This article is reprinted from the autocarweekly WeChat public account.
Author: Karakush
In June, the goal of Li Auto was to become the bestselling new energy vehicle brand in China.
According to the statistics of the China Automotive Terminal Retail Data, Li Auto sold 7827 vehicles, followed by NIO’s 7777 and XPeng’s 6639, marking the first time that Li Auto has become the top-selling new energy vehicle brand.
If we expand the scope, Li Auto’s ONE model ranked first in the sales of large SUVs in June and second in the sales of new energy SUVs. With just this one model, Li Auto broke into the top ten in the sales of luxury brands and had plenty to talk about with the old folks in the automotive industry.
The shorter the adjective, the greater the weight. This is not only true for new energy vehicles but also for Chinese brand cars, which are rarely successful.
In addition to displaying status, there are two other reasons why this group of June data is particularly impressive.
First, Li Auto decisively regained the sales volume that was lost in the first half of the year due to the replacement of its sole product.
Secondly, thanks to its prescient preparation of mainstream configurations for pre-production, Li Auto was able to switch to the 2021 ONE model in a timely manner after its release at the end of May. The smooth importation greatly stimulated new sales and slammed the negative public opinion surrounding Li Auto’s daily performance.
Finally, Li Auto has proven that their youthful ambition is not simply foolishness. At the launch of the new model, Li Xiang and Shen Yanan announced their KPI, stating that they expected to sell over 10,000 vehicles per month by September of this year.
At first glance, this goal sounds quite ambitious.
However, surpassing 10,000 monthly sales for a single model is a fairly high level of professionalism in the Chinese automotive market. In addition to product strength, one must also consider external factors, such as market size, competition from same-level models, and the willingness of consumers to suddenly switch to buying a house instead.
Looking again at the sales of large SUVs, the ceiling for other similar models is less than 5000. Therefore, how can a newcomer with a price of over 300,000 RMB compete? Especially when you consider that the goal is to double sales within four months.
Despite these challenges, Li Auto’s rapid growth now seems very attainable.
Making Li Auto a HitIf the monthly sales volume can reach ten thousand, it can meet Li Xiang’s initial expectations for the Ideal ONE.
Before the official launch of the Ideal ONE in 2018, Li Xiang had a conversation with Zhang Ying in a meeting room of the JD logistics center about the exploding product strategy of Ideal, in which a model should have an annual sales volume of over 100,000. He believed that if a car could not become an exploding product, there would be no opportunities in the future.
For a new brand with only a meaningless logo in the early stage, it is necessary to rely on particularly strong product competitiveness and price competitiveness to create an exploding product. If the old Ideal ONE has already verified the theory of the exploding product, then the new model’s breakthrough is promising.
Ideal’s confidence comes from the optimization that is tailored to the old models, making the new Ideal ONE infinitely close to the look of an exploding product.
Firstly, it has a stronger range extender system, which strengthens the mileage advantage. Its NEDC combined range can reach up to 1080 kilometers, and its WLTC range can reach 890 kilometers.
The 2021 model adopts a brand new three-in-one rear-drive motor, which has a more compact size and frees up more space to accommodate a larger fuel tank. At the same time, its efficiency of the motor and range extender has been further improved, reducing fuel consumption to 6.05L per 100 kilometers under the condition of a hot machine. This data is tough enough for any comparison with peers of the same size with four-wheel drive.
It is irrelevant today to argue what level of technology the range extender is. Ideal does not deny the long-term direction of pure electric vehicles, and they are also planning more hardcore pure electric products that can support ultra-fast charging and high voltage. However, at present, Ideal wants to provide a safer new energy solution for friends who are more prone to range anxiety and charging anxiety.
For example, in Northeast China, pure electricity is a bit difficult in the winter, while the range extender is the best solution based on the current battery technology and local charging layout. Now, more and more automakers are launching or planning to launch range extender products, indicating that there is a growing demand for this type of market. Ideal is just a little ahead of the curve, making it possible for everyone to achieve equal range freedom in the new energy wave regardless of north or south, season, and able to go anywhere they want whether it’s Xinjiang or Tibet.
In addition, the new Ideal ONE model also adds external discharge functions, with a maximum output power of 2200W, which can charge electric ovens, electric kettles, hot pots, coffee machines, and even other electric vehicles. This allows Ideal car owners to have extra flexibility and a sense of privilege to help those in need on the road.
## The Ideal ONE, A Benchmark Smart EV
The second part is the Ideal AD, a standard configuration of the advanced driver assistance system (ADAS), which has overcome the shortcoming of the previous intelligent driving system. This system is developed entirely by the Ideal autonomous driving team, including visual perception, sensor fusion, decision-making, planning, and control. It is expected to open the NOA (Navigate on Autopilot) function, which is built-in in all standard models, to all national highways and urban expressways in the third quarter. The Ideal ONE is also the first mass-produced vehicle model with the NOA feature.
