Li Auto Eyes Global Expansion: Plans Entry into Overseas Markets Starting from the Middle East in 2024, According to Reports

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Li Auto is gearing up for a major international foray, with plans to enter overseas markets, starting in 2024, particularly targeting Middle Eastern countries like the UAE, Saudi Arabia, and potentially North African nations. According to reports from local media outlet LatePost, the first model to make its debut in these markets will be the flagship Li L9, with considerations for introducing the Li L8 and Li L7 based on consumer reception.

Li Auto Eyes Global Expansion: Plans Entry into Overseas Markets Starting from the Middle East in 2024, According to Reports - Car News - 1

LiAuto L9 Max

Li Auto, known for its extended-range electric vehicles (EREVs), is strategically positioning itself in the global market. The Li L9, boasting a starting price of RMB 429,800 ($60,220), represents the pinnacle of Li Auto’s pricing spectrum. The company is aligning its overseas expansion with its recent venture into battery electric vehicles (BEVs), exemplified by the pre-sales launch of the Li Mega MPV at the Guangzhou auto show.

LatePost’s report reveals that Li Auto’s decision to prioritize the Middle East over Europe for its global expansion is influenced by political and consumer considerations. The Middle East, being more receptive to Chinese electric vehicle (EV) makers, contrasts with the European Union’s recent anti-subsidy investigation into Chinese EVs. Additionally, the family-oriented focus of Li Auto aligns well with the demographic preferences in most Middle Eastern countries, where policies encourage childbirth.

The pricing strategy also reflects Li Auto’s understanding of the economic landscape in the Middle East. The high selling prices of Li Auto’s models correspond with the substantial GDP per capita in countries like the UAE and Saudi Arabia, as per International Monetary Fund (IMF) data.

Li Auto’s preparations for international expansion have been ongoing for the past two years. Although there were initial plans to enter the U.S. market in the second half of 2021, the company adjusted its strategy, redirecting efforts towards domestic operations. Founder and CEO Li Xiang clarified in a July 18 Weibo post that overseas expansion would not happen before 2025, emphasizing the company’s commitment to focusing on its 2025 goals.

Despite previous statements, the latest reports suggest a revised timeline for Li Auto’s global expansion. The company intends to adopt a phased approach, starting with a “small closed-loop” model, where Chinese-built cars will be exported to overseas markets within the next 1-2 years. The company is actively preparing for this step, including language adaptations and establishing a team led by Senior Vice President Zou Liangjun.

This “small closed-loop” model, if successful, will pave the way for a more aggressive “big closed-loop” model, starting in 2026 or later. This phase involves setting up Li Auto’s own network of directly-managed offline stores in select overseas markets, building vehicle assembly plants abroad, and guiding domestic supply chain manufacturers to establish overseas factories. The “big closed-loop” initiative is under the leadership of Li Auto CFO Li Tie, according to the report.