Exclusive | Ideal Internal Memo: By 2025, achieving 20% market share and becoming the leading Chinese smart electric vehicle company (Full text of internal memo attached)


Today, Ideal Motors released an internal memo announcing their 2025 strategy: having a 20% share of the Chinese intelligent electric vehicle market and becoming the leading intelligent electric vehicle enterprise in China.

The 20% market share corresponds to a sales volume of 1.6 million vehicles.

Why is it that a new energy vehicle company that has been established for only five years and specializes in range extension, such as Ideal Motors, has the confidence to aim for a 20% share of the electric vehicle market in 2025?

And why does Ideal Motors, a company that sold just over 30,000 vehicles last year, aim to sell 1.6 million in 2025?

Based on the memo, we have summarized some of the logic behind these data targets for our analysis.

Why 20% and 1.6 Million?

First, Ideal Motors aims to become the leading intelligent electric vehicle enterprise in China by 2025. According to Ideal Motors, a 20% market share is necessary to achieve that goal.

To put this in context, in 2020, Volkswagen Group China and its joint ventures delivered a total of 3.85 million vehicles in China, accounting for 19.3% of the Chinese auto market. Toyota sold 1.797 million vehicles, accounting for 10% of the Chinese auto market.

In other words, Ideal Motors seeks to achieve a market share in the intelligent electric vehicle sector comparable to that of Volkswagen and Toyota.

As for the 1.6 million sales target:

According to the New Energy Vehicles Industry Development Plan (2021-2035) released by China’s Ministry of Industry and Information Technology in 2019, the sales proportion of new energy vehicles will reach 25% by 2025.

In an interview conducted last year, Zhang Hong, Secretary General of the New Energy Division of the China Auto Dealers Chamber of Commerce, said, “In 2019, China’s auto sales reached 25.769 million vehicles. Calculated at a compound annual growth rate of 2%, new car sales in China will reach 32.28 million vehicles in 2025, corresponding to new energy vehicle sales of 8.07 million vehicles.”

Thus, a 20% market share corresponds to a sales volume of 1.6 million vehicles.

This data was obtained by Ideal Motors by working backwards from China’s national policy. In other words, to become the leading intelligent electric vehicle enterprise in China, Ideal Motors must achieve this sales target. However, the key question is whether Ideal Motors can achieve this target and why it is the ideal company to do so.

Changes in Mission and Vision

Before discussing how Ideal Motors plans to achieve a 20% market share and sales of 1.6 million vehicles by 2025, let us first look at the changes in Ideal Motors’ mission and vision from 2015 to 2020 and from 2020 to 2025. With this in mind, we can gain a better understanding of Ideal Motors’ technical strategy.

In the period from 2015 to 2020, the mission of Ideal Automotive was to “realize the ideal car and home”, where “home” and “car” were still relatively independent entities, and the meaning of “ideal” was not yet clearly defined.

In the period from 2020 to 2025, the mission of Ideal Automotive has been updated to “create a mobile and happy home”.

In this stage, Ideal Automotive no longer mentions the concept of “car”. “Car” has become a “mobile home”, and the goal of Ideal Automotive is to create a “happy home”. Meeting travel needs has become the most fundamental factor, and the core element has become the fundamental attribute changes in the vehicle brought by intelligent driving.

This was hinted at by the release of the KTV function via OTA before the New Year and the sell-out of microphones in the Ideal Mall.

What is even more interesting is that in our community, there is a dad who has changed the name of his car to “Cheng Cheng’s Mobile Castle” after purchasing it.

Including the secondary screen on the co-pilot seat and the independent seats of the second row on Ideal ONE, the in-car space of Ideal ONE has already taken on the taste of a “mobile home” for passengers.

A Product Line Supporting Sales of 1.6 Million Vehicles

Underlying Technology: The Parallel Combination of Range-Extending and High-Voltage Pure Electric Platforms

In the next decade, Ideal Automotive will choose to pursue two parallel paths:

  1. Range-extending electric platforms (charging treasure) that value users with city pure electric and long-distance power generation;
  2. High-voltage pure electric platforms (superchargers) that can supplement 300-500 kilometers of driving range in ten minutes.

