An enchanting June has passed for the ideal automobile.
On one hand, after the release of the new ideal ONE model, some of the old car owners expressed their dissatisfaction; on the other hand, the sales of the new ideal ONE model have been soaring since its market release.
Li Xiang, the founder of the company, expressed on Weibo: “I look at Weibo every day, and I feel like the company is about to go bankrupt. I have to open the backstage to check the orders and delivery volume before I can find hope to survive.”
As the first full month of sales for the new ideal ONE, the ideal automobile sold 7,827 insured cars in June. The dissatisfaction of old users faded gradually along with the soaring sales of the new ideal ONE.
It should be pointed out that the ideal automobile does have shortcomings in user operation. However, even in this situation, the new ideal ONE still achieved impressive sales and was barely affected by the previous controversies.
This indicates that the new ideal ONE possesses advantages in the value of the product itself, surpassing the potential problems brought by other shortcomings, including user operation.
What the new ideal ONE did right
Although it is a high-end intelligent electric vehicle, the current brand value is 0 and needs to be accumulated by users’ word of mouth.
Li Xiang once explained the relationship between product and brand. In the “2021 China Electric Vehicle Hundred People Forum” in January, Li Xiang simplified “brand” into two categories: one is the product value-driven brand, and the other is the channel value-driven brand. The choice of these two different brands is related to the company’s own character.
Foreign manufacturers who follow a “bring-it principle” directly transplant foreign models into the Chinese market, lacking attention to the real needs of Chinese consumers. The ideal automobile pushes for a 2+2+2 layout with 6 seats which is more convenient for entry and exit of the third-row seats while ensuring the comfort of the second-row seats. In the revised model, the second-row seats have been upgraded to meet consumers’ demands for heating and massage, and have received recognition. These improvements may not involve complicated technological upgrades, but they reflect a product concept that is fundamentally different from that of other automobile manufacturers.
At this stage, the ideal automobile is a company that is driven by product power.The success of the old model of the IDEAL ONE in the market has led to its systematic output, which requires the product itself to be excellent. Moreover, this redesign of the IDEAL ONE was independently completed by the product team, and Li Xiang himself claimed that he did not participate.
The priority of the product itself is greater than the brand. IDEAL chooses to reflect the product value in the product itself rather than through services or user operations as the long-term strategy for sales growth. Therefore, even if the user system and brand itself do not have an absolute advantage, they can still drive the company to complete the first stage of success under the driving force of an excellent product.
Absolute Advantages of the IDEAL ONE
Under the brand culture driven by product value, although the 2021 IDEAL ONE is only a redesign, its enhanced advantages have maintained a strong competitiveness in the market.
The most significant improvement of the 2021 IDEAL ONE should be its extended range.
By using the new three-in-one motor, the electric motor, gearbox, and motor controller are integrated into one to reduce volume, providing more space for expanding the fuel tank. Ultimately, the fuel tank is expanded from 45 L in the old model to 55 L, and the NEDC range is increased from 800 km to 1080 km. Of course, the new energy-saving mode is also beneficial to the range.
Another improvement point, which I am most concerned about, is the significant improvement in the IDEAL ONE’s advanced driving assistance capability.
Two new things have been added to the new car: the world’s first mass-produced car-mounted 8 million-pixel high-definition camera and Horizon’s Double J3 (Journey 3).
The 8-million-pixel camera of the new IDEAL ONE has a large field of view, with an effective visible distance of up to 200 meters and a FOV (field of view) of 120°. Compared with the old model’s 1.3 million pixels and 52° FOV, the pixel has increased by about 5 times, and the field of view is more than twice as wide as before. With the help of the 8-million-pixel high-definition camera, the actual cornering ability of the 2021 IDEAL ONE has significantly improved, and it has passed the previous 42Mark Devil’s Bend that the old model failed.
