China EVs: Li Auto rewards hard-working employees with fat bonuses for surpassing 2023 sales target

Li Auto, mainland China's nearest rival to Tesla, is giving huge bonuses to its employees after the electric-car maker's deliveries in 2023 exceeded the target in a highly competitive market.

The Beijing-based carmaker plans to grant annual bonuses ranging from four months to eight months pay to nearly 20,000 employees, compared with an industry average of two months' salary, Shanghai-based financial media outlet Jiemian reported.

While Li Auto did not reply to a request for comment from the Post, co-founder and CEO Li Xiang said on the microblogging site Weibo that the company would reward the hard-working employees with a bonus much higher than last year.

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"We gave small bonuses [last year] because the company failed to reach the sales target for 2022," he said. "A big bonus will be distributed this year because the sales goal in 2023 was surpassed."

A Tesla Cybertruck is display in a mall in Shanghai last month. Photo: EPA-EFE alt=A Tesla Cybertruck is display in a mall in Shanghai last month. Photo: EPA-EFE>

Li Auto will continue to stick to its performance-based salary system to encourage workers to enhance their performance, he added.

The company delivered 376,030 premium electric vehicles (EVs) to mainland customers in 2023, a jump of 182 per cent year on year that exceeded the sales target of 300,000. It broke its monthly sales record for nine consecutive months between April and December.

It trailed only Tesla in China's premium EV segment. The US carmaker handed more than 600,000 Shanghai-made Model 3 and Model Y vehicles to mainland buyers last year, an increase of 37 per cent from 2022.

Li Auto, along with Shanghai-based Nio and Guangzhou-based Xpeng, is viewed as China's best response to Tesla because all three carmakers assemble EVs featuring autonomous driving technology, sophisticated in-car entertainment systems and high-performance batteries.

Nio delivered about 160,000 units in 2023, 36 per cent shy of its target. Xpeng handed about 141,600 vehicles to mainland consumers last year, 29 per cent short of its projected volume.

Li Auto has its ­finger on the consumers' pulse and is particularly good at catering to the tastes of affluent motorists, according to analysts.

After plodding along with a single model, the Li One, between 2015 and mid-2022, the company launched three new luxury sport-utility vehicles starting in June 2022. The L7, L8, L9 became instant hits in China.

The new SUVs boast of intelligent four-wheel-drive ­systems and 15.7-inch passenger entertainment and rear cabin entertainment screens - elements that appeal to middle-class consumers.

CEO Li said last month that the company aimed to deliver 800,000 units in 2024, an increase of 167 per cent from 2023.

"It is an ambitious target given that the overall market growth is slowing amid fierce competition," said Gao Shen, an independent analyst in Shanghai. "Li Auto and its Chinese peers will need to launch more new models to target a wider customer base."

Electric-car makers delivered 8.9 million units to mainland buyers last year, a 37 per cent year-on-year increase, according to the China Passenger Car Association.

But EV sales growth on the mainland could slow to 20 per cent this year, according to a forecast by Fitch Ratings in November.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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