Currently, the hardware has been greatly improved. For example, in terms of perception, it is equipped with the world’s first mass-produced 8 million-pixel high-definition camera, which has a recognition accuracy of 4K and significantly improved effective visible distance and recognition angle, reducing the blind spot at close range. The lateral detection range is broader, providing stronger perceptual ability for ramps and large corners. In addition, the millimeter-wave radar has increased to five, all of which are the latest fifth-generation products of Bosch.
In terms of computing power, Ideal adopts two newly released Horizon Journey 3 autonomous driving specialized chips. Li Xiang pointed out that in the past, constrained by Mobileye’s black box strategy, disadvantages could not be modified. However, through the in-depth collaboration with Horizon, Ideal has finally been able to fully exploit its accumulation in perception. For instance, the Ideal AD is claimed to have the ability to identify traffic lights, poles and bins, lateral vehicles, and even road studs.
Li predicts that from next year, there will be a change in people’s perception of the progress of autonomous driving development. Progress will follow Moore’s Law and even surpass it. Ideal cannot and will not miss it.
It is noteworthy that in the present and future, all Ideal vehicle models will be fully equipped with ADAS and autonomous driving, including software, data services, map services, computing hardware, sensors, and so on. Ideal will not charge fees for software activation or subscriptions.
No optional configuration is the Ideal mission and Li’s personal value. He does not accept the concept of high-end and low-end configurations for a vehicle, especially for ADAS and autonomous driving. Just like Apple’s OS, no matter whether it is an iPhone 6 for more than 4,000 yuan or an iPhone 12 Pro, the operating system should be the same.
Autonomous driving is the most fundamental and important system for a smart EV. Therefore, regardless of the price, all vehicle models have the same standard configuration. Many companies may utter pretty words about the first half of this idea, but the promise made in the second half is the best testimony to their faith in technology.
The third point is adhering to the six-seat principle and deepening the understanding of Chinese family users’ demands, providing a better spatial experience for every family member. The 2021 model has directly canceled the seven-seat version, not only because more than 96% of users choose the six-seat version, but also because they highly praise the six-seat version’s driving experience. This is the basis for abandoning a small portion of options; the six-seat version is worth promoting in the market.
The Ideal 6 is particularly dignified. The second row also has electrically adjustable seats, and the third row is equipped with children’s seat interfaces. The new model has found a way to increase the third row space by 41mm without affecting the luggage space, which can still fit up to 28 cubic meters of luggage, while maintaining a safe distance for passengers and the rear of the car.
At the same time, Ideal has upgraded its seats with comfortable sponges and standard four soft pillows. The most important feature is that electric seat backrests have been provided for the front two rows, which can be massaged, benefiting all four passengers on the trip. Ideal is particularly proud that among the mid-to-large-sized SUV models within 1 million yuan, only the Ideal ONE is equipped with this standard.
Becoming the Luxury Brand of China
If we summarize the above three points, are they fairness, fairness, and fairness: to make mileage fair, to make advanced technology fair, and to make comfort fair even in a moving vehicle space. You will feel that the name “Ideal” suddenly seems charmingly leftist.
A long time ago, Li Xiang said that their mission was very simple: to make mid-to-large-sized cars in the luxury car market, such as those priced from 700,000 to 1.2 million yuan, at half the original price or even lower. Now, those who could only afford to buy a BMW X1 can buy the top-of-the-line BMW X5.
Some friends may say that this is just about value for money. But it is not that easy in the luxury car market. You need to continuously innovate in technology, control costs, promote industrial capabilities, and enhance the value of technology.
The outside world cannot understand the madness and loyalty of Li Xiang and his Ideal ONE to those in the industry. They see Li Xiang as a celebrity, who just needs to speak louder to gain fifteen minutes of fame.
But the car owners understand.
Ideal stands on the user’s perspective to reflect on whether the industry’s current situation and rules make sense.
Why can’t a car priced at 300,000 yuan come standard with ventilated seats, a heated steering wheel, an electric sunroof, a sensing tailgate, or other 46 luxury features? Bicolor wheel hubs cost extra, and four-wheel drive costs at least 20,000 yuan more. Even an additional loudspeaker seems like a luxury item. Advanced driving assistance technology is difficult to find, and both passive and active safety features are hard to equip fully. All decent configurations must start from the higher versions, while the standard version only provides the bare minimum, leaving customers disappointed. A fully equipped car would cost about 400,000 to 500,000 yuan.
Then they came up with a sincere and intelligent top-of-the-line model to resist the established luxury authority’s delineation of class. This is idealistic idealism. Often times, it’s hard to tell whether a car owner’s brand loyalty is based on their identification with Li Xiang and IDEAL ONE, or their shared sentiment for that bit of idealism.
Something interesting to note is that there is a special group of IDEAL car owners who used to be members of the WeChat group “M Club” in Zhejiang. Led by group owner HOUYIN, over 60 M car owners in the group have successively purchased IDEAL ONE and recommended over 200 friends to do the same.
This is in line with the impression that IDEAL car owners have always given off – they understand cars. They understand brand premiums, but they also identify more with product values.
When IDEAL shines in the luxury car market, its light will spread and more people will realize what modern luxury cars should really be like. Perhaps the era of China’s auto industry independently defining luxury is about to arrive.
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.