Li Auto , the nearest rival to Tesla in China’s electric-vehicle (EV) market , has started taking orders for a new five-seat SUV, aiming to expand its customer base as weakening demand for premium cars raises the competitive stakes. The Beijing-based company’s L7, starting at 319,800 yuan (US$47,108), is the third new model the start-up has launched in the world’s largest EV market in just eight months. Orders began on Thursday, with delivery to start in early April. The L7 hits a price point significantly below the 459,800 yuan sticker price on Li Auto’s flagship six-seat L9 SUV , introduced in June, but nearly 60,000 yuan higher than the basic edition of Tesla’s Model Y. “The L7 is aimed at widening the customer base since Li Auto’s electric SUVs have earned a good reputation for their performance among wealthy drivers,” said Chen Jinzhu, CEO of consultancy Shanghai Mingliang Auto Service. “It will help Li Auto narrow its gap with Tesla, though demand for premium EVs is weakening.” Sales of premium electric cars have slowed since late 2022 as mainland middle-class consumers drifted towards cheaper models priced below 200,000 yuan amid worries about their job prospects and wages. This has seen the EVs offered by traditional carmakers, particularly global No. 1 EV maker BYD , gain in popularity. A Huaxi Securities research report said on Thursday that the launch of L7 reflects Li Auto’s improved development capabilities, adding that the five-seat SUV would appeal to families with a budget of about 300,000 yuan who want to own a premium vehicle. The L7 can go as far as 1,315 kilometres on a single charge, using extended-range batteries made by Chinese companies Sunwoda Electric Vehicle Battery and Svolt Energy Technology. Li Auto, along with Shanghai-based Nio and Guangzhou-based Xpeng , is viewed as China’s best response to Tesla. The trio’s cars all feature autonomous driving technology and sophisticated in-car entertainment systems. The L7 will compete against both EVs and combustion-powered cars including Mercedes-Benz’s GLE, Xpeng’s G9 and Tesla’s Model Y. Li Auto, founded in 2015, delivered 15,141 vehicles to buyers in January, 28.7 per cent fewer than in December and 23.4 per cent below January 2022 deliveries, as the weeklong Lunar New Year holiday disrupted sales. Chinese EV maker Nio signals it is in no mood to join an industry price war Tesla delivered 26,843 vehicles in mainland China in January, down 36 per cent from 41,926 units in December, but up 38.8 per cent from the same period in 2022. Tesla cut the prices of its bestselling Shanghai-made Model 3 and Model Y twice between late October and early January, making both cars the cheapest they have been since the company started production in Shanghai in December 2019. The basic edition of the Model Y SUV now sports a price tag of 259,900 yuan, 18.7 per cent lower than the L7. China’s premium EV makers report steep sales plunge after Tesla’s discounts Separately, another Chinese EV start-up, Leapmotor, started selling an extended-range version of its flagship SUV, the C11, on Thursday. The company expects to start delivering the extended-range C11 in the coming months, but neither an exact date nor the price has been announced. The regular-range C11 starts at 179,800 yuan.