Li Auto is undertaking a significant organizational restructuring aimed at speeding up product decisions in response to intensifying competition in the electric vehicle market. The company will merge key functions from its product department into its R&D division, reducing the number of departments involved in vehicle development. This move comes as Li Auto faces sales pressure and seeks to streamline its processes.
Key Changes in Li Auto’s Structure
Li Auto plans to split off several core functions from its product department and integrate them into its R&D division. According to a report from 36Kr, this adjustment mainly affects teams responsible for electric vehicle definition, spatial intelligence, and autonomous driving.
The electric vehicle definition team will now be part of the vehicle R&D division led by Liu Liguo, while the autonomous driving end-product team will join the foundation model R&D team under Zhan Kun. The product department, previously headed by Fan Haoyu, will continue to oversee areas such as spatial intelligence and smart glasses.
Streamlining Product Development
Previously, developing a new vehicle model at Li Auto required approval from three separate departments: the product line, product department, and R&D division. With the latest restructuring, this process will be simplified to involve only the product line and R&D.
This change is intended to shorten the product definition process and improve efficiency. The company’s earlier decision to establish both a product line and a product department was influenced by its study of Huawei’s organizational practices starting in 2022.
Recent Organizational Adjustments
Li Auto has made several organizational changes in 2026. In January, the company consolidated its R&D teams into areas such as foundation models, software body, and hardware body. In late May, three new second-tier departments focused on embodied intelligence were added to the foundation model division.
These adjustments reflect Li Auto’s ongoing efforts to adapt its structure in response to market demands and internal feedback.
Competitor Comparison
Li Auto’s restructuring comes at a time when its competitors are also making strategic moves. In June, Nio Inc delivered 40,597 vehicles, while Xpeng reported 40,126 units delivered. By comparison, Li Auto delivered 30,895 vehicles in the same month, marking a 14.84% year-on-year decline and its second consecutive month of falling deliveries.
This competitive landscape highlights the urgency for Li Auto to improve its decision-making speed and product development efficiency.
Why this matters
Li Auto’s organizational changes are a direct response to declining sales and increased competition in the Chinese EV market. With June deliveries down 14.84% year-on-year and a second consecutive month of declines, the company is under pressure to accelerate innovation and bring new models to market more quickly.
Streamlining the product development process by reducing departmental overlap could help Li Auto respond more effectively to market trends and consumer demands.
What this means for buyers
For consumers, Li Auto’s restructuring may lead to faster introduction of new models and features, as well as potentially improved vehicle quality. Buyers considering Li Auto vehicles should watch for updates on new product launches and technology enhancements resulting from these changes.
Those comparing Li Auto with rivals like Nio and Xpeng should also consider recent sales trends and how each company is adapting to the evolving EV market.
Related coverage from The Electric Viking
For more on how other automakers are adapting their structures, see Xpeng Restructures Robotics Division, Adds Nine Departments to Accelerate Production, BYD to Make Sub-Brands Responsible for Their Own Profit and Loss, and Lucid’s Top Engineer Departs as New CEO Takes the Helm.
Key Specs
- June 2026 Deliveries: 30,895 vehicles
- June 2026 YoY Change: -14.84%
- Nio June 2026 Deliveries: 40,597 vehicles
- Xpeng June 2026 Deliveries: 40,126 vehicles
- Departments Involved in Product Decisions (Before/After): 3 → 2
- Recent Organizational Changes: R&D consolidation in January; new embodied intelligence departments in May
Source
Images sourced from: cnevpost.com, electrek.co, carnewschina.com
