Author: Wu Xiaoyu Yi Silin
Edited by Zhu Yimin
Source | IC
By selling more hybrid products, the sales volume of the ideal car soared last year. This year, in order to seek the "second growth curve", the company ideally put the release of four pure electric products on the product planning agenda.
But the first pure electric product with high hopes MEGA (Configuration |Inquiry) , did not bring the corresponding sales feedback for the ideal, but also interrupted the pace of ideal growth.
On the evening of May 20, Ideal Auto released its performance report for the first quarter of 2024. The most conspicuous data was operating losses, 585 million yuan. Three months ago, the 2023 financial report data released by Ideal showed that Ideal Auto earned 11.81 billion yuan.
A large part of the operating loss is due to the excessive investment in R&D, sales/administration and other operating expenses. The financial report shows that the R&D investment, marketing/administrative investment in the ideal quarter are up to 3 billion yuan , exceeding market expectations.
So far, it is ideal to end the continuous profits for four consecutive quarters and return to the state of operating losses in the fourth quarter of 2022. At that time, the ideal was in a difficult time when the ideal ONE was changing.
Loss data also stirred investors' nerves. After the release of the financial report, as of the close of May 21, the share price of Ideal Hong Kong Stock has dropped to HK $80.65, It has fallen nearly 55% from the peak at the beginning of this year.
Affected by the lower than expected sales volume of MEGA, the flagship pure electric product, the release rhythm of the ideal pure electric product has changed several times since May.
An insider told the 21st Century Business Herald reporter that whether or not and how to push Pure Electric this year has been discussed many times internally. Some plans are based on the ideal release rhythm of the extended range products in the past, "first push M9, then M8, M7"; others advocate "first push M7, then M8 and M9", because the economic downturn requires pushing cheap cars first.
In the end, Li Xiang, CEO of Ideal Auto, decided at this financial report conference: "This year, the pure electric SUV products will not be released, but will be released in the first half of next year." As a direct result, "In the second half of this year, ideally, there is no new card to play, and the next step is to defend" , a private investor told the 21st Century Business Herald.
However, the ideal situation may not be so bad. Another investor believes that, in the long run, postponing the subsequent release of pure electric products will "be more conducive to the ideal launch of more competitive pure electric products, and will also win time for better channel adjustment".
After a product fails to be released, the car companies will enter a short pain period, but it is also a great opportunity to find problems, adjust themselves, and meet the market competition with a more powerful attitude.
After the failure of Xiaopeng G9, He Xiaopeng began to think about the lowest level of the organization, reorganized the organization of more than 10 businesses, and divided them into five committees: strategy, product, technology, sales and OTA according to their functions.
So is the ideal. On April 7, Ideality began a new round of organizational structure adjustment, dismantled the Commercial Department, established a product line department, and focused on the successful decision-making and operation of product business. At the financial report meeting, Li Xiang also emphasized once again that the core change of this organizational structure adjustment is "the establishment of a quality operation team", "let the business focus more on making high-quality decisions, and do not need to spend time on repetitive operations to improve execution efficiency."
Holding a cash reserve of 98.9 billion yuan and a gross profit rate of 20.6% may be the biggest confidence for an ideal car to adjust itself.
This is undoubtedly a highly discussed financial report after the first quarter fell into operating losses. We talked with three investors about the delayed release of pure electric products, second quarter performance expectations, and future opportunities for ideal cars. Here are their views.
Wang Yi, a 10-year private investor
"The fundamental contradiction behind when to launch a pure tram may not be how many charging posts have been built."
Ideal will not release pure electric SUV products this year, but will release them in the first half of next year - this is the heaviest news announced by Ideal CEO Li Xiang on last night's financial report call. Li Xiang's explanation is that "the number of self operated overcharged piles is similar to that of Tesla China, which is the right time for pure electric products to be introduced to the market."
I did a calculation. Tesla currently has more than 1900 overcharge stations, However, the construction of the ideal charging station is very slow: By the end of 2023, 262 overcharge stations are expected to be put into operation. In the first five and a half months of this year, Ideal added 138 overcharge stations, with 25 overcharge stations built every month.
At this rate, by the end of 2024, there will be a total of 562.5 ideal overcharging stations. Even if "one station is built a day", there will be 630 charging stations by the end of 2024, which is far from the goal of exceeding 2000 stations by the end of 2024.
The management's goal of charging station construction is too radical. According to Tesla's station building standards, it is ideal that pure trams may be released as soon as 2026. According to Ouyang Minggao, vice chairman of China Electric Vehicle Hundred Talents Association, in 2026, the new energy market will account for more than 50%, and the battle between products will be more intense.
