“Why Li Xiang Always Mentions “Learning from Apple”? – Analysis of Ideal ONE and L9’s Product Strategy

Author: Zheng Senhong

“Every person who makes a product will research Apple, and hope that they can make their product as good as Apple’s.” This is what Li Xiang, the founder and CEO of Ideal Automotive, said after the Ideal L9 launch event.

Whether at a financial report meeting or a product launch event, why does Li Xiang always emphasize “learning from Apple”? The reason is that Apple always creates “gangbuster” products. Whether it is the iPod that redefined portable music devices in 2001, the iPhone that changed the pattern of the smartphone market in 2007, or the AirPods that redefined headphones in 2016, Apple can always redefine its products by creating “gangbuster” products.

The Ideal ONE, with its advantages of no range anxiety and comfortable riding experience, has steadily occupied the sales crown of new domestic carmakers’ sedans and mid-to-large-sized SUVs, with a total delivery volume of more than 170,000, making it a true “gangbuster.”

Now, Li Xiang is also applying the same strategy to the Ideal L9, a full-size SUV.

Applicable to Cars – the Theory of Copying Apple’s Success

In the past, Apple’s products gave the impression of “high price,” and consumers would not boldly praise the cost-effectiveness of Apple’s products. However, Li Xiang said that “Apple’s products have the best cost performance.”

He gave two examples: For instance, by comparing the iPhone 4 with the Nokia N97, the former was priced at 4,999 yuan at the time, while the latter was nearly 9,000 yuan. However, in terms of performance, the iPhone 4 was far superior to the Nokia N97, and the only phone that could compete with the iPhone 4 at the time was the Vertu phone, which sold for as much as 30,000 yuan.

For another example, if Apple’s MacBook Air is used for office work, it can almost achieve the same experience as a PC laptop that costs nearly 20,000 yuan, while the price of the MacBook Air is around 8,000 yuan.

Obviously, Li Xiang has copied his understanding of how Apple creates products to the automotive industry.

“Ideal L9 is the best flagship SUV for home use under 5 million yuan.” Li Xiang had already preheated the product with this statement before the launch event. Following this logic, is the Ideal L9 the SUV with the highest cost performance?

In fact, the only SUVs that overlap with the Ideal L9’s price of 4.568 million yuan are the BMW X3 and the Mercedes-Benz GLC.But LI L9 actually competes with BMW X7 and Mercedes-Benz GLB, which are two levels higher than BMW X3 and Mercedes-Benz GLC.

Li Xiang believes that Apple’s core philosophy is to provide a highly advanced product experience at a luxury price.

The LI L9 is a product under this philosophy.

Of course, achieving over-level competition in price can indeed establish a popular product image.

But the key issue is, can LI integrate upstream suppliers and downstream channels, and control scale and costs? Then what about Ideal Automobile?

Li Xiang gave an example: the entry-level Audi Q7 has a similar starting price to the LI L9, but Audi Q7 offers multiple powertrains, configuration versions, including four-cylinder gasoline/diesel, six-cylinder gasoline/diesel, etc. Multiple production lines also mean cumulated R&D costs.

On the contrary, Ideal follows the theory of controlling costs with a set configuration, making it standard. On the surface, car companies lose money in doing business, but if the LI L9 sells 150,000 units in a year, the average cost per unit may only be CNY 100-200.

In addition, the meaning of standard configuration can avoid mutual calculations between car companies and users, and can also reduce asset losses for users when changing cars in the future.

“Audi Q7 currently sells thousands of vehicles every month globally, while the sales of LI L9 are steadily surpassing LI ONE, even though it is CNY 100,000 more expensive,” this is Li Xiang’s expectation for the LI L9.

If production is reflected in cost control, self-research can completely prevent being restrained by suppliers.

Without investing money, people, and technology, it will always be restricted by suppliers.

Ideal knows the importance of self-research, so Ideal will continue to expand its self-research scale through cooperation and shareholding of suppliers to master the supply capacity in its own hands. Currently, Ideal has established supply-side joint ventures with San’an Semiconductor and Xinchendong Power.

Looking back at the R&D investment of Ideal in the past three years, R&D expenses were CNY 1.2 billion, CNY 1.1 billion, and CNY 3.29 billion, respectively, and the doubling growth indicates that Ideal continues to increase investment in R&D.Currently, there are four AI teams in the Ideanext layout, focusing on intelligent driving, intelligent cabin, factory management systems, and vehicle control.