That’s right, Ideal still has range-extending vehicle models in its ten-year plan.

In the eyes of many electric car enthusiasts, Ideal’s range-extending technology is a representative of pseudo-new energy and is like taking off one’s trousers to fart, going against the national policy for new energy vehicle models.

However, in my opinion, range-extending technology is an excellent transition from fuel to pure electric.

From a technical perspective, there are three issues that pure electric vehicles must acknowledge at present:

  1. They are restricted by battery technology, and the driving range of pure electric vehicles still lags behind that of fuel vehicles, especially in low-temperature environments;
  2. The energy replenishment speed of pure electric vehicles is still far behind that of fuel vehicles, even though supercharging technology and battery-swapping technology have emerged;
  3. The cost of pure electric vehicles is still higher than that of fuel vehicle models.I admire Tesla, NIO, and CATL for pioneering the front-end of the automotive market. I have also purchased a pure-electric car to be part of this trend. However, for many users, especially “family users” who are Ideal’s target audience, the problems with electric cars are not just minor issues, but rather major ones in many scenarios.

But plug-in hybrid electric cars do not have these problems.

Replacing gasoline cars is a common goal, but gasoline cars will not suddenly disappear, and related infrastructure such as gas stations will not suddenly disappear. There is a process from pure gasoline to pure electric, and to allow users to not only experience the driving feeling and cost (for short trips) of pure electric vehicles, but also to try to adapt to electric cars without psychological pressure in a way that utilizes existing infrastructure is a very clever way to transition.

From a technical perspective, the pure electric era will definitely come, and Ideal needs sufficient technological reserves to be able to compete with brands that have been cultivating pure electric technology when that day comes.

In their previous financial conference call and financing statement, Ideal has repeatedly mentioned their plans in the pure electric field.

Simply put, Ideal is currently devoting themselves to the research and development of high-voltage platforms, high-magnification batteries, super-fast charging technology, and next-generation BEV platforms. They will launch a variety of products based on the second-generation plug-in hybrid electric X platform, high-voltage pure electric Whale platform, and high-voltage pure electric Shark platform.

This internal memo also mentioned that by 2030, fast charging technology that can charge in 10 minutes and provide a range of 300-500 kilometers will be widely available, making the charging experience comparable to refueling. The investment return rate of HPC supercharging stations will surpass that of gas stations, which is better for the commercial support of electric cars.

Based on the above technologies, when Ideal launches a pure electric car, its replenishment convenience will definitely be on par with or even better than gasoline cars.

Not giving “trouble” to users on their travels and forming a closed loop in business is necessary to achieve a larger market share, which is the basis of the 1.6 million.

Of course, more attractive things are in the middle and top tiers.

Middle Tier: Autonomous Driving Technology

Ideal believes that the demand for users is an “exclusive space for autonomous driving,” so autonomous driving is also an important part of Ideal’s strategy.

We have emphasized this point many times in our previous articles.

In this internal memo, it is stated that “the endgame of intelligent electric vehicle competition is the competition for data and chips.”## Autonomous Driving

Autonomous driving will develop at the pace of Moore’s Law in the next decade. By 2030, both the computing power and sensor resolution of vehicles will improve by hundreds of times. Thousands of TOPS (calculation unit) chips, cameras with billions of pixels, and high-resolution solid-state Lidar will become standard equipment for autonomous driving. As long as there is sufficient data and investment in R&D, leading intelligent electric vehicle companies can achieve Level 4 autonomous driving. Autonomous driving will become the operating system of intelligent electric vehicles rather than a feature configuration. By 2030, we believe that Level 4 autonomous driving will become standard for every smart electric vehicle. Users will not purchase an intelligent electric vehicle that does not have autonomous driving capabilities.

On the current model, the Ideal ONE, Ideal Motors has arranged two cameras: one as a perception camera for assisted driving and the other as a data acquisition camera. This lays the foundation for Ideal to collect data. However, the relatively simple assisted driving hardware on the current model prevents Ideal ONE from having higher-level assisted driving functions such as NoA, NOP, and NGP.