My colleague has given a detailed introduction to the significance of the 8 million-pixel camera in the article “LiDar is still dragging its feet, while 8 million pixel cameras are already on the car”. Check it out by following this link: https://mp.weixin.qq.com/s?_biz=MjM5NTIyMjA2MQ==&mid=2656774804&idx=1&sn=c099d62afe0dc50d3c04e87336694d24&chksm=bd544dd68a23c4c0e8e0c220deeade9d9f9766b4f409d063c103db50380c5d8a51fc42458987&token=615920736&lang=zhCN#rd
The new Ideal One model features five millimeter-wave radars with a detection range of over 110 meters and a detection angle of 150 degrees, which work together with the 8 million pixel camera to form the perception system. No more “feeling your way” when changing lanes with the turn signal on.
With the addition of Horizon Double J3 (Journey 3), Ideal has freed itself from the bundled solutions of Mobileye and the annoying black box, achieving self-developed automatic driving software stack. Although J3’s computing power is only 5 TOPS, it uses ASIC (Application-Specific Integrated Circuit), which is far more efficient than Nvidia’s general-purpose chip platform.
With the self-developed algorithm for autonomous driving, the improvement of Ideal’s assisted driving capability will be accelerated. High-precision maps have also appeared in the new model and have become standard in Ideal’s product strategy. The NOA (Navigate on Autopilot) driving assist function will be delivered to customers through OTA (Over-The-Air) updates within the year, and of course, visual fusion parking will also be updated.
Finally, the new model not only adds massage function to the front seats but also equips the second-row seats with it.
The complementation of the short board of autonomous driving capability and the extension of the long board of cruising range and comfort make the product strength of the new model very attractive at a price of 338,000 yuan. And the fact that all these features have only increased the price by 10,000 yuan compared to the old model shows the success of the 2021 Ideal One in terms of its product strength.
Adding new configurations is just the tip of the iceberg, which any car manufacturer can do. But why has the new Ideal One become even more “explosive” than before? Please check out the following link to find out: https://upload.42how.com/article/image_20210722154341.pngIdeal has further explored the needs of users and made adjustments and additions to its configuration and functions accordingly, which undoubtedly meets their demands head-on. According to Li Xiang, 96% of people choose the 6-seat version, so the new Ideal ONE directly dropped the 7-seat version.
Based on the old model, Ideal has accumulated an original user group. With the first batch of word-of-mouth users, the Ideal brand’s breakthrough and product promotion have a solid mass base that will become the backbone of the increase in sales.
Li Xiang once said, “If there is an Ideal car dealership in a city, market share will differ by eight times.” With 100 directly-operated stores as the basis, they will expand to 200 by the end of the year. The increase in the number of directly-operated stores and the expansion of covered cities have also played a role in boosting sales.
June was Ideal’s “highlight moment” in 2021.
“June is the first complete month after the launch of the 2021 Ideal ONE, and we are very grateful for users’ recognition of the product’s strength,” said Shen Yanan, co-founder and president of Ideal Auto. Ideal’s performance in June did indeed break many records, which was enough to keep it in the limelight for a whole month.
- First in the new energy vehicle insurance policy registration;
- Best historical record of Ideal;
- First place in the medium-to-large SUV insurance policy registration;
- First time in the top ten of luxury brands.
Ideal’s insurance policy registration volume in June was 7,827 vehicles! This allowed Ideal to leap from third place in May to first place in the new energy vehicle insurance policy registration. Some media outlets claimed that Ideal had jumped from fourth place in the May sales rankings, however, this assertion may not be entirely accurate.
First, let’s clarify several concepts: sales figures are a rather ambiguous number, as dealers generally include accumulated inventory in their sales figures; delivery volume is the number of vehicles that are actually delivered to customers, which is a better indicator of actual sales; and insurance policy registration volume has a lag compared to delivery volume, but it is closest to the actual situation.