Li Xiang has always pursued the product lineup of Apple, including their product planning, cost control, and market share, which he believes to be the perfect ecosystem.

However, in reality Ideanext still requires a long period of exploration. As Li Xiang has stated, there is currently no company that fully understands the secrets behind Apple’s success.

Li Xiang’s stubbornness in sticking to the “family positioning” of Ideanext has long been considered by many to be a niche market. However, in reality, 89% of users who purchase new vehicles costing over RMB 200,000 in China come from family groups.

Returning to the topic, every penny and every technology that Ideanext invests is centered around “family”. Considering that 89% of users have such demands cannot be considered a “niche market”.

In an increasingly competitive smart car market, what new products can Ideanext bring with their Ideanext L9?

Throughout the entire press conference, Li Xiang emphasized the word “family” the most. He even said that no matter how much money one could spend, one cannot buy a smart flagship full-size SUV that satisfies family needs like the Ideanext L9.

“Family use” and “luxury” have always been Ideanext’s product positioning. After labeling their product as the “dad’s car” with the Ideanext ONE, Ideanext L9 focused on maximizing family car needs from the perspective of “comfortable home”, “mobile home”, “smart home”, and “safe home”.

Firstly, Ideanext focused on providing a “comfortable home” for families.

For example, the intelligent air suspension system reduces the vehicle’s body by 40mm when getting on and off, conveniently accommodating elderly and children. Seating comfort has been taken care of in every row with the added features of electric adjustment, heating, ventilation, and massage functions for the front two rows.

Furthermore, the in-car refrigerator is a feature that optimizes the user experience. Li Xiang describes this as, “picking up your loved one in winter, you can prepare warm milk tea; when travelling with young children, you can use it to keep milk warm; during the summer, as a family, you can enjoy chilled drinks anytime, anywhere.”

These thoughtful designs demonstrate Ideanext L9’s dedication to providing a sincere and well-rounded experience for family users.

Secondly, Ideanext focused on providing a “mobile home” experience.

In terms of range, Li Xiang believes that extended range electric four-wheel drive is still the best solution for family SUVs.In combination with home charging, the ideal L9 can achieve the best energy combination of urban electricity and long-distance fuel, and the energy usage cost can be reduced by more than 80% compared to SUVs of the same level running on gasoline, which is 50% lower than that of compact hybrid cars.

In terms of overall vehicle structure, Ideal Auto maximizes the passenger space of L9 through a self-developed five-in-one driving module and range extender, surpassing the same level of competitors, and even rivaling MPV models.

Li Xiang said that the space of the first, second, and third rows of the L9 is exactly the same as that of the Buick GL8.

No wonder netizens joked: 10,000 yuan per square meter, 450,000 yuan for 4.5 square meters. No problem with a mobile home.

Thirdly, it’s a safe home.

In terms of intelligent driving development, Ideal Auto’s strategy is:

• Mainly based on visual perception, using BEV large models to achieve 360-degree perception.

• Using lidar and high-precision maps as assistance, and providing secure algorithms through additional visual and lidar modules.

Ideal L9 is equipped with the AV128 line lidar from Hesai on the roof, which can meet the long-range detection of up to 200 meters. (Related reading: Can Ideal L9 with a reservation system crush the competition with lidar?)

At the press conference, Li Xiang also demonstrated a high-speed limit test of the lidar in the dark night. The ideal L9, equipped with the AD Max automatic driving system, found a rollover car in front of it during the driving process, and promptly performed braking.

In addition, when driving on expressways, underground parking lots, elevated bridges, city streets, etc., Ideal L9 can achieve lane-level positioning and accurately output position information to vehicles by independently realizing the combined navigation and positioning system based on MEMS inertial navigation technology, satellite navigation, and vehicle information research and development.

According to Lang Xianpeng, vice president of intelligent driving at Ideal Auto, the company started to switch to a full-stack self-developed solution in 2021. The biggest change is from a linear process to a closed-loop process, and began to develop self-driving in a data-driven way.

Currently, Ideal Auto has an effective learning scenario total mileage of 190 million kilometers, second only to Tesla.

According to the ideal intelligent driving route planning diagram, the ideal plan is to achieve city autonomous driving in 2025:

• In 2020, the ideal AD 1.0 version realizes ADAS function;

• From 2021 to 2022, the ideal AD Max 3.0 version realizes high-speed NOA;

• In 2023, the ideal AD Max 4.0 version realizes city NOA;

• In 2025, the ideal AD Max 5.0 version realizes city FSD.

