Encoder-free architectures have been preliminarily explored in the 2D Large Multimodal Models (LMMs), yet it remains an open question whether they can be effectively applied to 3D understanding scenarios. In this paper, we present the first comprehensive investigation into the potential of encoder-free architectures to alleviate the challenges of encoder-based 3D LMMs. These long-standing challenges include the failure to adapt to varying point cloud resolutions during inference and the point features from the encoder not meeting the semantic needs of Large Language Models (LLMs). We identify key aspects for 3D LMMs to remove the pre-trained encoder and enable the LLM to assume the role of the 3D encoder: 1) We propose the LLM-embedded Semantic Encoding strategy in the pre-training stage, exploring the effects of various point cloud self-supervised losses. And we present the Hybrid Semantic Loss to extract high-level semantics. 2) We introduce the Hierarchical Geometry Aggregation strategy in the instruction tuning stage. This incorporates inductive bias into the LLM layers to focus on the local details of the point clouds. To the end, we present the first Encoder-free 3D LMM, ENEL. Our 7B model rivals the state-of-the-art model, PointLLM-PiSA-13B, achieving 57.91%, 61.0%, and 55.20% on the classification, captioning, and VQA tasks, respectively. Our results show that the encoder-free architecture is highly promising for replacing encoder-based architectures in the field of 3D understanding. The code is released at https://github.com/Ivan-Tang-3D/ENEL