Ideal for self built charging stations. "Users of high-end pure electric vehicles do not want to spend time charging, nor do they want to crowd into public charging posts. If you want to sell high-end pure electric vehicles well, it is inevitable to build direct charging stations," Li Xiang said at the financial report conference in February this year.
But in my opinion, it may be a false proposition to release pure trams after the charging station construction meets the expectations.
BYD had a net cash flow of 169.73 billion yuan last year, but they were not keen to build charging stations. According to the official data of automobile enterprises, as of August 2023, Weilai has the largest number of self built charging and replacement power stations among automobile enterprises, with 4800, followed by 2200 for Xiaopeng and 1600 for Tesla. BYD is not in the top five of this list.
However, the performance of BYD Pure Tram is very good. In the fourth quarter of last year, BYD sold 526400 pure trams, surpassing Tesla's 495000, and became the world's largest pure tramcar manufacturer and the world's largest pure electric vehicle sales. The annual operating cost of a medium-sized charging station is between 100000 yuan and 200000 yuan. In order to reduce construction costs and avoid short-term losses, BYD chose to carry out in-depth binding cooperation with third-party operators.
Li Xiang's sensitive sense of smell of the product, the past successful performance of the ideal extended range product, and his recognition of Li Xiang are three factors that make my fund ideal for holding shares. In the past, the ideal car led by Li Xiang was very firm in important strategies. In the early days of the ideal, most people did not recognize the extended range technology and thought it was a "transition route", but Li Xiang insisted on it. The L series, which uses the extended route, sold 376000 vehicles last year, making it the new force with the best sales performance.
But after the sales volume of MEGA, the first ideal pure electric product, fell short of expectations, in just three months, I saw the shift and swing of the ideal internal strategy ——Even in my opinion, these strategies should have been adhered to and correct.
Last June, on the Ideal Family Science and Technology Day, the ideal view on energy supplement was that "compared with cities, users are more anxious about the endurance of driving new energy vehicles on high speed". Because of the concentration of high speed traffic and the long driving distance, users have to recharge their batteries every few hours. At that time, the ideal layout rhythm for energy supplement was to give priority to the construction of overcharge stations at high speed.
After the release of MEGA, the ideal view is that most of the travel scenes of family users who buy MEGA are in the city, and the farthest is the suburbs, so they have accelerated the pace of arranging charging stations in the city.
We have investigated the experience of pure electric users: tram users in cities generally charge once a week, and it takes about 20 minutes more to use 3C charging piles than 5C. This is not unacceptable to users. Ideally, it will take longer and cost more to pave your own 5C charging pile.
On the layout of energy supplement, Xiao Peng has adjusted the route. Xiaopeng used 4C batteries when releasing G9 in September 2022, but they used 3C batteries when releasing G6 last year.
At that time, the Xiaopeng three electricity team made a survey: there were few piles, and the user acceptance of 4C batteries was not as expected. Taking Guangzhou as an example, there are only dozens of 4C quick filling piles, but there are hundreds of 3C piles. "The technical score is 90 points, but the market resource is only 60 points. If you multiply the two scores, you will fail," Gu Jie, head of Xiaopeng Auto Powertrain Center, said in an interview with the media last August.
But we should also see the positive side. The gross profit rate of the ideal car in this quarter is particularly resilient.
In the fourth quarter of last year, the sales volume of ideal cars was 131800, with a gross margin of 23.5%. In the first quarter of this year, the ideal gross profit margin remained at 20.6% under the influence of the tragic auto price war and the non obvious scale effect of MEGA. This is something that even Tesla can hardly do. In the third quarter of last year, affected by price cuts and declining delivery, Tesla's gross margin fell to 17.9%, the lowest level in four years.
Ideally, we should warn in the financial report that "the second quarter will be the most difficult quarter for the company this year". Strong gross profit rate may be the basis for the ideal car to adjust itself.
Li Mingyue, 7-year investor in new energy field
"Postponing pure electricity will affect stock prices in the short term, and it is a good move in the long term"
According to the ideal plan, 2024 was originally the ideal "pure electric year": MEGA was released in March, and three pure electric SUVs were released in the second half of the year. The delay of pure electric products has disrupted the ideal product planning. The ideal will face the problem of the absence of new products, and the sales will still rely on the old L-series cars, which will naturally affect the ideal stock price in the short term.
But in the long run, postponing pure electric products is a good measure for the ideal. This has won time for the ideal launch of more competitive pure electric products and distribution channels.
The layout of overcharge stations is only a necessary condition, but not a sufficient condition, for pure trams. The release of pure electric vehicles mainly depends on whether and how the ideal will modify pure electric products, and also depends on whether the ideal has laid out corresponding channels for pure electric products.