From the current situation, the Ideal’s strategic layout is adequate. However, the technology aspect is slightly lagging, and we still need to wait for the next model, X01, to see some details of Ideal’s autonomous driving capabilities. According to the introduction of Ideal Motors’ chief technology officer, Wang Kai, the upcoming full-size SUV X01, to be launched in 2022, is ready for L4 level autonomous driving with comprehensive hardware interface reservations, including sensors and chips. This is also crucial for Ideal to capture 20% of the market.

Intelligent Cabin

After achieving autonomous driving, the competition shifts to the cabin’s intelligence. Obviously, the cabin after achieving L4 is not the same as the current one. Due to space limitations, we will not go into detail here.

Intelligent Organization

With the development of the intelligent electric vehicle industry, the importance of company organization has gradually become the industry’s consensus. As mentioned in the internal memo, “Buying a traditional fuel vehicle will hardly change after three years, while an intelligent electric car grows almost every month, which means that the management approach will be completely different, and talent needs will also be completely different.” New power automakers have a natural advantage in this regard. The challenge that Ideal needs to answer is whether it can establish a company organization that matches its 1.6 million sales volume. This challenge is also facing all intelligent electric vehicle companies.

Finally, here is the full text of Ideal Motors’ internal memo: “Creating a Mobile Home: Ideal Motors’ 2025 Strategy Release.”## Ideal Automobile has been founded for over five years and continuously learning from advanced enterprises to form its own working methodology through practical experience and iterations: Ideal Automobile Working Methodology (LBP for short). The Ideal Automobile 2025 strategy is completed according to the Ideal Automobile Strategic Analysis Methodology (LSA in short) in LBP. Today, the Ideal Automobile 2025 strategy is officially released to all employees, which helps partners fully understand the future development of the enterprise.

(I) Cognition and Vision: How We Look at 2030

1. Industry Trends in 2030:

  1. Global Environment:

China plans to reach the peak of carbon emissions around 2030, which has a positive driving effect on the development of the new energy vehicle industry. The United States and the European Union have also proposed higher requirements for the time schedule of future carbon emissions and the ban on fuel vehicles. We predict that the sales growth of new energy vehicles globally will surpass most institutions’ predictions, and it is expected to reach 60% of the proportion of new passenger car sales by 2030, and the proportion in China will be even higher. New energy vehicles are destined to grow at a super-high speed in the next decade.

We are optimistic about the sales growth of new energy vehicles, but at the same time, we think that there is uncertainty in the global economy under the impact of the pandemic and global debt. Based on this, we believe that the annual sales of global passenger cars will hover around 65-70 million, and there will be no substantial growth. We predict that the sales of new energy passenger vehicles globally will be around 40 million in 2030, and China’s sales will reach 20 million.

  1. Technological Development:

Autonomous driving will develop at the speed of Moore’s Law in the next decade. By 2030, both vehicle computing power and sensor resolution will be improved by hundreds of times. Chips with thousands of TOPS (computing power units), cameras with billions of pixels, and high-resolution solid-state lidar will all become standard equipment for autonomous driving.

As long as they have enough data and sufficient R&D investment, the leading enterprises in intelligent electric vehicles can achieve Level 4 autonomous driving. Autonomous driving will become the operating system of intelligent electric vehicles instead of function configuration. We believe that Level 4 autonomous driving will become standard equipment for every intelligent electric vehicle by 2030, and users will not choose an intelligent EV that lacks autonomous driving capability.

In terms of electric technology, the ultra-fast charging technology of 300-500 km in 10 minutes will be popularized, making the charging experience closer to refueling, which will be a necessary condition for accelerating the popularity of electric vehicles. More environmentally friendly power generation methods, charging networks with storage capacity, and V2G (vehicle-to-grid) will form a brand new commercial value chain. HPC supercharging stations will have a higher return on investment than gas stations, better supporting the popularization of electric vehicles from a commercial perspective.

