The automotive industry is currently undergoing a significant transformation, and it's evident that the future is intertwined with the concepts of electrification and intelligenceWhile many leaders within the industry have voiced similar sentiments, Li Xiang, CEO of Li Auto, articulated a more complex vision during the Ideals AI TalkHe posited that the journey towards vehicle intelligence transcends mere software enhancements; it encapsulates a genuine evolution towards artificial intelligence (AI). He emphasized the necessity of merging linguistic intelligence with spatial intelligence to forge a comprehensive Visual Language Action Model (VLA). This innovative approach seeks to redefine how vehicles interact with their environments and their occupants.

Li's insights stem from a reflective stance on his company's journeyIn his address, he remarked on the lessons learned throughout his entrepreneurial endeavors

Previously, he stated, he had sacrificed the broader picture for singular achievements, likening it to forsaking an entire forest for a single treeThis time, however, he is adamant about pursuing a more expansive vision—embracing the "forest" of possibilitiesWith an impressive annual research and development budget of one billion yuan devoted to artificial intelligence domains such as autonomous driving, academic discourse surrounding theories of intelligence, and new industrial applications, Li Auto is poised to make substantial advancements in vehicle intelligence.

Remarkably, Li Auto stands as one of the few profitable new energy vehicle companies globally, joining the ranks of industry giants such as BYD, Tesla, and CeerDespite its current success, Li Auto has navigated a challenging past; prior to 2020, it was often overlooked as a serious contender in the automotive sector, with skeptical suppliers questioning its viability

Nevertheless, the recent Ideals AI Talk shed light on the strategic decisions and research-driven focus that have transformed Li Auto into a top player in sales among newer automotive manufacturersLi spoke candidly about the evolution of his company's offerings and its future trajectory in the AI space.

Interestingly, while numerous companies jumped into the market of intelligence without a solid foundation in electrification, Li Auto took a more cautious approach, establishing itself as a latecomer in the realm of vehicle intelligenceLi explained that due to the lack of initial investment—stemming from the skepticism surrounding the company—they had opted to prioritize developing robust automotive products before pursuing innovative technologiesFollowing its IPO in 2020, Li Auto saw an influx of capital, enabling it to delve deeper into areas like smart vehicle controllers and silicon carbide technologies, ultimately leading to self-developed motors.

Jeffing ahead, Li Auto is now gearing itself towards an ambitious foray into the AI sector

The CEO outlined a three-stage framework for their foundational AI capabilitiesThe first stage—"Augment My Abilities"—aligns with Level 3 autonomous driving, where AI operates under human commands but with ultimate responsibilities remaining with the driverIn the second stage, dubbed "Be My Assistant," AI will be expected to independently fulfill tasks based on user specifications without the need for human oversightThe third stage, known as "Silicon-Based Family Members," envisions a future where AI understands and caters to household needs without explicit human commands—akin to having a family member assist in home management.

Looking forward, Li envisions a synthesis of spatial intelligence (autonomous driving models) with linguistic intelligence (large language models), creating an AI capable of comprehensively understanding real-world contexts similar to human cognition

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This progressive vision necessitates not only competition with other manufacturers but also a commitment to placing Li Auto among the frontline players in the AI domain, particularly in achieving the top position in China's automotive intelligence sector.

Interestingly, Li suggested that human memory itself could serve as a foundational model for AI, proposing that a large model be trained using human experiences and recollectionsSuch thoughts hint at an ambitious and, at times, radical vision for the future—where the line between human consciousness and digital existence blurs, resembling concepts often depicted in science fiction.

When addressing the competitive landscape surrounding AI products, Li pointed to the existing user base of around one million individuals as an invaluable assetThe strategy involves facilitating users’ experiences with AI applications on their smartphones, allowing for an initial taste of the advancements set to come with their vehicles

He perceives the current standing as positioning Li Auto more as a participant rather than a pioneer in base models but aims to elevate its presence into the top rankings through targeted investments and advancements.

Bearing in mind this vigorous commitment to emerge as an AI-centric organization, the stakes go beyond mere rhetoric; Li Auto is investing significant resources into research and development, while also articulating clear objectives regarding the potential trajectory of the sectorThe past success of Li Auto stems from a foundational philosophy built on understanding industry dynamics, leading Li to ascertain that automotive development and AI are increasingly interdependent, with the ultimate goal being the realization of "silicon-based family members."

