Li Auto Establishes Vehicle Services Firm in Shanghai With 1B Yuan

Nasdaq-listed Chinese new energy vehicle company Li Auto has recently set up a new automobile services company in Shanghai. The registered capital of the firm has reportedly reached 1 billion yuan ($140.4 million).

According to public information, the subsidiary was established on September 16, 2022. The firm’s legal representative is Liu Jie, and its business scope includes passenger car rental services and information consulting services (excluding licensing information consulting services). It is indirectly owned by Leading Ideal HK Limited, an affiliate firm of Li Auto.

Shen Yanan is the executive director of the new company. Shen is the second key person at Li Auto after the founder, Li Xiang. Since 2015, Shen has served as President of the company, mainly responsible for the overall strategy, business development, supply chain management, sales and marketing of the company. He built a complete supply chain system for Li Auto. According to public information, there are 117 affiliated enterprises under Shen’s name.

On September 14, news that a Zhejiang subsidiary of Li Auto had closed caused heated discussion. According to commercial data platforms, the firm was established on November 9, 2020, with a registered capital of 1 billion yuan, and was wholly owned by Beijing Chehejia Information Technology Co., Ltd. (an affiliate of firm of Li Auto), and the legal representative and executive director is also Shen Yanan.

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Recently, Shen has attracted notice due to his continuous selling of Li Auto stocks. During the four days from September 2 to September 6, Shen reduced his shares twice, with a total reduction of 1 million shares, cashing out a total of $13.1638 million.

Regarding Shen’s selling of Li Auto stocks and the closing of the Zhejiang subsidiary, Li Auto responded to Chiense media at that time, saying that the firm in question was not actually operating, and that Shen Yanan’s sale of stocks was for personal reasons.

Recently, Li Auto has not performed well. On August 15, the company released its second-quarter financial report, showing that revenue in the period was 8.73 billion yuan, up 73.3% year-on-year, of which vehicle sales revenue was 8.48 billion yuan, up 73.0% year-on-year. Also in the second quarter, the operating loss of Li Auto was 978 million yuan, with a net loss of 618 million yuan. Both reached record highs, and the company has now seen more losses this year than in all of 2021.