2024.05.19 10:48
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Some employees at Li Auto Beijing plant reportedly taking extra break as Li Mega sales remain weak

Li Auto employees at the Beijing plant are taking extra breaks as sales of the Li Mega MPV remain weak. The plant currently produces only the Li Mega, and thousands of completed vehicles are parked in the parking lot. The company had lower than expected orders and sales for the Li Mega, leading to price reductions. Additionally, Li Auto is undergoing layoffs of over 18% of its workforce.

Thousands of completed Li Megas are currently parked in the parking lot of Li Auto's Beijing plant, according to local media.

(Image credit: CnEVPost)

Some employees at Li Auto's (NASDAQ: LI) Beijing plant have taken the majority of this week off, as sales of the Li Mega MPV (multi-purpose vehicle) have fallen short of expectations, according to a local media report.

These employees have been on break since Tuesday and are expected to resume work next Monday, LatePost, which visited the plant on May 17, said in a report today.

Beijing-based Li Auto (NASDAQ: LI) currently sells the L-series extended-range electric vehicles (EREVs) -- the Li L6, Li L7, Li L8, Li L9, and the Li Mega battery electric vehicle (BEV).

Its L-series EREVs are produced at its plant in Changzhou, Jiangsu province, while the Beijing plant currently produces only the Li Mega.

When the Beijing plant first started production, employees only had two days off a week on Saturdays and Sundays, LatePost said, citing a person familiar with the matter.

As of about a month ago, some employees have seen their weekly break grow to three days and don't have to work on Fridays, according to the report.

Starting this week, some employees' vacation days grew further to 6 days, with only having to work on Mondays, the report said.

However, that doesn't mean the entire Li Auto Beijing plant is on vacation, LatePost noted.

For example, just this past Friday morning around 8 am, there were a number of manufacturing department employees, and supplier people who came into the factory, the report said.

During peak production days, the number of employees coming to work at the factory was more than triple the number on the past Friday, the source said.

Li Auto's Beijing plant was converted from the original Hyundai's No. 1 factory and is mainly used for the production of pure electric models, with a production capacity of 100,000 units in the first phase, the report noted.

Thousands of completed Li Megas are currently parked in the plant's parking lot, with a combined value of more than RMB 500 million yuan ($69.2 million), the report said.

Li Auto launched the Li Mega on March 1, along with 2,024 L-series EREVs.

Li Mega's orders and sales fell short of expectations after its launch, LatePost said.

Li Auto's order expectations for the model within the first 24 hours of its launch were around 3,000 units, but it ended up achieving only half of its goal, the report said, adding that cumulative orders for the model within half a month of its launch stood at nearly 4,000 units.

Li Mega delivered 3,229 units in March and 1,145 units in April, according to data compiled by CnEVPost.

On April 22, Li Auto lowered the prices of all models except the Li L6, with most of the price cuts for the L-series models being in the range of RMB 20,000 yuan.

The Li Mega saw the largest reduction at the time, at RMB 30,000, with a starting price of RMB 529,800, down from RMB 559,800 at launch.

Li Auto's management was confident about the Li Mega at the time of its launch, with one executive stating that the BEV would challenge sales of 8,000 units per month.

On March 22, Li Auto held an investor meeting and lowered its 2024 sales forecast to 560,000-640,000 from its original 650,000-800,000 sales forecast, 21jingji said in a May 16 report.

Li Auto is in the midst of a new round of layoffs, with an overall ratio of more than 18 percent, potentially involving more than 5,600 people, 21jingji reported.

($1 = RMB 7.2243)

Li Auto laying off over 18% of its workforce, report says