This is the second cut after Li Auto lowered its 2024 sales target from 800,000 units to 560,000-640,000 units.

Li Auto (NASDAQ: LI) has reportedly further cut its sales target for this year, after it experienced an unexpectedly weak year-to-date performance.

Li Auto lowered its sales target for the full year 2024 to about 480,000 units, implying a year-on-year increase of 27.6 percent, local media outlet LatePost said in a report yesterday.

In February, Li Auto founder, chairman and CEO Li Xiang first formally announced a full-year sales target of 800,000 units on the eve of the launch of the company's first battery electric vehicle (BEV) model, the Li Mega, but the target was downgraded soon after, the report noted.

On March 21, Li Auto adjusted its full-year sales target to “a 50-70 percent increase over 2023 sales” due to weaker-than-expected orders for both the Li Mega and 2024 L-series models, implying 560,000-640,000 units, the LatePost report said.

After announcing a delay in the release of its three all-electric SUVs, Li Auto has once again adjusted its full-year sales plan and now hopes to sell 50,000 units per month as soon as possible in the second half of this year, the report said.

Li Auto, one of China's best-known extended-range electric vehicle (EREV) makers, launched the Li Mega MPV (multi-purpose vehicle) on March 1, its first foray into the BEV market.

The company also launched the 2024 Li L7, Li L8, and Li L9 on March 1. On April 18, it rolled out the new EREV model, the Li L6.

Li Auto saw strong sales growth in 2023 and delivered a record 50,353 vehicles in December, bringing full-year deliveries to 376,030.

The company had a sales target of 300,000 units for 2023, and it was a rare Chinese automaker to hit its annual target last year.

On February 6, local media outlet Jiemian reported that Li Auto employees' year-end bonuses for 2023 ranged from four to eight months' salary, an amount significantly higher than the industry's typical two-month salary year-end bonus, as the company met its sales target.

The strong performance in 2023 has boosted Li Auto's morale and its management was looking forward to 2024.

Li Auto leased a more than 10,000-square-meter office space in Shanghai in the second half of 2023 and planned to ramp up its sales and service network in eastern Chinese cities, including Shanghai, Suzhou and Wuxi, in 2024, according to the LatePost report.

The supersized office was part of a preparation for that effort with a one-year lease, which the company then planned to turn into a permanent headquarters for its sales and service division, according to LatePost.

The move was also in preparation for the launch of three new BEV models -- the M7, M8, and M9 -- to compete with car companies including Tesla (NASDAQ: TSLA) and Nio (NYSE: NIO) in the booming Yangtze River Delta region, the report noted.

However, the release of three all-electric SUV (sport utility vehicle) models, originally planned for the second half of this year, was delayed until the first half of 2025, Li Auto's management said on May 20 during its first-quarter earnings call.

With the delay of the three BEV models, the office is mostly vacant, Li Auto plans not to renew its lease, and some of its staff have been transferred back to its Beijing headquarters, according to LatePost.

Li Auto has made significant layoffs due to declining sales. It delivered 141,207 vehicles from January to May, up 32.54 percent year-on-year.

Li Auto will cut more than 18 percent of its workforce, potentially involving more than 5,600 people, local media outlet 21jingji said in a May 16 report.

Ironically, the layoffs may have affected some core business operations, and Li Auto has recalled some of the laid-off employees.

On the testing team, some of the laid-off employees have already been notified of their recall, Jiemian said in a report yesterday, citing a Li Auto developer.

Previously negotiated compensation for the layoffs has not yet been paid, and these will not be provided to the recalled employees, according to the report.

Li Auto reportedly merges sales and delivery teams for higher volume