Li Auto has set aggressive sales targets for the years to come and will ramp up R&D to stay competitive.

Li Auto is targeting to see annual sales of at least 3 million vehicles in 2028, nearly double its previously announced 2025 target of 1.6 million vehicles.

The extended-range electric vehicle (EREV) maker mentioned the target at a strategy meeting late last month, arguing that China's new energy vehicle (NEV) penetration rate will reach 90 percent by 2028.

The company's management believes that if only four or five players in China's NEV industry win out by then, BYD, Tesla, and Huawei will be among them, and that Li Auto will need to sell more than 3 million vehicles a year to be in the game, .

To achieve that goal, Li Auto's SOP (start of production) timeline has been planned through 2027, and it expects to launch its next-generation technology platform with fully autonomous driving capabilities in 2026.

Li Auto's four-day strategy meeting saw the company study the R&D cases of Tesla and BYD, and reached a key consensus -- to expand R&D spending.

Li Auto has more than RMB 70 billion ($9.5 billion) in cash and needs to turn that money into sustained competitiveness, the report said, citing several people who attended the meeting.

The company is looking at smart driving with unprecedented importance and spent a full day during the strategy session discussing how to invest in it.