Li Auto Inc‘s (NASDAQ:LI) ambition extends beyond building electric vehicles. During its second quarter earnings call on Wednesday, the Chinese automaker revealed the strategic philosophy behind its growing investment in proprietary chips and batteries, saying it wants to emulate Apple Inc. and Huawei by controlling the technologies that matter most—while making clear it has no intention of replacing partners like Nvidia Corp (NASDAQ:NVDA) and CATL.
Li Auto Says In-House Technology Is About Control, Not Replacing Suppliers
As competition in electric vehicles increasingly shifts toward software, artificial intelligence and vertically integrated technology, Li Auto says owning key components will become a defining competitive advantage.
That doesn’t mean the company is turning its back on existing suppliers.
CFO Johnny T. Li addressed that perception directly. “I need to emphasize, by choosing to develop these components in-house doesn’t mean that our suppliers’ products aren’t great.”
He then singled out two of the industry’s biggest technology leaders.
“We developed our in-house Mach M100 chips. That doesn’t make NVIDIA any less respectable as the best chip company in the world. As we develop our in-house batteries, that doesn’t make CATL any less respectable as [one of] the best battery companies. Well, CATL as well as many other brands, which are all great battery brands. That doesn’t make them any less respectable.”
The distinction matters. Rather than replacing leading suppliers, Li Auto says its objective is to own more of the technology stack that differentiates its vehicles over the long term.
Why Li Auto Thinks Apple and Huawei Offer the Better Blueprint
Management argued that the auto industry is entering an era where intelligent software and hardware integration will matter as much as mechanical engineering.
Earlier in the call, executives said that chips and batteries will be the most important competitive advantage. The company has already developed its own autonomous driving chip, battery cells, battery packs, battery management systems and thermal management technologies, with Li Auto-branded batteries expected to begin rolling out across its vehicles during the second half of the year.
That strategy led to perhaps the most revealing comment of the earnings call.
Li Auto is building the technology internally, management said, to be “like companies like Apple and Huawei” — firms that keep their most critical components in their own hands.
The comparison is notable because Apple and Huawei have both spent years designing critical technologies internally, allowing them to tightly integrate hardware and software while reducing reliance on third-party suppliers. Li Auto says it is pursuing a similar philosophy as intelligent vehicles become increasingly AI-driven.
Investment Takeaway
Li Auto’s message wasn’t that Nvidia or CATL are becoming less important. In fact, management explicitly said the opposite. The hidden insight is that Li Auto increasingly views long-term competitiveness through the lens of technology ownership rather than vehicle manufacturing alone.
For investors, the key question isn’t whether the company can replace industry leaders—it is whether its investment in proprietary chips, batteries and software can create the same kind of durable competitive moat that companies like Apple and Huawei have built over time.
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