Li Auto's Kazakhstan Factory: An Underrated Globalization Experiment

Almaty, 10 AM. A crowd gathered in a newly opened showroom. They weren't looking at Mercedes or BMW, but at an extended-range SUV with the Li Auto badge. When it comes to selling cars, Li Xiang has never been one to play by conventional rules. But this time, he didn't go to Europe or the US; he went to Kazakhstan.

On July 15, the Li Auto L9 officially launched in Kazakhstan. The L9 Livis is priced at 51,900,000 tenge (approx. 740,000 RMB), and the L9 Ultra at 43,990,000 tenge. More importantly, Li Auto initiated its first overseas localized production in Kazakhstan. This isn't just simple vehicle export; it's true capacity going global.

Why Kazakhstan?

Many people's first reaction is: Does Kazakhstan have purchasing power? In 2023, Kazakhstan's per capita GDP was about $13,000, roughly 1.2 times that of China. But more critically, Kazakhstan is the wealthiest market in Central Asia and the most mature springboard for Chinese car brands going global.

Chery, Great Wall, and BYD have been cultivating there for years. Li Auto choosing this timing to enter, specifically with localized production, involves three logics worth noting:

• Tariff Barriers: Central Asian countries impose high tariffs on complete vehicle imports. Localized production can significantly reduce costs. According to local regulations, if the localization rate exceeds a certain proportion, tax exemptions are available.
• Supply Chain Radiation: Kazakhstan has a unique geographic location, straddling the Eurasian continent. From there, it can radiate to the five Central Asian countries, Russia, and even parts of Eastern Europe. The pricing of the Li Auto L9 (740k RMB) already falls into the luxury car segment locally, directly competing with the BMW X5 and Mercedes GLE.
• Geopolitical Buffer: Against the backdrop of the US and EU imposing tariffs on Chinese EVs, Kazakhstan is a relatively friendly manufacturing base. Sino-Kazakh relations are stable, and the local government has strong industrialization demands.

How High is the Technical Barrier?

The core technology of the Li Auto L9 is extended-range hybrid. In Kazakhstan, this technical route has unique advantages.

Regarding charging infrastructure, Kazakhstan has fewer than 2,000 public charging piles nationwide, mainly concentrated in major cities like Almaty and Astana. Extended-range models can drive purely on electricity or refuel with gasoline, perfectly adapting to the current reality of weak local infrastructure.

But the question is: How difficult is it to localize the supply chain for the range extender? Most of Li Auto's core components from its Changzhou factory—the range extender, motor, and battery—come from domestic suppliers. In Kazakhstan, localizing these components takes time and requires upgrading local supporting industries.

[!tip]

Li Auto's localization strategy is "Semi-Knocked Down (SKD)" assembly, not "Completely Knocked Down (CKD)." This means the core tri-electric system is still shipped from China, while low-value-added parts like the body and interior are completed locally. This reduces initial investment risk while maintaining supply chain flexibility.

Valuation Logic: How Much is Overseas Business Worth?

Currently, Li Auto's HK stock valuation is about 200 billion HKD, corresponding to a 2024 PE ratio of about 20x. In this valuation, overseas business is virtually zero. If the Kazakhstan model succeeds, it means Li Auto has found a replicable globalization path.

Exit paths are also worth considering: Once overseas operations mature, Li Auto could spin off its Central Asian operating entity separately and list it on the Kazakhstan Stock Exchange or Astana International Exchange to gain higher valuation premiums. Local capital markets offer policy dividends for manufacturing and new energy companies.

Competitive Barriers: Who is Competing with Li Auto for This Card?

In the Central Asian market, competition among Chinese brands is fierce. BYD, Great Wall, and Chery have long established themselves and launched localized models. But Li Auto's differentiation lies in:

• Product Positioning: As a full-size flagship SUV, the L9 fills the gap for luxury new energy SUVs in Kazakhstan. Its competitors are the fuel versions of the BMW X5 and Mercedes GLE, where Li Auto has obvious advantages in smart cockpits and NOA (Navigation On Autopilot).
• Brand Mindset: Li Auto promotes "Family Tech" locally, a positioning attractive to the Central Asian middle class. The average number of children per family in Kazakhstan is 2.5, making large space a rigid demand.
• Team Execution: Li Auto's localization team in Kazakhstan is led by the former head of Huawei's Central Asia business. This is typical of "using those who know the local area best to fight the hardest battles." I've seen this team's execution; they are indeed strong.

Several Risk Points to Watch

• Exchange Rate Risk: The tenge exchange rate fluctuates significantly, depreciating about 15% against the USD in 2023. Li Auto prices in tenge; if the exchange rate fluctuates wildly, profits will be eroded.
• Policy Continuity: Kazakh President Tokayev's policies lean towards pragmatism, but any geopolitical fluctuations could affect Chinese automakers' local production.
• Local Consumption Habits: Consumer perception of "Chinese brands" in Kazakhstan is still improving. Li Auto needs time for brand education, rather than relying solely on product strength.

From an investment logic perspective, Li Auto's localized production in Kazakhstan won't contribute much profit in the short term and may even drag down overall gross margins. But in the long run, this is a classic operation of "betting on a big market with light assets." If successful, it will become an important template in the history of Chinese automakers' globalization.

![](https://bbs-physixfrontier-com-data.oss-cn-hongkong.aliyuncs.com/collector/article-images/20260724/forum_2732_5yul9ies

Original link: https://www.ithome.com/0/981/375.htm