The addition of the manufacturing site will further enhance the company's ability to meet growing demand, Li Auto said.

(Image credit: Li Auto)

Li Auto's previous move had sparked speculation that it would build a plant in the southwestern Chinese city of Chongqing, and now the company confirmed the plan.

"In December 2021, we entered into a strategic cooperation framework agreement with the Chongqing municipal government to build a manufacturing base in Chongqing in the Liangjiang New Area," the company said in its financial report for 2021 filed with the Hong Kong Stock Exchange today.

The addition of the manufacturing site will further enhance the company's ability to meet growing demand and provide a solid foundation for its continued growth, Li Auto said.

Li Auto did not provide more information about the site, but this is the first time it has confirmed that it will build a manufacturing site in Chongqing.

On December 15 of last year, Li Auto signed a strategic cooperation framework agreement with the Chongqing municipal government, vowing to invest more in the southwestern Chinese city. The company did not release details about their partnership at the time.

Earlier this month, information released by the Chongqing Public Resources Exchange showed that a subsidiary of Li Auto bought a 1.13 million-square-meter plot of land in the city for 430 million yuan ($67.6 million) in late January.

The site is even larger than Tesla's Giga Shanghai, which is 860,000 square meters and had a capacity of 450,000 units last year.

Li Auto is targeting sales of 1.6 million units by 2025, but the current plant in Changzhou, Jiangsu province, has capacity of only 100,000 units. It delivered 90,491 vehicles for the full year in 2021.

Li Auto officially started construction at its manufacturing site in Beijing's Shunyi District on October 16 last year and plans to start production by the end of 2023 with an annual capacity of 100,000 pure-play electric vehicles.

Li Auto buys huge plot of land in Chongqing to prepare for aggressive capacity expansion