Li Auto is preparing a new organizational restructuring that will split core functions from its product division and integrate them into its research and development organization. The move aims to accelerate product development as competition in China’s new-energy vehicle market intensifies, according to domestic media reports. The restructuring is designed to shorten decision-making cycles and speed up new model development. Under the new structure, the team responsible for battery-electric vehicle product definition will move into the vehicle R&D division. The autonomous driving terminal product team will join the foundation-model R&D unit. At the new-generation Li Auto L8 launch event last month. Over the past several years, Li Auto has adopted elements of Huawei’s product development system. It replaced a decision-making process centered on a handful of product managers with a more structured workflow. Under that model, product planning, the product division, and R&D jointly participated in decisions from project approval through vehicle development. While the framework improved product definition, it also slowed decision-making as the company expanded. Late last year, Chairman Li Xiang acknowledged the company’s declining efficiency, saying rivals were moving faster than Li Auto’s own product cycles. The latest restructuring follows several organizational changes already made this year. Li Auto consolidated its AI R&D teams in January. It established multiple embodied AI-related departments in May. Returning product definition responsibilities to the R&D organization is widely viewed as another step in the company’s strategy of returning to a startup-style operating model. The move also reflects mounting competitive pressure. Li Auto delivered 30,895 vehicles in June, down 14.84% year-on-year and 7.36% from May. That marked a second consecutive month of sequential declines. By comparison, XPeng delivered 40,126 vehicles in June. NIO Group delivered 40,597 units. Both companies posted year-on-year and month-on-month growth. China’s new-energy vehicle market has also entered another intensive product renewal cycle. Harmony Intelligent Mobility Alliance, Zeekr, XPeng, and Xiaomi continue to launch new models. Li Auto remains in the middle of a product transition. Li Auto i8 The company introduced updated L9 and L8 models during the second quarter. However, its battery-electric lineup, including the MEGA and i8, has yet to meet market expectations. The brand’s sales are currently supported primarily by the i6. Li Auto is set to enter another major product cycle in the second half of the year. The next-generation L6 will launch in July. Updated i8 and MEGA models have completed regulatory filings with China’s Ministry of Industry and Information Technology. By streamlining the product definition process ahead of multiple launches, Li Auto aims to improve development efficiency and shorten future product iteration cycles.
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