Original link: https://www.latepost.com/news/dj_detail?id=1647
Under the price war, Ideal handed over a good report card.
On May 10, Li Auto released its financial report for the first quarter of 2023. In the first quarter of the year, Ideal delivered a total of 52,584 vehicles, more than the sum of Weilai (31,041) and Xiaopeng (18,230). Before the US stock market closed, Li Auto’s share price rose 13.9% to US$28.22, with a total market value of approximately US$29.4 billion.
Ideal’s revenue in the first quarter was 18.79 billion yuan, an increase of 96.5% year-on-year, and an increase of 6.4% compared with the fourth quarter of last year. The gross profit margin of vehicles was 19.8%, a year-on-year decrease of 2.6%, basically the same as that of the previous quarter (20.0%). Ideal said that the fluctuation in gross profit margin was mainly caused by the difference in product mix between the two quarters.
Ideal’s net profit in the first quarter was 934 million yuan, achieving the second consecutive single-quarter profit. The profit in the fourth quarter of last year was 265 million yuan, an increase of 252% from the previous quarter.
The increase in product sales and good gross profit margins have allowed Ideal Auto’s cash reserves to continue to increase, reaching 65 billion. In the fourth quarter of last year, ideal cash was 58.45 billion yuan, Weilai was 45.5 billion yuan, and Xiaopeng was 38.25 billion yuan.
Compared with profitability and cash flow, Ideal CEO Li Xiang said that he values market share more. Ideal’s goal in the second quarter is to deliver 81,000 vehicles, and the delivery volume in June will reach 30,000 units, and its share in the new energy market above 200,000 yuan will increase from 11% to 13%.
At present, the new energy vehicle market of more than 200,000 yuan is mainly occupied by Tesla and BYD. In the first quarter of this year, Tesla Model 3 and Model Y sold 42,000 and 94,000 units respectively. BYD Han, Tang, Seal, and Frigate sold 37,000, 32,000, 19,000, and 18,000 units respectively.
In order to sell more cars, Ideal is rapidly opening stores in third- and fourth-tier cities, with the goal of opening a total of 410 stores by the end of the year. As of the end of April, Ideal had 302 stores, NIO had 369 stores, and Tesla had 278 stores.
Li Xiang believes that the current market performance in the new first-tier cities is the best, but the potential of the third- and fourth-tier cities is huge. In the future, the ideal will cover almost all fourth-tier cities, and follow the example of BBA (Mercedes-Benz, BMW, Audi) to open comprehensive stores in cities with good performance, and open stores in automobile cities in fourth-tier cities.
Li Xiang said in an interview with “Later Auto” last year that he ideally wants to seize the traditional luxury car market, so the store opening strategy is also in line with BBA. “The effective coverage of BBA is about 500 stores and 200 cities. We can achieve the same coverage as BBA by the end of next year at the earliest.” Li Xiang said.
In addition to opening more stores, Ideal will also upgrade small stores, adjust channel management methods, and delegate power from the original regional system to each province and even storefronts. He said that since the adjustment this year, the output of single store and single person has increased, and the conversion rate has also increased.
Opening more stores will allow more people to have access to ideal products, but in order to gain a firm foothold in the market above 200,000 yuan, Ideal needs to have products suitable for this market.
Ideal currently has three models, all priced above 300,000 yuan. The flagship SUV Li L9 is priced at RMB 459,800; the replacement model of Ideal ONE, the L8, is priced at RMB 339,800-399,800; the only five-seat SUV Li L7 is priced at RMB 319,800-379,800. The L8 and L7 are currently the ideal sales force, accounting for 26.8% and 40.8% of the total sales in April, respectively.
Ideal plans to form a product layout of “1 super flagship + 5 range-extending electric models + 5 high-voltage pure electric models” for the market above 200,000 yuan by 2025, but at present, Ideal does not have 200,000-300,000 yuan. product. This year, Ideal will release its first pure electric vehicle (code-named W01), which is based on an 800V high-voltage platform and equipped with Ningde Kirin 4C batteries. It is the most expensive pure electric vehicle product.
In 2019, when the Ideal ONE was just launched, it was the only extended-range electric vehicle on the market. With its large space, six seats, and city electricity and long-distance travel scenarios, it quickly opened up the market. Now, this experience has also been learned by many car companies. Both BYD and Great Wall are vigorously promoting hybrid technology. Huawei Wenjie and Dongfeng Lantu have launched extended-range electric vehicles that are benchmarked against ideals. Wenjie M7 and M9, and Great Wall’s Lanshan Big Six are directly benchmarked against Ideal L8. , L9 development.
The Great Wall Wei brand Lanshan DHT-PHEV started to be delivered last month. As a large six-seater SUV with hybrid power, the price is 273,800-308,800 yuan, 66,000 yuan lower than the ideal L8. At the financial report conference, Li Xiang was also asked about the competition with the “Northern Automobile Enterprises”. He replied: “Similar models of Northern Automobile Enterprises did not rank in the top 20, while the orders for Ideal L8 continued to grow.”
Li Xiang said that the biggest competitor of Ideal L8 is Tesla Model Y. In the first quarter of this year, 280,000 units of this car were sold worldwide, and a total of 94,000 units were sold in China. At the beginning of the year, Tesla also triggered a price war in the Chinese auto industry. The starting price of the Model Y was reduced to 261,900 yuan (up to 263,900 yuan on May Day).
Ideal did not directly participate in the price war, but launched the Air version of L7 and L8 in February this year. The configuration minus the air suspension, the starting price is 20,000 yuan lower than the original version. Li Xiang said that the introduction of L7 Air and L8 Air in May brought a 20% sales growth for Ideal.
In addition, the terminal discount price of Ideal ONE, which is about to withdraw from the market, has dropped to around 270,000 yuan. According to the data disclosed by Ideal, in the past 4 months, the sales volume of Ideal ONE was 5,691 units. CFO Li Tie said that the sales of Ideal ONE led to a decline in the gross profit margin of the overall vehicle in the quarter, and the car is expected to be sold out in the first half of the year.
Up to now, the ideal sales volume and efficiency are still in the leading position in the industry. Ideally, the order volumes of L7 and L8 are close, and L9 is about two-thirds of them. According to the expert minutes compiled by Jiuqian Consulting, as of the end of March, the total inventory of Ideal L7, L8, and L9 vehicles was less than 5,000 vehicles, while the number of orders in hand exceeded 30,000 vehicles.
Li Xiang said that the current order and inventory coefficient of Ideal Auto is 0.5, and the production, sales and supply plan is made on a weekly basis, which can guarantee the delivery within 14 days of receiving the order.
Ideal has two production lines in Changzhou factory, one producing L9 and L8, and the other producing L7 and L8. According to Ma Donghui, president and chief engineer of Ideal Automobile, the monthly production capacity of the two production lines is 25,000 vehicles and 10,000-12,000 vehicles respectively. car. The ideal Beijing factory will mainly produce pure electric vehicles in the future, with an annual production capacity of 100,000 vehicles in the first phase.
The production capacity is ready, and stores will gradually open this year. Next, it may be time to test how many orders Ideal can get in third- and fourth-tier cities.
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