For users, there is no need to deliberately distinguish which manufacturer produced a particular battery. This is because the underlying product definition, technical standards, and final quality control for all batteries, whether from CATL, Sunwoda, or Li Auto's own in-house power batteries, are all led by Li Auto. This statement was made by Liu Liguo, Senior Vice President of Vehicle Electric R&D at Li Auto, in an interview.

That evening, the new Li L8 was launched, featuring a standard in-house developed 72.7 kWh 5C range-extender dedicated super fast-charging battery. It offers a CLTC pure electric range of 430 kilometers, with fast charging capable of replenishing the battery to 80% in 10 minutes.

Focus on User-Centric Solutions

The core objective behind developing in-house batteries is to address user pain points that standard off-the-shelf products in the market cannot solve. Therefore, users only need to recognize the 'Li Auto Standard', as the company guarantees the products delivered to users offer a consistent experience, according to Liu.

It is understood that the power battery selected for each previous Li Auto model was not a standard off-the-shelf product. Liu Liguo commented on this, stating that while they could opt for standard products, that is not their strategic choice. The company's approach, from product R&D and integration to final vehicle control, is based on user considerations, making it difficult to meet their needs through externally supplied standard products.

Clarifying the In-House Development Strategy

Notably, Li Xiang, Chairman of Li Auto, previously outlined the company's three-tier supply chain collaboration model: in-house R&D and manufacturing, in-house R&D with outsourced production, and external procurement. The in-house R&D and manufacturing model applies to components that align with Li Auto's value proposition and strategy, and for which there are no mature suppliers capable of meeting its requirements, such as the range extender, electric drive systems, intelligent driving-related parts, and now, in-house batteries.

In October 2025, Li Auto and Sunwoda each invested 50% to establish Shandong Li Auto Battery Co., Ltd., with a registered capital of 300 million yuan, focusing on producing Li Auto's in-house developed power batteries.

Defining Roles in the Partnership

Liu Zhimin, Senior Director of Power Battery at Li Auto, explained the division of responsibilities within the joint venture, which is structured across two layers: R&D and manufacturing.

From the R&D perspective, the in-house battery development is entirely led by Li Auto for product definition, encompassing everything from the cell level, including material formulation and structural systems, to the underlying development of the entire battery pack and BMS. In certain aspects, they collaborate with partner teams for joint development, requiring industrial coordination.

From the manufacturing perspective, within the joint venture, there is a comprehensive operational mechanism. The Li Auto team holds the chairman position in the joint venture, with overall R&D design, manufacturing processes, and quality standards uniformly regulated and required by Li Auto. For specific manufacturing execution, they leverage the partner's mature manufacturing platform and divide tasks based on each party's areas of expertise.

Addressing the Cost Reduction Misconception

Power batteries typically account for 30% to 40% of a new energy vehicle's BOM cost. As the 'heart' of the vehicle, they directly determine core experiences like range, charging efficiency, safety, and lifespan, making them a key component influencing both product capability and cost structure. Based on this, some view in-house battery development as a means for cost reduction.

However, in Liu Liguo's view, Li Auto's development of in-house power batteries is not for cost reduction. If the goal was merely to be cheaper, directly purchasing standard products from the market would be the simplest approach. The company's choice is to solve user problems, eliminating range and charging anxiety, which cannot be achieved by simply selecting standard products.

He believes that Li Auto's in-house batteries are not standard products; they are highly integrated with the vehicle's chassis architecture and thermal management system. When the industry lacks readily available products that meet their stringent requirements, they must take matters into their own hands, engaging in full-stack in-house development from underlying materials and cell design to system architecture.

Ensuring User Trust and Maintaining Supplier Relationships

It is undeniable that in the power battery field, industry leader CATL enjoys high user recognition and is a core supplier for Li Auto. With the 'Li Auto' branded power battery being installed in vehicles, will users be willing to accept this new option?

Users' core concerns regarding power batteries are threefold: product performance driven by technical capability, product quality determined by production control, and the sense of trust derived from brand endorsement. CATL, as a B2B enterprise, has achieved significant success in B2C brand building, advancing public understanding of new energy batteries. However, the automaker remains ultimately responsible for overall vehicle performance. Regardless of who manufactures the power battery, it is Li Auto that ultimately guarantees the user experience and safety.

Within Li Auto, the battery performance standards for each product generation are defined by the company itself, and a significant amount of core battery technology innovation is led by them. Therefore, whether choosing to cooperate with suppliers or engage in in-house development, Li Auto remains the leader and decision-maker in R&D work, Liu Zhimin emphasized.

Despite the official installation of the in-house 'Li Auto' branded battery, the company will not discontinue cooperation with other battery suppliers. Li Auto's supplier partnerships have always been diverse. The company has deep and efficient cooperation with CATL in the fields of range-extender batteries and 5C ultra-fast charging. In the cooperation with Sunwoda, the battery cells are self-developed by Li Auto, while Sunwoda handles production, helping to implement the technology.

Future Strategy and Supply Philosophy

Regarding the proportion of in-house R&D versus external procurement for Li Auto's power batteries, Liu Liguo stated that the company 'will not set a fixed number,' but decisions will be made internally through a competitive mechanism. A healthy dual-line competitive relationship will be established based on the P-S-Q-C-D mechanism (Product Performance, Safety, Quality, Cost, Delivery).

Li Auto will continue to invest in in-house R&D while innovating in products and technology centered on the value proposition of providing users with products and services that exceed expectations. The company's ultimate product solutions will not rely solely on the in-house R&D route; the supply will definitely be diversified, and they will continue to cooperate with top-tier suppliers in the industry, Liu Zhimin stated.