As far as I know, for pure electric products, the ideal is to focus on "changing the interior and enhancing the sense of luxury", and the changes to the appearance are limited.
Compared with changing products, the distribution of marketing channels is a greater challenge for the ideal.
If the pure electric products are released this year, it will be a test whether the ideal sales network can support four new cars to be put in stores at the same time on the premise of four existing products. If you don't even have a booth, how would you like to sell your car? The old car cannot be moved away, which will also affect the sales of the old model to some extent.
Li Xiang also realized this. "If you want to support a new model to achieve sales of more than 10000 months, you probably need to add 500-600 fixed booths nationwide, otherwise there will be a problem of increasing the number of products, but not increasing sales." Li Xiang said at the financial report conference.
Postponing the release of pure electric products is an ideal way to adjust oneself to cope with future competition, and is also the best solution at this stage.
The second quarter is probably the worst quarter in the world. In my opinion, the ideal gross profit will be affected by the product structure: L6 (Configuration |Inquiry) It is the cheapest product in the L series, with relatively low gross profit; However, its proportion is still increasing. The sales of L7, L8 and L9 in the third quarter of this year are between 20000 and 30000, but investors expect the sales of L6 in half a month to be 20000.
The increase in sales will drive the share price. At present, the orders of L7, 8 and 9 are improving. At present, the weekly sales orders I track will continue to increase, and it is expected to return to the weekly sales of more than 8000 vehicles.
Public opinion is not the core factor influencing users to buy cars. Users will return to rationality when buying a car. At the end of 2022, the ideal sales volume reached 133200, a year-on-year increase of 47.2%.
In the context of price war, the more cars are sold, the cheaper they are. It is a harsh living environment for companies that make high-end cars. Even so, the ideal car is still making money, which is the best way for the ideal to prove itself.
Sarah, 3-year private investor
"Before the turning point of smart driving comes, it is right to invest more in the end-to-end field."
MEGA sales volume is lower than expected, adding 2024 models Ideal L7 (Configuration |Inquiry) Air and L8Air reduced their prices. Before the release of the financial report, few investors would expect this to be a good quarterly report.
What exceeded investors' expectations was that the second quarter was the bottom of the ideal car. Our previous expectation was the first quarter. This is also the direct reason for the decline of 14% in the stock price of Ideal Auto in the United States.
After the layoff, the important factor that raised the administrative expenses of the ideal car in the second quarter was compensation. The high investment in fixed costs will directly affect the gross profit of the ideal car when the price of the ideal whole system is reduced on April 7 and the sales volume is lower than expected.
In the third quarter, the cost optimization of layoff measures will appear. According to the 2023 financial report, the optimization of 5600 people will save about 2.1 billion yuan for the ideal, and save 37500 yuan per capita.
However, after the release of pure electric products was delayed, in the second half of this year, there was no new ideal brand and they were in a defensive state. Weipai Lanshan, Qiruixing Epoch, Zero Running C10 and other similar competitive products are constantly emerging, and the product competition is fierce. Price reduction may be an ideal but helpless choice.
However, once the price of the ideal car is reduced again, the cost saved by personnel optimization is difficult to offset the impact of the decline in gross profit margin.
At the financial report meeting, the management gave the expected sales volume for the second quarter of 105000 - 11000 units, with a unit price of 272000 yuan. Based on this calculation, the sales volume of an ideal quarter is 30.8 billion yuan. The ideal price of giving up a gross profit point is 300 million yuan.
The layoff is responsible for the operation, but I don't understand how to optimize the Smart Drive team.
In this financial report conference, the ideal layout of Smart Drive is also very conservative. Ma Donghui, Executive Director and President of Ideal Auto, believes that the end-to-end model proposed by Tesla is the ultimate realization of data driven, and the technical trend is easy to reach agreement. However, "not all auto companies have the ability and resources to do so".
The core of the end-to-end model is to improve the ability to understand, perceive and make data decisions on complex scenes through data feeding and training the AI large model of infinite rules, which can greatly save the cost of intelligent driving training.
At present, the ideal cash reserve is 98.9 billion yuan, which is the richest car company in China besides BYD. It has the financial foundation of advanced intelligent driving technology.
It is widely recognized in the industry that intelligent driving will usher in a turning point in 2025. Before the turning point, it is right to invest more in the end-to-end field.
End to end evolution requires not only money, but also time. Tesla's intelligent driving team only has more than 200 people, which is not achieved in a day. Tesla first completes the small models, and then integrates the perception models and regulatory models one by one.
The low ratio of input and output of smart driving is foreseeable in the short term, but it is too late to start doing it when all smart cars can run on the road.
(The above content only represents the opinions of respondents, not the platform's position.)
