Li Auto Livis Day: AI Reshapes the Definition of the Automobile, Short-Term Focus on L8/L9 Orders

Overview

This report is based on the content of Li Auto’s Livis Day summit, analyzing its strategic positioning and commercialization prospects in the field of artificial intelligence. Morgan Stanley views Li Auto’s strategic inflection point as a fundamental redefinition of the automobile—transforming it into a single platform that integrates an electric vehicle, a professional driver, an AI supercomputer, and a personal assistant, capable of independently executing complex tasks for users. While the technology showcase has heightened market attention on the L9 Livis and provided investors with a clearer view of Li Auto’s AI ambitions, the report emphasizes that, in the short term, the primary focus should remain on order flows for the L9 and the forthcoming L8 models, with OTA upgrades serving as an important catalyst. Looking ahead, the firm is optimistic that Li Auto will develop additional AI use cases across vehicles and hardware such as AI glasses, paving the way for a robust monetization strategy aligned with its embodied intelligence roadmap.

Core views

At the heart of Li Auto’s strategic transformation is the full-scale implementation of ‘Embodied AI.’ The report highlights that Li Auto is leveraging its proprietary AI chips and cloud-edge foundational large models to power the Livis Agent system, enabling it to surpass human drivers in physical capabilities and reaction speed. In autonomous driving, combined with wire-control chassis technology and the latest model iterations, Li Auto expects to achieve performance comparable to Tesla FSD V14 by Q4 2026, with response times outpacing those of human drivers. Beyond driving capabilities, Li Auto’s AI ambitions extend to broader everyday scenarios. The report argues that the system will move beyond mere driver assistance to function as an AI assistant, supporting users in itinerary planning, event organization, and other daily activities, thereby building a richer AI ecosystem. This shift from ‘means of transportation’ to ‘personal assistant’ represents Li Auto’s key differentiator from traditional automakers. In terms of investment dynamics, the report distinguishes between short-term and long-term priorities. In the short term, while the tech demo may boost sentiment, the underlying fundamentals continue to be driven by the product cycle—namely, deliveries of the L9 Livis version and the launch of the L8 model—while regular OTA updates serve as an additional catalyst for share price appreciation. Over the longer term, as embodied intelligence matures, Li Auto is poised to expand AI applications across in-vehicle systems and new devices like AI glasses, opening up fresh revenue streams and monetization pathways.

Analysis framework

The firm’s analytical framework follows a three-tiered structure: qualitative strategic assessment, technical validation, and quantitative financial/order analysis. First, at the strategic level, the core message of the Livis Day conference is distilled into the central narrative of ‘the vehicle as a general-purpose embodied intelligence agent,’ evaluating its long-term competitive moat. Second, technical parameters are compared—such as benchmarking against Tesla FSD V14, assessing the computational power of the in-house chip, and measuring the responsiveness of the wire-control system—to validate the feasibility and technological leadership of this strategy. Finally, the analysis returns to the capital markets’ most sensitive short-term drivers, emphasizing that, at this stage, macro-level narratives must give way to the tangible contributions of specific model orders (L8/L9) and software iterations (OTA) to the company’s fundamentals, reflecting the firm’s approach of balancing long-term vision with near-term execution when evaluating highly tech-oriented auto stocks.

Methodology notes

• Industry/Industrial Analysis FrameworkUpstream–Midstream–Downstream Value Chain Transmission

  Upstream: Proprietary Chips & Large Models -> Midstream: Whole-Vehicle Intelligent Integration -> Downstream: AI Ecosystem Applications & Monetization

  The report does not focus solely on vehicle manufacturing but traces the technology chain, examining how Li Auto leverages its upstream AI chips and foundational models to empower midstream vehicle intelligence and ultimately generate downstream applications such as AI assistants and AI glasses. This helps readers understand the value chain differences between tech-driven and traditional automakers.

• Event博弈and Behavioral FinanceExpectation Gap/Expectation Management

  Separation between the expectations generated by the tech demo (long-term) and actual order inflows (short-term reality)

  The report cautions investors about the timing mismatch in market expectations: while the tech demo showcases long-term AI potential (expanding valuation upside), short-term stock price momentum still hinges on real-world L8/L9 order data. Understanding this disconnect—and the interplay—between the ‘long-term story’ and ‘short-term results’ is crucial for navigating trading dynamics at different stages.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• LiAuto Inc. (2015.HK)

  Primary coverage target, benefiting from the AI strategy showcased at Livis Day and the sales of the L-series models

  Strengths

  Proprietary AI chips and cloud-edge large model foundation; clear embodied intelligence strategy; imminent L9/L8 product cycle

  Weaknesses

  Faces risks from short-term macroeconomic volatility and intensifying industry competition

  Comparison

  The report notes benchmarking against Tesla FSD V14, highlighting the challenge of competing directly with the world’s strongest autonomous driving player

  Risks

  Unexpected disruptions due to component bottlenecks; delays in model launches; slowing growth in vehicle sales

Key data

• Target PriceHK$83.00Implies 46% upside from the current price
• Current Stock PriceHK$56.85As of the close on June 15, 2026
• Analyst RatingOverweight (超配)Morgan Stanley maintains its rating
• FSD Capability Benchmark TimeQ4 2026Expected to reach parity with Tesla FSD V14
• Market CapitalizationRmb 98,878.3 mnApproximately Rmb 98.8 billion

Impact & implications

If Li Auto successfully executes its embodied intelligence strategy, it will transform from a pure-play automaker into an AI ecosystem platform provider, potentially reshaping its valuation framework. In the short term, the performance of L8/L9 orders will directly determine the resilience of its share price, while continuous OTA optimization is key to maintaining user stickiness and the brand’s tech-savviness. Over the longer term, the company’s ability to monetize AI across in- and off-vehicle scenarios will define the trajectory of its second growth curve.

Risks

• Unexpected disruptions caused by component shortages
• Delays in model launches
• Slowing growth in vehicle sales

What to watch

• Order inflows for the L9 Livis and the upcoming L8 model
• Functional improvements delivered through subsequent OTA upgrades
• Progress in deploying the vehicle across additional AI use cases
• The commercialization roadmap for embodied intelligence in new devices such as AI glasses