Li Auto’s Li Xiang pushes back on “de-CATL” narrative: self-development is deep collaboration with suppliers, not confrontation — BigGo Finance

Li Auto (02015.HK) Chairman and CEO Li Xiang posted on social media on September 28, directly addressing the recent “de-CATL” controversy surrounding automakers’ in-house battery development. He made clear that equating self-development with “de-XX-ification” and positioning oneself against suppliers reflects a zero-sum, narrow mindset—one that Li Auto has never used to define its self-development strategy.

Li Xiang’s remarks come against the backdrop of multiple Chinese new-energy vehicle makers launching in-house development and manufacturing of batteries and other core components in recent years, which has fueled market chatter about a so-called “de-CATL” trend. Li Xiang believes this framing fundamentally misunderstands the purpose of self-development.

He illustrated his point with established examples from the global technology and automotive industries: “Apple’s A-series chips, as well as Nvidia’s and Qualcomm’s flagship chips, are mostly designed in-house and manufactured by TSMC. Tesla’s self-developed batteries are produced in collaboration with CATL, LG, and Sunwoda. This model hasn’t weakened TSMC, CATL, or Sunwoda—it has actually made them stronger.”

In Li Xiang’s view, the automotive industry follows the same logic. Automakers define product experience, system architecture, and quality standards at a deeper level, while partners contribute their specialized capabilities in engineering, manufacturing processes, and large-scale delivery. A healthy OEM-supplier relationship is not about one replacing the other, but about making better products through deeper collaboration. Automakers and component suppliers have never been in a zero-sum game. Self-development is not about becoming an island—it’s about pulling the best partners closer and jointly delivering a better user experience.

Li Xiang also expressed particular gratitude to CATL (300750.SZ). He revealed that Li Auto established its battery R&D team back in 2015, and when some product definitions were not well received externally, it was CATL that worked with the company on joint development and turned the impossible into reality. “Here, I want to especially thank our comrade-in-arms CATL. It was Li Auto’s deep product definition, plus joint development between both parties, plus CATL’s strong support, that helped Li Auto create products that continue to lead the industry.”

Three reasons for insisting on self-development

While addressing the controversy, Li Xiang systematically laid out why Li Auto insists on deep in-house battery development. He boiled it down to three points.

First, delivering user experiences that exceed industry standards by building solutions for unmet needs first. Li Xiang pointed out that users don’t care about underlying electrochemical terminology—they care about whether range holds up, how long long-distance charging takes, whether performance stays stable in extreme cold and heat, and how the safety bottom line is guaranteed. From the industry’s first extended-range large battery, to 5C ultra-fast charging that pushes physical limits, to improvements in lithium iron phosphate batteries’ low-temperature performance, state-of-charge accuracy, and longevity—these hardcore battery metric breakthroughs often have no off-the-shelf solutions on the market.

Second, making the battery an integrated part of the intelligent vehicle to achieve a “1+1>2” whole-vehicle experience. Li Xiang believes the battery is by no means an isolated component; it and the vehicle must form a complete living organism with full end-to-end connectivity. Deeply integrating cells, PACK, BMS, thermal management, electric drive, and vehicle control not only improves overall system safety and quality, but also enables continuous evolution through OTA updates years after delivery—charging strategies can be optimized, energy management can be refined, and low-temperature performance can keep improving.

Third, full-lifecycle data connectivity so users don’t have to pay for supply-chain division of labor. Li Xiang stated that the physical battery must ultimately become a data battery. Connecting battery and vehicle data represents a higher level of battery specialization. The value of this data connectivity lies in early warning of any minor production anomalies, with issues resolved before installation and delivery, and problems solved before users ever sense a hidden risk. It also ensures absolute consistency in after-sales service and repair standards.

Li Xiang concluded: “Times are changing, and the only standard by which we evaluate change is whether we can create greater value for users: deliver better products, provide better service, and bring better experiences. Changing for users is the ultimate starting point of every choice Li Auto makes. Li Auto never wants to ‘de-XX-ify’ anything. On the contrary, we welcome every outstanding partner to achieve deep integration with Li Auto and together push the user experience to the extreme.”

The pace of self-developed battery rollout

Li Auto’s push into self-developed batteries has been years in the making. Since establishing its battery R&D team in 2015, the company has progressively moved from joint development to deep in-house development. According to the company’s plan, once production capacity successfully ramps up, all Li Auto models will be equipped with self-developed batteries.

Li Xiang has previously stated publicly that over the long term, batteries and chips will be the company’s most important technological barriers and moats. “Self-development represents our desire to hold the core technological barriers for the future in our own hands, just like Apple and Huawei.”

From an industry-structure perspective, Li Xiang’s remarks effectively outline a path distinct from “replacing suppliers”: automakers lead product definition and system architecture, suppliers provide professional support in engineering, manufacturing processes, and large-scale delivery, and both parties jointly enhance product competitiveness through deeper data and R&D collaboration.

The impact of this model on the supply chain is worth watching. For leading battery suppliers like CATL, automakers’ push into in-house battery development does not necessarily mean lost orders. As Li Xiang noted with the Tesla example, Tesla develops its own batteries while still maintaining large-scale cooperation with multiple suppliers including CATL and LG. The core诉求 of automakers’ self-development is concentrated more on product definition and system integration capabilities, rather than fully replacing external supply.

For capital markets, Li Xiang’s remarks help ease concerns that “automakers’ in-house battery development will erode supplier market share.” By explicitly positioning self-development as “deep collaboration” rather than a “replacement relationship,” Li Xiang is essentially signaling a win-win cooperative approach to the entire supply chain. At the same time, Li Auto’s plan to equip all models with self-developed batteries means the company’s R&D investment and capacity building in batteries will continue to advance—an important variable to watch for the company’s future cost structure and product competitiveness.