• 27.08.2024

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Li Auto’s Strategic Move: Building a Supercharging Network for EV Success

Aug 27, 2024

Li Auto paves the way for electric vehicles. The company makes a key move in building a supercharging network. Previously, Li Auto announced a partnership with Shoucheng Holdings in Beijing’s Shougang Park. They will jointly invest to establish Beijing Shoucheng Supercharging Energy Technology Co., Ltd.

Li Auto's Strategic Move: Building a Supercharging Network for EV Success

This is not the first collaboration between the two parties. Reports indicate that Shoucheng Holdings managed funds participated in multiple rounds of financing for Li Auto before its IPO, investing up to 700 million yuan. Before the launch of the Phase II project at the Shunyi Industrial Park, Shoucheng Holdings led the planning and design. Thus, the establishment of Shoucheng Supercharge Company marks a deep strategic partnership between Shoucheng Holdings and Li Auto, following equity investment and the industrial park project. Years ago, when Li Auto went public, Shoucheng Holdings, as an initial investor, gained at least three times its investment, even under conservative estimates. The day before signing the cooperation agreement, Li Auto announced that its cumulative delivery surpassed 900,000 vehicles in 56 months. Now, at this pivotal moment, Shoucheng Supercharge will accelerate Li Auto’s supercharging network, supporting the upcoming launch of pure electric models. This collaboration can be viewed from three perspectives. First, it addresses a key aspect of Li Auto’s strategy. After the release and fluctuations of the first pure electric MPV model, MEGA, Li Auto announced it would not release new pure electric models this year. The focus is on building a strong foundation, and supercharging is one of those foundations. Li Xiang, CEO of Ideal Auto, emphasized that self-operated supercharging stations are essential for selling high-end pure electric SUVs. Ideal Auto aims to match Tesla China’s network, which has over 1,900 supercharging stations. The company announced a 6 billion yuan investment to build “Ideal Direct 5C Supercharging Stations.” This indicates that before expanding its product line, Ideal Auto must urgently develop its charging infrastructure. Secondly, Shoucheng Holdings plays a significant role. This shareholder is not insignificant. Shoucheng Holdings is China’s leading parking stock. It has years of experience in infrastructure asset management, particularly in parking asset management. The company excels in establishing supercharging networks, selecting sites, and managing operations. Shoucheng Holdings can leverage its quality site resources and power acquisition capabilities to support Ideal Auto. Thirdly, cooperation benefits from timing and location. Recently, Beijing released a plan to accelerate the construction of supercharging stations. It aims to complete 1,000 supercharging stations by the end of 2025. This will meet the high-pressure supercharging needs of new energy vehicles in the city, with some margin for growth. Both sides aim to advance the construction and operation of urban charging infrastructure. After the signing ceremony, they participated in the launch ceremony for the first pilot project at Shougang Park’s Liugonghui supercharging station. With policy support, we can expect to see the results of this cooperation in Beijing first.

Li Auto's Strategic Move: Building a Supercharging Network for EV Success

Compared to other new energy vehicle brands, Li Auto’s pace in launching pure electric models appears conservative. Currently, Li Auto offers only the Li MEGA pure electric MPV. The Li L9, L8, L7, and L6 are all range-extended electric vehicles. The company will expand its pure electric model lineup in the future. After adjusting its strategy, Li Auto views a comprehensive supercharging network as key to building a strong market presence for its pure electric products. This year, it has partnered with several companies in the energy sector. Supercharging alleviates consumers’ charging anxiety, enhances brand strength, and boosts high-end vehicle sales. Compared to Li Auto, brands like XPeng, NIO, Aion, Zeekr, and traditional automakers like Volkswagen and FAW have prioritized supercharging in their energy systems. Li Auto’s energy system strategy launched later than others. The company plans to establish over 2,000 supercharging stations and more than 10,000 charging piles by the end of 2024, aiming for over 90% coverage in key urban areas. As of August 22, Li Auto has 728 supercharging stations, with 233 in urban areas. The completion rate for supercharging stations stands at only 36%. The strategy is clear. In the future, Li Auto will build comprehensive service areas around supercharging stations to enhance user experience. The first supercharging network aims to cover the entire country. New charging stations will interconnect charging platforms, providing users with multi-platform services and improving convenience. High-quality charging stations will also offer temporary lounges, convenience stores, and car showrooms, creating a functional and entertaining charging environment. Li Auto’s energy construction speed is set to evolve. So, is Li Auto prepared for pure electric model development? What do you think?