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, is the third new model the start-up has launched in the world’s largest EV market in just eight months. Orders began on last 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.

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.

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.