  1. Market Changes:

The full popularity of autonomous driving in 2030 will lead to a polarization of consumer demand for cars.Part of the population believes that cars will become exclusive spaces for autonomous driving, and they hope to have a private space for themselves and their families with the atmosphere and design they love, abundant electric energy, powerful computing power, and the best VR and AR environment. It is a space for entertainment, socializing, work, and family. Intelligent electric vehicles will become more valuable private spaces than residences. We believe that the sales of private intelligent electric vehicles will not decrease, and the value of each car’s entire lifecycle will increase significantly.

Another part of the population sees autonomous vehicles as mere transportation tools, solving the problem of getting from point A to point B, only considering efficiency and cost. This type of demand competition will significantly reduce the cost of transportation, including autonomous taxis, and autonomous public transportation may even become a free service, with enterprises and governments generating revenue through value-added services.

Ideal Cars will stick to its mission of creating a mobile home and a happy home. We will build autonomous driving exclusive spaces for more families, create happiness, and remain loyal to our own brand mission.

II. Industry Challenges in 2030
1. Competitive Challenges

The competition for traditional fuel-powered cars is industrial and mechanical. In the past few decades, the overall competitive landscape has been relatively friendly, more like a football league than a cup or knockout competition. Even a brand with a relatively small market share can survive and develop healthily by capturing niche markets with its unique positioning and product features.

The ultimate competition for intelligent electric vehicles is data and chip competition, which will quickly turn into a knockout competition like the World Cup. Each brand will face group stage elimination and round-by-round knockouts. Referring to China’s intelligent smartphone market share in 2020, the top five brands occupied 96.5% of the market share. The market competition and share of intelligent electric vehicles in 2030 will be very similar. To become a leading company in the global intelligent electric vehicle industry, a brand must obtain more than 25% of the global market share.

2. Energy Challenges

The convenience of charging is still the biggest challenge and bottleneck for the popularization of electric vehicles. The total number of parking spaces that can be equipped with private charging piles is extremely limited, which will hinder more fuel-powered car owners from switching to intelligent electric vehicles. Only when charging stations become as convenient and fast as gas stations can all consumers switch from fuel-powered cars to intelligent electric vehicles.

Over the next ten years, Ideal Cars will choose two parallel paths: 1. Develop a long-range electric platform for city use and power generation for user value (charging treasure); 2. Develop a high-voltage pure electric platform (supercharger) that can replenish 300-500 kilometers of range in ten minutes. Everything we do is from the perspective of providing energy solutions for free mobility that can accelerate the popularization of electric vehicles.

3. Organizational ChallengesTraditional industrial organization cannot meet the development needs of intelligent electric vehicles. What the era of intelligent electric vehicles needs is intelligent organization.

Traditional fuel-powered cars operate in a relatively controllable world, and planning, processes, and control are the most effective management modes, which have also produced powerful industrial enterprises and industrial organizations. Buying a traditional fuel-powered car will lead to almost no changes after three years, while an intelligent electric vehicle will undergo almost monthly growth, which means that the management methods will be completely different, and the demand for talent will also be completely different.

Humans are the most advanced intelligent beings on Earth, and the operating mode of human intelligence is: 1. Perception; 2. Decision-making; 3. Execution; 4. Feedback. Specifically, how to effectively utilize the operating mode of human intelligence and build the management and operational system of products and organizations is a necessary course for every intelligent electric vehicle enterprise.

III. Ideal Auto’s Vision in 2030: to create a mobile home and become the world’s leading intelligent electric vehicle enterprise.

This is an unprecedented vision and goal for a Chinese enterprise, but we have a responsibility to make a big impact under such trends. Although the traditional automotive industry has developed for more than 100 years, the competition in intelligent electric vehicles will basically be decided by 2030.

We hope to achieve something big through the hard work of all our partners in the best decade of our lives and the industry’s best decade. Let’s make this decade the most proud one in our lives, and don’t let us leave behind a huge regret.

