A company 100% owned by Chinese electric vehicle maker Li Auto recently purchased a plot of land in Chongqing, a southwestern city in China, which triggered some discussion about the construction of a base in the city. Li Auto declined to comment on the matter.
According to the Chongqing Public Resources Transaction Supervision Network, Chongqing Chezhiyu Automobile Industry Co., Ltd., which is 100% controlled by Li Auto, won a plot of land for about 431 million yuan ($67.98 million), and the transaction occurred on January 27, 2022.
The announcement shows that the project to be built by Li Auto using this plot will start within three months of the handover and be completed within three years after the start of construction. This means that the project will be completed by 2025 at the latest. However, the specific construction plan of Li Auto for this plot has not yet been announced.
Li Auto‘s development has a long history with Chongqing. In December 2018, Li Auto acquired Chongqing Lifan Automobile Co., Ltd. for 650 million yuan before obtaining the necessary certifications for new energy vehicle production.
On December 15, 2021, Li Auto signed a cooperation agreement with Chongqing Municipal Government. At that time, Li Xiang, Founder, Chairman and CEO of Li Auto, stated that the company would increase its investment layout in Chongqing and continue to strengthen its cooperation with the city as a whole.
At present, Li Auto has two production bases. One is Changzhou Manufacturing Base and the other is Beijing Green Intelligent Manufacturing Base that is currently being transformed.
The Changzhou Base is a self-built base of Li Auto and has an annual production capacity of 100,000 units. Over 90,000 units of Li Auto‘s Li ONE delivered in 2021 were all produced at the Changzhou base. A new workshop is under construction, which will make the whole bade reach an annual production capacity of 200,000 units upon completion.
The Beijing Green Intelligent Manufacturing Base is the Beijing Hyundai No.1 Factory taken over by Li Auto, and is now undergoing reconstruction and expansion. The total investment of the project exceeds six billion yuan, with the reconstruction and expansion area to be about 270,000 m². After the reconstruction, the planned annual production capacity is 100,000 units, of which will mostly be used to produce pure electric vehicles, and is planned to be put into production by the end of 2023.
Li Xiang wrote in an internal letter of the company that the goal of Li Auto is to gain a 20% market share of China’s smart electric vehicles by 2025, and sell 1.6 million electric vehicles annually. Obviously, the two production bases currently owned by Li Auto cannot support this goal.
Judging from the land area of the Chongqing plot recently acquired by Li Auto, its land area is 1,133,400 m², which exceeds the sum of the above two production bases and also means that its designed capacity will be greater than the sum of the first two production bases thus giving Li Auto the possibility to achieve its goal.