In a concurrent dialogue, Jensen Huang, CEO of NVIDIA, echoed a similar sentiment regarding future automation trends, predicting that the key drivers of mass production will include self-driving cars, drones, and humanoid robots, further reinforcing the notion that vehicles will act as pivotal vessels for AI advancements.

Nevertheless, amidst a rapidly evolving landscape, hardware continues to be fundamental for Li Auto

During the session, Li disclosed several hardware initiatives currently in the pipeline.

Beyond the realm of personal-use electric vehicles, automotive companies, in general, are directing attention towards two major hardware enterprises: Robotaxi solutions and humanoid robotsLeading enterprises such as Tesla, Baidu, and Google have already unveiled their offerings in the Robotaxi sectorThere’s a prevailing narrative suggesting that once Robotaxi becomes commonplace, private car ownership could face a declineHowever, Li countered this notion by asserting that Li Auto's mission is to construct a mobile home, diverging from the Robotaxi model as it contradicts their core philosophy.

On the frontier of humanoid robotics, many companies are engaging in this venture, including manufacturers such as BYD, Tesla, and XPeng, with some even deploying humanoid robots within their production facilities

Li expressed confidence that Li Auto will ultimately develop humanoid robots, but not before attaining substantial progress in Level 4 autonomous driving capabilitiesHe emphasized that if they are unable to resolve this core issue, the functional capacities of any forthcoming humanoid robot will be necessarily limited.

For Li Auto, achieving the goal of a "silicon-based family" is an integral aspect of their missionThe successful implementation of humanoid robotics would signify a leap towards fulfilling AI's potential in managing household tasks and providing assistance in domestic environments.

The pursuit of humanoid robots imposes elevated standards on AI capabilities and technical proficiencyA lack of sophisticated AI precludes a robot's ability to analyze sensory data and perform requisite tasks effectivelyLacking robust foundational technology in motors, environmental perception, and balance control will hinder efforts to realize practical and user-friendly humanoid robotics.

Although the Ideals AI Talk centered predominantly on AI technology, glimpses of automotive innovation were also shared

A recent incident involving Li’s purchase of a Ferrari raised eyebrows online, with skeptics questioning the appropriateness of an automotive CEO investing in competitor productsLi responded that his acquisition was purely for experiential purposes—gaining insight into Ferrari’s manufacturing processesHe even hinted at a potential 50% chance of Li Auto designing an engaging sports car in the future.

Despite the commendable successes, Li Auto's current product offering consists solely of four SUVs and one MPV, which seems limited compared to competitorsWhile high-end SUVs dominate the market, the exclusion of sedans and other vehicle types could alienate a significant customer baseThe prospect of launching a sports car akin to a Ferrari could resonate well with fans and broaden Li Auto’s product coverage.

Ultimately, automotive production remains the lifeblood of Li Auto

Whether pursuing AI expansions or developing humanoid robotics, the automotive sector sustains the financial foundation critical for future endeavorsThe revenue and profits generated from their current lineup fortify the exploration of new business ventures.

As we approach 2025, a pivotal year for Li Auto, the blueprint ahead appears increasingly definedPresently, the goal is to enhance vehicle sales while simultaneously reinforcing AI initiativesFor 2023, Li Auto reported a remarkable net profit of 11.704 billion yuan, marking its position as the third global electric vehicle manufacturer to achieve profitability, following BYD and TeslaThe substantial volume of 441,995 vehicles delivered in 2024 positions Li Auto firmly at the forefront of the new automotive movement.

However, under the surface, Li Auto faces challengesPlans to introduce a series of pure electric MPVs and SUVs were delayed, originating from the commercial underperformance of its MEGA model

With the surge in hybrid electric vehicles from erstwhile pure electric manufacturers, the landscape is shifting, creating a renewed acknowledgment of the potential of range extensionsStill, pure electric cars hold crucial implications for Li Auto's market standing, which makes their long-term commitment to launching the postponed electric SUV lineup imperative in 2025.

Looking ahead, Li Auto’s strategy for 2025 is clear: develop and iterate existing electric vehicles while simultaneously re-entering the electric vehicle market with new offerings to diversify their rangeWhile the MEGA model will undoubtedly undergo revisions following its rocky launch, reintroducing electric models will likely not take place until 2025.

The anticipated entry of a sports car appears uncertain for the upcoming year due to the necessity for comprehensive user feedback and market research