(Yicai Global) Feb. 16 -- China's Li Auto is joining its rivals in adding output while the electric vehicle startup is likely to build its third domestic plant in Chongqing amid surging sales, according to analysts.

Li Auto's unit Chezhiyu Automobile Industry has recently purchased land use rights in the southwestern city for around CNY431 million (USD68 million), the National Business Daily reported today, citing data from the website of Chongqing Public Resources Trading Supervision.

The new energy vehicle maker has declined to comment on the matter, the news outlet added.

The car company has recorded soaring demand this year. Li Auto more than doubled its deliveries to almost 12,270 units last month from a year ago.

The Beijing-based company already has links with Chongqing. It gained the qualifications to manufacture NEVs in the city by acquiring Chongqing Lifan Automobile for CNY650 million in 2018. Moreover, Li Auto penned a cooperation framework agreement with the municipal government in mid-December.

Currently, Li Auto has two plants. One is in eastern Jiangsu province's Changzhou and the other one is being upgraded in Beijing. The pair's total capacity is expected to reach 300,000 vehicles per year.

The plans are big. China will sell more than eight million smart electric cars by 2025, and Li Auto should account for more than a fifth of the domestic market share, Chief Executive Li Xiang said in an internal letter earlier. The firm aims to become China's biggest NEV maker with annual sales of 1.6 million units, he added.

Li Auto's domestic rivals, Nio and Xpeng Motors, are also expanding their outputs. Guangzhou-based Xpeng has begun constructing plants in the southern hometown and in central China's Wuhan to produce more than 300,000 vehicles a year.

Shanghai-based Nio has teamed up with Anhui Jianghuai Automobile Group on manufacturing. The pair's Hefei factory finished the first phase of upgrading last October. The project should be ready by June to lift the facility's capacity to 240,000 units per year.

Editor: Emmi Laine, Xiao Yi