Recently, an incident involving a Li Xiang L9 suddenly stalling during driving has once again thrust Li Xiang into the spotlight. As a prominent newcomer in the automotive industry, Li Xiang has been a constant source of controversy. Surprisingly, this latest incident has not had a significant negative impact on the brand.

According to media reports, a Li Xiang L9 owner claimed that their vehicle suddenly stalled while driving, with the in-car entertainment screen going black, the brakes non-responsive, the gear shift unchangeable, the doors unopenable, and all buttons inoperable. Subsequently, the Li Xiang Automobile Customer Service Center apologized and stated that the system was undergoing an upgrade at the time, and the black screen was a result of the OTA (Over-The-Air) upgrade.

Image source: Weibo screenshot

After this incident garnered online attention, Li Xiang Vice President Liu Jie clarified the situation. He posted that he hoped the public would not be misled and that Li Xiang does not initiate OTA upgrades during driving. OTA upgrades can only commence when five conditions are simultaneously met: the scheduled time has arrived, the vehicle speed is zero, the vehicle is in park, all doors are locked, and the entire vehicle is powered off. Liu Jie further stated that, after technical analysis, the owner likely manually selected the upgrade option five minutes before locking the car and leaving. Upon reaching the scheduled time, the OTA upgrade commenced while the vehicle was unoccupied and locked. He emphasized that OTA upgrades during driving would never occur and urged media outlets to verify facts before reporting and sharing them.

Image source: Weibo screenshot

On the evening of December 16, Li Xiang also responded on its official account, clarifying that for the vehicle to reach the preset upgrade time, it must simultaneously meet the following conditions: the scheduled upgrade time must have arrived as proactively set by the user, the vehicle's remaining battery life must exceed 8%, the vehicle speed must be zero with the vehicle in park, all vehicle doors and the tailgate must be locked, and the entire vehicle must be completely powered off before the automatic update proceeds. If the scheduled OTA upgrade time arrives but the vehicle is in motion, it will remind the user that the upgrade conditions are not met, and a new upgrade time will need to be scheduled.

Li Xiang's explanation garnered approval from many car owners. One blogger conducted two experiments with the Li Xiang L9 and found that, as Liu Jie and Li Xiang had clarified, Li Xiang vehicles do not initiate OTA upgrades during driving. Regarding the origins of such rumors, some netizens speculated it might be due to "increased car sales."

Among domestic automotive newcomers, Li Xiang's performance has indeed been outstanding. In terms of sales, in the first 11 months of this year, Li Xiang led all newcomers with sales exceeding 440,000 vehicles, surpassing second-placed NIO and third-placed ARCFOX by approximately 200,000 vehicles. Looking solely at November's results, Li Xiang was also in the lead with sales of 48,743 vehicles, while NIO, ARCFOX, and XPeng ranked second, third, and fourth with sales of 38,850, 36,026, and 30,895 vehicles, respectively. No other newcomer sold more than 30,000 vehicles in November.

In terms of performance, Li Xiang also stands out. Currently, among all automotive newcomers, only Li Xiang has achieved profitability, with others still incurring losses. Public information shows that in 2023, Li Xiang recorded total revenue of 123.851 billion yuan, a year-on-year increase of 173.48%, and profit attributable to shareholders of 11.704 billion yuan, a year-on-year increase of 681.65%. With this performance, Li Xiang not only set new highs for total revenue and profit attributable to shareholders but also became the only newcomer to achieve annual profitability.

Image source: Baidu

However, Li Xiang's strong performance did not persist. In the first three quarters of this year, Li Xiang's total revenue increased by 22% year-on-year, a decline from the growth rate of the same period last year, while profit attributable to shareholders also declined by 25.42% year-on-year. This underperforming performance exposes underlying concerns within Li Xiang.

One significant setback Li Xiang encountered this year was the failure of the Li Xiang MEGA. The company's first pure electric vehicle, the Li Xiang MEGA, not only failed to meet sales expectations but also generated considerable public scrutiny. Although Li Xiang CEO Li Xiang came forward to "admit his mistakes," and Li Xiang also lowered its first-quarter delivery forecast, this incident still had a notable impact on the brand.

One major impact was that Li Xiang's first attempt at transitioning to pure electric vehicles was unsuccessful. Currently, Li Xiang's only pure electric model is the Li Xiang MEGA, and the three pure electric SUVs it originally planned to release this year have been postponed. Despite Li Xiang's setback, the domestic pure electric vehicle market continues to expand, with Xiaomi Automobile performing impressively. Xiaomi SU7 began deliveries at the end of March this year and ranked first in the new force sedan list in November.

Image source: Can Stock Photo

At the same time, Li Xiang's stronghold—extended-range products—has also welcomed more players. Recently, Changan Automobile released the second product utilizing its Kunlun extended-range technology, the AITO 12. This model is available in both pure electric and extended-range versions, with the extended-range version becoming the industry's first high-end extended-range sedan. Since the beginning of this year, brands such as Zeekr, XPeng, and IM Motors have all indicated their intention to enter the extended-range market. With more players entering, the pressure on Li Xiang is considerable.

Furthermore, the "price war" in the automotive industry persists. An obvious impact of new energy vehicle brands "trading price for volume" is that it drags down profitability. Although Li Xiang has entered the profitable camp, the impact of the "price war" on it cannot be ignored.

Currently, the elimination race in the new energy vehicle industry continues, and the situation for major automakers is akin to sailing against the current—if you don't advance, you fall behind. Next year, the domestic new energy vehicle industry is bound to face even fiercer competition. How Li Xiang will respond remains to be seen.