The Third Act: Why Li Xiang Left His Public Company to Build a Car from Scratch
Key Takeaways
- The most driven entrepreneurs are often motivated by the challenge of creation, not just the comfort of success.
- Identifying a specific, underserved user niche (like large Chinese families) can be a more effective strategy than trying to build a product for everyone.
- Sometimes, to build something truly new, you have to leave the constraints of your previous success behind.
Prologue: The CEO's Frustration
From his position as CEO of Autohome, Li Xiang had a unique vantage point on the global auto industry. He had access to more data on consumer preferences than almost anyone. He spent his days talking to car executives, visiting factories, and test-driving every new vehicle that hit the market. And he was growing increasingly frustrated.
He saw an industry that was slow to innovate, particularly when it came to software and the in-car experience. He saw electric vehicles that were either small, impractical city cars or expensive luxury sedans that didn't fit the needs of the average Chinese family.
Most importantly, he saw a massive, underserved market. As a new father himself, he was acutely aware of the needs of the modern Chinese family. They needed space for kids and grandparents. They took long road trips during national holidays, making range anxiety a major concern. Yet, the EV market was offering them few, if any, good solutions.
"I could see the perfect product in my head," he would later say. "But no one was building it." The frustration grew into a conviction. If the traditional automakers wouldn't build the car he knew his users wanted, he would have to build it himself.
Act I: The Point of No Return
The decision to leave Autohome was not a sudden impulse. It was a gradual realization that his heart was no longer in the media business. He had become a manager of a large, successful company, but his passion was for creation.
He spent months validating his idea. He talked to hundreds of potential users, confirming his hypothesis about the needs of Chinese families. He quietly began to assemble a small, core team of engineers and designers, funding the initial explorations with his own money.
In mid-2015, he made the formal decision. He resigned as President of Autohome, the company he had dedicated a decade of his life to building. It was a shock to the industry. Why would a successful public company CEO walk away to dive into the brutal, cash-burning world of car manufacturing?
For Li Xiang, the logic was simple. "Autohome was my second child," he explained. "I had raised it to adulthood. It was time for me to have a third child."
Act II: A Different Kind of Startup
In July 2015, he officially founded his new venture, initially called CHJ Automotive, which would later be rebranded as Li Auto. From the beginning, it was a different kind of EV startup.
While rivals like Nio and XPeng were positioning themselves as "China's Tesla," chasing the high-end, pure-electric market, Li Xiang took a deliberately pragmatic and contrarian approach.
His target customer was not the tech early adopter, but the mainstream family. His primary goal was not to build the fastest or flashiest car, but the most practical one.
And most controversially, his first product would not be a pure battery-electric vehicle. To solve the problem of range anxiety head-on, he decided to build an Extended-Range Electric Vehicle (EREV). The car would be powered by electric motors, but it would also have a small, efficient gasoline engine on board that acted as a generator to recharge the battery.
This EREV strategy was criticized by many EV purists, who saw it as a transitional, impure technology. But Li Xiang was not an idealist; he was a product manager obsessed with solving user problems. And for his target customer, range anxiety was the number one problem.
Epilogue: The Founder's Final Act
Li Xiang's decision to leave Autohome was the ultimate bet on himself. He was trading a comfortable present for an uncertain but exhilarating future. He was moving from the world of clicks and pageviews to the world of supply chains, factories, and physical products.
It was a move that required not just courage, but a deep self-awareness. He knew that his true passion was not in managing a mature business, but in the chaotic, all-consuming process of creating something from nothing.
With the founding of Li Auto, the high school dropout from Shijiazhuang was embarking on his third, and he has said, final, act as an entrepreneur. He was no longer trying to build a successful company. He was trying to build an enduring one, a company that would not just sell cars, but would redefine the future of the family car for a generation.