II. Market and Strategy: What We Will Do in 2025
I. Timeline for 2025

From 2015 to 2020, Ideal Auto was in the 0-1 stage, and like most start-ups, we faced relatively scarce resources and funds during this stage. Therefore, survival and the ability to generate wealth were the core goals of our development. We delivered Ideal ONE, underwent a complete product, R&D, supply chain, production, sales, and organizational capabilities test, and achieved the highest sales volume of new energy SUVs in China in 2020, possessing the most basic survival and wealth-generating capabilities.

From 2021 to 2025, Ideal Auto will be in the 1-10 stage, namely a stage of rapid development. The landmark challenge is for us to become a leading Chinese intelligent electric vehicle brand, get a ticket to compete against the world’s leading enterprises in the global market. It is estimated that China will sell more than 8 million intelligent electric vehicles in 2025, and obtaining more than 20% of the market share is a necessary condition for becoming a leading Chinese enterprise.

This is a huge challenge. We must maintain abundant reserves of talent and funds, target the value of user products, and take technological and product R&D as the core driving force for our enterprise. We will invest most of our resources in R&D and talent reserves without taking shortcuts or cutting corners.## II. User Targeting in 2025

From 2015 to 2020, we selected a precise user group and built a value system around them, which was implemented in our products and services. This valuable user group has distinctive features:

Firstly, they are mostly families with children, frequently needing to accommodate three generations. They are add-on customers of Mercedes-Benz, BMW, and Audi and replacement customers of Volkswagen, Toyota, and Honda. The design of the IDEAL ONE fully considers the needs of every family member, including male and female hosts, elders, and children. Good driving experience, continuous growth ability, co-pilot screen, second-row electric seats, third-row aisle, huge trunk, etc., are all designed for this target group.

Secondly, they generally have charging conditions and clear long-distance driving needs (such as self-driving tours). Over 70\% of car owners have independent parking spaces and installed home charging piles, and over 20\% of car owners have stable public charging conditions in the company or community. Pure electric driving is almost ubiquitous in the city, which is environmentally friendly and has low vehicle operating costs. Electric range extension is the best long-distance charging solution, so there is no anxiety during long-distance driving, and they can travel freely. They regard the IDEAL ONE as a pure electric vehicle that can be driven long distances.

Looking forward to the next five years, we will expand the coverage of our user group: more extensive family users, any user who wants to have their “home.” Centered around the core mission of creating a mobile home, we will provide a richer range of intelligent electric vehicles, including multiple products from the 2nd-generation EREV X platform, high-voltage pure-electric Whale platform, and high-voltage pure-electric Shark platform, maintaining our brand positioning of luxury intelligent electric vehicles, widely covering a price range of 150,000 to 500,000 yuan, making high-quality mobile homes accessible to more people.

Users: family users

User needs: exclusive space with autonomous driving

Price range: 150,000 to 500,000 yuan

Brand positioning: luxury intelligent electric vehicles

Brand mission: create a mobile home, create a happy home.

III. Strategic Objectives in 2025

Strategic objectives must be measurable, and market share is the core of our strategy. Only when we obtain a market share of over 20\% in China’s intelligent electric vehicle market in 2025 and become a recognized leading company, will we have enough reserves of talent, technology, and capital to participate in more intense global market competition in 2030.

IDEAL AUTO’s strategic objectives in 2025: a market share of 20\% and becoming China’s leading intelligent electric vehicle company.

Key Supporting Factor One: Comprehensively leading product development and technology research capabilities centered around user product value.

Key Supporting Factor Two: Comprehensively leading commercial capabilities centered around market share, including sales, service, production, and the supply chain.### Key Supporting Element 3:
Intelligent organization as the core, leading strategic resources composed of talents, data, and funding support capabilities.

Only by achieving the first in comprehensive strength, can you truly have a chance to win the championship in the world cup of intelligent electric vehicles.

We hope that every partner of Ideal Motors can carefully read the 2025 strategy, implement the core goals and requirements of the enterprise into specific work, so that their business decisions and work results can better support the enterprise’s 2025 strategy. Let’s welcome the most splendid and challenging decade of our lives, and achieve a decade that we can all be proud of.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.