Through the three levels of research and development, algorithms, and data, Ideal will iterate from “data feedback” to “full-chain automation” in the intelligent driving technology system and achieve effective mileage data exceeding 10 billion kilometers in 2025.

Fourth is smart home.

In addition to intelligent driving research and development, the direction where Ideal invests the most is artificial intelligence and three-dimensional interaction.

Li Xiang believes that smart electric vehicles carry two of the most important purposes, one is renewable energy, and the other is that the interaction of information will enter the three-dimensional artificial intelligence from the past two-dimensional and traditional PC Internet.

The space inside the Ideal L9 car has been transformed into “five screens with three-dimensional interaction”. On the perception level, visual 3D ToF and multi-sound zone microphones have been added. The visual perception accuracy can reach 1mm. The self-developed MIMO_NET algorithm can increase the positioning accuracy of sound zones by 20% and reduce the recognition error rate of the main sound zone in scenes of multiple people talking by more than 30%.

Ideal collects visual, language, and touch perception information into one 3D big picture and uses a set of algorithms to understand and provide feedback.

The cognitive map contains the construction of three capabilities: knowledge map, logical reasoning, and user portraits, allowing “Ideal classmates” to obtain various knowledge and establish thinking and logical reasoning abilities through self-learning. Based on different users and scenarios, the robot can make corresponding interactions.

Gou Xiaofei, Vice President of Ideal Intelligent Space, stated that in the future, “Ideal classmates” will not only be a voice assistant but will also be upgraded to an intelligent space robot, even possessing personalized characteristics and becoming a member of the family.

As Li Xiang said, every ideal penny and every piece of technology is built around “family”.

“Apple has two core principles in creating products: one is to create luxurious products that everyone can afford, and the other is to make unique innovations in experience and technology. Our understanding of Apple is like this, and we will also insist on doing it this way,” Li Xiang said.

From this statement, the ideal L9 already has the two core principles of Apple’s product creation and may have a far higher chance of becoming a bestseller than the Ideal ONE.

Focusing on “Family,” Is the Ideal L9 the Best Full-size SUV Under 5 Million Yuan?

Who will buy the Ideal L9? Is the Ideal L9 the best SUV under 5 million yuan?

These are the two most frequently asked questions in the Ideal L9 press conference chat.

User portraits determine the market positioning of a product.

The keyword for Ideal is “family,” and the user groups’ portraits are very clear.

First are the increase and repurchase users of the Ideal ONE.

Li Xiang believes that only a small percentage of people, about 10%, suddenly rise from a budget of 300,000-350,000 yuan to nearly 500,000 yuan. It is not the real market of the Ideal L9.

Second are incremental purchase users.

Choosing a new energy vehicle as the second vehicle type, the vast majority of consumers want to reduce their car’s operating costs and deal with license plate restrictions. The Ideal L9 is only for fathers who need to create a second space for their family. This group will struggle between new energy MPVs and the Ideal L9.

Finally, the first purchase users.

The consumption demand of this group is also very clear. In addition to having family as the primary need, they also have a high willingness to try out intelligence, which is the real market for the Ideal L9.

As for whether the Ideal L9 has a price tag of 5 million yuan, it also depends on consumer’s car purchase needs.

An iPhone 13 and a Redmi 9A are both smartphones, but there is still a significant difference in brand value between them.

For consumers who pursue brand value, Apple is the best smartphone in the world.

For consumers who pursue practicality, a multi-functional entry-level phone is the king of cost-effectiveness.

At a price of 500,000 yuan, the Ideal L9, as a product that breaks the boundaries between cars and homes, has the potential for competitive breakthroughs.

However, Li Xiang quoted the views of Xie Weishan, the founder of Junzhi Strategic Consulting, on how to verify the success of a brand and product:

• Will consumers buy it?

• Will salespeople sell it?

• Do competitors hate you?Obviously, this is a review and practice for Li Xiang in response to the recent overwhelming popularity of the Ideal L9.

In Li Xiang, we see not only a father who deeply understands the underlying needs of consumers but also a product manager who knows how to analyze explosive growth trends.

There is no reason why the Ideal L9 will not be popular and become a “best-seller” in Li Xiang’s eyes.

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.