Financial Data
Delivery and Retail Store Data
In 2021Q2, 17,575 vehicles were delivered, representing a YoY growth of 166.1% and a QoQ growth of 39.7%.
- 12,579 vehicles were delivered in 2021Q1.
- 14,464 vehicles were delivered in 2020Q4.
- 8,660 vehicles were delivered in 2020Q3.
- 6,604 vehicles were delivered in 2020Q2.
As of June 30, 2021, we have 97 retail stores and 167 service centers in 64 cities across China. Our authorized body and paint centers cover 127 cities nationwide.
Financial Data
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Total revenue in 2021Q2 was RMB 5.04 billion, a 40.9% increase from RMB 3.58 billion in 2021Q1.
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Automotive sales revenue in 2021Q2 was RMB 4.90 billion, a 41.6% increase from RMB 3.46 billion in 2021Q1. The increase in revenue was mainly attributable to the release of the 2021 model year ONE, which boosted delivery volume since its launch on May 25, 2021.
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Gross profit in 2021Q2 was RMB 0.953 billion, a 54.5% increase from RMB 0.6167 billion in 2021Q1.
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The vehicle sales gross margin for 2021Q2 was 18.7% (2021Q1: 16.9%). The increase in gross margin was mainly due to the launch of the 2021 model year ONE at the end of May, which lifted the average selling price for Q2.
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The gross margin for 2021Q2 was 18.9% (2021Q1: 17.3%). The change was primarily due to the increase in gross margin for automotive sales.
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Sales costs in 2021Q2 were RMB 4.09 billion, a 38.2% increase from RMB 2.96 billion in 2021Q1.
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Net loss in 2021Q2 was RMB 0.2355 billion, a 34.6% decrease from the net loss of RMB 0.36 billion in 2021Q1.
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As of June 30, 2021, the company had cash and cash equivalents, restricted cash, time deposits, and short-term investments totaling RMB 36.53 billion.
Research and Development Expenses
R&D expenses in 2021Q2 were RMB 0.6534 billion, a 27.0% increase from RMB 0.5145 billion in 2021Q1.
Business Outlook
For 2021Q3, the company expects:
- Delivered vehicles to be 25,000-26,000, representing a YoY growth of approximately 188.7% to 200.2% compared to 2020Q3.- Total revenue is expected to increase by approximately 177.8% to 188.9% compared to Q3 2020, with a range of RMB 6.98 billion to RMB 7.25 billion.
Summary of Conference Call Q&A
Q1: How do you view the acceleration of traditional brand (such as Great Wall, BYD, Geely, etc.) launch speed? Is there any risk in terms of autonomous driving regulations that could slow down the speed?
A: Ideal Automobile has its own research and development and launch speed plan. The new extended range vehicle model based on a new platform will be launched in 2022 and the pure electric vehicle model in 2023, according to the plan that was previously announced.
In terms of regulations, Ideal believes that the management of the Ministry of Industry and Information Technology will standardize the entire industry and promote healthy development of the industry. For Ideal Automobile, they will be more cautious about ADAS products and ensure that the function is mature before releasing them. Overall, Ideal will not change its strategy in ADAS.
Q2: Which component is in the most severe shortage? How does Ideal maintain more production stability compared to other brands? Can you share more production capacity plans? When will the new Beijing plant be put into operation?
A: The shortage of components is a problem for the entire industry, especially with the influence of the pandemic in Malaysia. The situation of Ideal is actually not better than that of competitors. If the pandemic eases, the entire industry will improve, but this is difficult to estimate. More details about the Beijing plant will be shared later.
Q3: Compared with Q1, the gross profit margin of Q2 has improved a lot. Can you share more information? Can you share more information about the cooperation with Xincheng in the extended range field?
A: In terms of costs, Ideal Automobile has controlled certain costs in cooperation with suppliers, and the gross profit margin of Q3 and Q4 will continue to improve, which will stay within 19% to 20% this year. Xincheng is a leading company in the industry, with a long-term cooperation relationship with BMW. The joint venture company owns a 51% stake in Ideal.
Q4: In terms of sales forecast, 10,000 units were expected to be sold in September. How about August? The guidance for the Ideal 2025 global sales plan is 1.6 million units. Can it be achieved according to the plan?
A: The guidance for Q3 takes into account the impact of the pandemic in Malaysia, and a more realistic evaluation is required. September is coming soon, and the delivery volume for August will be announced immediately. As for next year, it looks like it will develop according to the plan.
Q5: What are the reasons for the cost increase in Q2? What is the progress and key nodes for the development of pure electric vehicles in 2023?
A: Costs in terms of marketing, personnel, and venue have all increased in Q2. Ideal Automobile will also strive for the goal of having 200 retail stores this year. The development of pure electric vehicle models is underway according to the plan. The concept design for supercharging piles has already been completed, and pilot supercharging stations will be built by the end of this year.
Q6: What are the differences and distinctions between pure electric and extended range vehicles?
A: Ideal does not distinguish between vehicles based on their size. It believes that users will choose based on their own needs. If users are concerned about the range and difficulty of charging for pure electric vehicles, they will choose extended range vehicles.Q7: How will pricing strategies be adjusted as the scale increases despite the unexpected increase in profitability? What are the competitive and product strategic prospects for the medium and long term?
A: Regarding pricing, we will ideally design different products to cover different price ranges (from 200,000 to 500,000 CNY), but without reducing prices. Our future competitive focus will be on three key areas: 1. We must solve the user mileage anxiety problem, so we are currently developing extended-range vehicles, and we will introduce more next year; 2. High-power fast charging is also essential, so we are developing two new pure electric platforms, Whale and Shark; 3. The family user segment is always our focus. We will also focus on ADAS and intelligent cockpits as the cornerstone of our product competitiveness.
🔗 Source: Li Auto
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.