveries, controlled incentives and improving returns per vehicle as more models share the battery-development investment.