According to the backend data of “iKu”, Ideal’s insurance policy registration volume in May was 4,844 vehicles, lagging behind NIO (6,077 vehicles) and XPeng (5,745 vehicles), and ranked third.Ideal ONE topped the list of insurance coverage with a single car model, while NIO (7,777 units) and XPeng (6,639 units) offer two to three models.
Compared to Ideal’s previous performance, the 2021 Ideal ONE not only broke its own record for delivery and insurance coverage in June, but also had a record-breaking number of new orders, exceeding 10,000 for the first time. Looking back at the second quarter performance, Ideal delivered 17,575 units, a year-on-year increase of 166.1\%, setting a new quarterly record.
In terms of market segment, Ideal ONE once again became the champion in insurance coverage of mid-to-large-size SUVs, and this title is no small feat as it is nearly twice as much as the second-place Volkswagen Touareg (4,386 units). With the new Ideal ONE cancelling the 7-seater layout, Ideal has opened up a new market segment for 6-seater SUV based on excellent product quality.
Ideal has entered the top ten of luxury car brands in terms of sales in June for the first time. Although its ranking may not seem impressive, this represents a landmark achievement for new Chinese car brands in their uphill battle against traditional luxury car companies, beating second-tier luxury brands like Land Rover, Jaguar, and Lincoln. Of course, this is just a small milestone for Ideal in its upward journey as a new player in the market. It can only become a “leading luxury smart electric car brand” by stabilizing its sales in the top ranks.
Ideal’s Future Battle
The Sales of the New Ideal ONE Will Continue to Rise
As Shen Yanan had previously stated, they hope to have the new Ideal ONE sell 10,000 units per month by September this year. It seems that this prediction will come true.
Besides the product quality of the new Ideal ONE that has driven its sales momentum, the company’s optimistic estimates for the future will also prompt factories to increase production capacity, reducing constraints on delivery. In addition, Ideal plans to expand its direct sales stores to 200 this year, expanding its sales and service network, allowing more users to learn about the Ideal ONE and further boost sales.
The Software Competition
The current trend in the industry is that the cost of autonomous driving perception hardware is decreasing, and most of the models already released or planned for release next year will incorporate L4 level perception hardware. The competition among the players in the hardware will come to an end next year.In the next phase of competition, the focus will be on software capabilities, which will be divided into two parts: autonomous driving and intelligent cockpit. Under the condition of not being restricted by hardware, the leader of the next segment will be the one who can achieve better autonomous driving and intelligent user experience.
In the process of 0-1, investment in autonomous driving compared to other aspects of the product is relatively low, and the ideal investment should be in the areas that consumers can directly perceive. The fact has proved that such investment not only gains consumer recognition but also maintains the ideal cash flow. With the gradual recognition of the old model Ideal ONE by consumers, Ideal has entered the stage of 0-10. It is also from this stage that Ideal began to increase self-research investment. In 2021, the R&D cost will not be less than 3 billion yuan, and the newly established R&D center in Shanghai plans to recruit 2,000 engineers.
The immediate effect of the upgrade appears on the restyled Ideal ONE, which has been specially upgraded in terms of hardware and software capabilities for autonomous driving. After updating NOA, the difference in autonomous driving capabilities between the mainstream models of XPeng and NIO has been narrowed.
As we all know, the production cycle of traditional cars is about 36 months. If we add the early-stage market research, it will take even longer. Ideal’s achievements today stem from its accurate judgment of the market trend several years ago. Through precise positioning of market demand and user groups, Ideal ONE has won a ticket for Ideal to become China’s top new force. Further exploration of user needs has made the sales of the new Ideal ONE surpass multiple records.
All companies know the importance of being prepared for the future. Ideal’s construction of fast charging stations, layout of pure electric platforms, and so on, will also impact the market in the next few years.
Ideal expects that by 2025, China’s sales of smart electric cars will exceed 8 million, and its medium and long-term goal is to obtain more than 20% of the market share and become a top enterprise in China. However, there are still too many unknown factors, and we need to wait for sufficient market competition.
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.