(Yicai Global) June 14 -- Li Auto studies its competitors closely and this helps it grow, the chief executive officer said after the Chinese electric car startup was forced to stop producing its first model, the Li One, after sales collapsed following the release of tech giant Huawei Technologies’ Aito M7, which boasts better performance and a lower starting price.

Li Auto had no choice but to pull production of the Li One in October last year, after Huawei and auto manufacturer Seres Group released their second model in the Aito series in July, Li Xiang said on Weibo yesterday.

This resulted in losses of CNY1 billion (USD139.6 million) in a single quarter, which the carmaker paid out in compensation to suppliers, and many experts left the firm, Li said. The Beijing-based company then brought forward the release of the Li Auto L8 by two months.

Li Auto has never encountered such a strong rival before and it will not have the power for a long time to fight back, Li said.

Priced between CNY319,800 (USD44,633) and CNY379,800, the Aito M7 has the same positioning in the market as the Li One but its starting price is CNY30,000 (USD4,187) lower. Huawei and Chongqing-based Seres shifted 4,746 units last September and 5,000 in October.

Li Auto, though, is bouncing back and shipped 28,300 vehicles in May, a big improvement on the 4,571 autos it delivered in August last year.

Li Auto learns a lot from competitors which helps it to grow faster, Li said. By studying German auto giants Mercedes-Benz, BMW and Audi, the carmaker was able to boost its sales in Shanghai to a yearly peak within one month, and quintupled its sales in Beijing in the first quarter, he added.

Industry leader BYD’s organizational capability and operating skills are directly proportional to its size and are far superior to other companies, Li added.

Editor: Kim Taylor