As the Lunar New Year holiday of 2025 came to an end, significant changes were observed within the executive structure of Li Auto, a prominent player in the Chinese electric vehicle marketNotably, sources familiar with the company's inner workings reported a strategic restructuring aimed at refining the management of its intelligent automotive strategy.

In a move that authorizes key leadership, the company's highest decision-making body, the Strategic Management Review, approved a comprehensive framework known as the "Intelligent Vehicle Strategy Closed-loop Management Plan." This initiative places Ma Donghui, the current president, at the forefront of steering Li Auto’s related strategic objectives and ensuring their effective implementation.

To facilitate this ambitious strategy, the board of directors has also appointed Ma Donghui as the head of the “Production, Supply, and Sales Joint Committee.” This committee previously reported to the company’s founder and CEO, Li Xiang, but now it seems that the reins have been passed over to Ma for operational decision-making.

The announcement heralded a new approach to managing the entire automotive business under a closed-loop system, enabling deeper collaboration among production, sales, and supply chainsAn insider elaborated that this transition signifies that all decisions regarding vehicle production and sales will funnel through Ma, including sales targets for 2025 and strategies related to various electric modelsLi Xiang remains involved in core decision-making processes, particularly concerning the automotive business.

Such a strategic shake-up was anticipated after a pre-holiday evaluation of the company’s management structure, emphasizing decision-making lines rather than reporting hierarchies, underscoring a distinction that holds significant weight in a company’s operational dynamics.

Delving into the core reasoning behind these changes, internal sources outlined that the board believes the automotive business has reached a level of maturity

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With electric vehicle products taking solid shape, Li Xiang is being encouraged to allocate his focus on artificial intelligence (AI) research, a field he views as paramount for the company's future.

The Production, Supply, and Sales Joint Committee, established at the end of 2022 amid fierce competition and market pressures, is one of several changes aimed at transforming Li Auto into a matrix-style organizationThis approach is seen as crucial in achieving ambitious revenue goals within the intelligent automotive sector.

Following a two-year operational tenure, the committee serves as a crucial mechanism for efficiency, facilitating collaboration across various departments such as product development, supply chain logistics, and salesIt functions as a platform for maintaining communication and ensuring all involved teams are aligned in their objectives.

Industry experts emphasize the complexity of automotive production, where issues in any branch can significantly delay product deliveryThe collaborative nature of the Joint Committee aims to mitigate such risks by bringing key decision-makers together to analyze and devise solutions cohesively.

This cooperative ethos has borne fruit over the years, as Li Auto continues to iterate on its operations and product strategiesFor instance, AI technology integration, enhancing product value, and improving user experience have become focal points, underscored by the company’s strategic goal of reaching a delivery milestone of 500,000 units by the end of 2024.

In the year 2024, Li Auto achieved a landmark milestone with total deliveries reaching 504,500 vehicles, becoming the first new energy vehicle manufacturer to achieve this feat

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The rivalry in the sector is palpable, with competitors such as NIO and XPeng delivering significantly fewer units during that period, which has implications for brand positioning and market share.

As the automotive operations become more streamlined, Li Xiang’s attention shifts focus, revealing his broader ambitions in AI, a domain he regards as the most promising application of artificial intelligence in the realm of physical productsHis philosophy posits that while hardware serves as the foundation, it cannot be the terminal goal; failing to expand beyond a hardware-centric company would represent missed opportunities in a continuously evolving market.

This relentless pursuit of advancement echoes through the organizational evolution of Li AutoThe company began learning from Huawei’s organizational practices back in 2021, starting with the introduction of an Integrated Product Development (IPD) process tailored to their needs.

The shift involved establishing Product Development Teams (PDT) for each vehicle model, aiming to raise managerial accountability over individual projects, with model leads acting as their respective CEOsBy the end of 2022, the company took a decisive step towards a matrix organization, a major transition informed by insights drawn from Huawei's extensive methodologies.

Following Huawei’s framework, which merges vertical departments with horizontal management, Li Auto outlined seven primary business processes aimed at enhancing overall operational efficacyThese include critical areas such as product development, supply chain management, and financial transitions that are instrumental in shaping the company’s trajectory.

By mid-2023, the company successfully operationalized these key processes, effectively creating defined pathways for project management and lifecycle coordination.

The latter half of 2023 marked the implementation of the second phase of reform, focusing on deepening the integration of each main process and ensuring an overarching view that encompasses every stage from product development to after-sales service.

With such profound revamps in place, the goal of completing the interlocking functionality of all major processes was achieved by the end of 2024, positioning Li Auto to remain competitive in an ever-evolving market landscape.

By spring 2024, a notable organizational restructuring saw the dissolution of the Product Department, streamlining teams under product lines that cater to differing price segments

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