Media reports claim that Li Auto has slowed down its plans to export cars. Li Auto had originally planned to enter markets in the Middle East, including Saudi Arabia and the United Arab Emirates, this year, but these plans have been put on hold.
“Li Auto will not simply change the language of the Li Auto HMI system from Chinese to English, but will differentiate the vehicle appearance, intelligent driving functions and other configurations, and then use a suitable brand to promote overseas markets,” Late Post, the media that broke the story, said quoting a person familiar with the matter.
It should be noted that Late Post was the same media that last November claimed that Li Auto would be entering the Middle East market this year.
It’s claimed that Li Auto has found the Middle East market more complex than originally thought. Another problem is that the market for NEVs is not particularly large, with a penetration rate of only 3% in the UAE against a global average of 20%. Mordor Intelligence claims the value of the NEV market in the Middle East in 2023 was 2.7 billion USD, about 1% of the value of the Chinese market.
Li Xiang, the CEO of Li Auto, first mentioned starting exports at the 2020 Q4 results meeting. The company even began in 2021 to draw up plans to enter the US market.
Although Li Auto does not officially export cars, this has not stopped parallel exports. These are believed to have accounted for about 30,000 cars in 2021, or about 10% of overall sales. Indications currently show that they should also make up around 10% of new car sales in 2024.
Earlier this year, we reported that Li Auto was the eighth best-selling brand in Russia in March despite not officially exporting there. It’s claimed that most parallel exports end up in Central Asia and the Middle East.
The company believes that it is now very difficult for a Chinese NEV company to enter the US and major Western European markets. Furthermore, China, the US, and Western Europe account for 85-90% of the global premium market.
Source: Late Post
