Dingling Xiaonaozhong, class monitor is here to summarize the content. In this conference call of Ideal Q4 and full-year financial report, a lot of knowledge points were revealed. We must remember, remember, and remember the important things. Let’s start the conference call.
Ideal will challenge and take 20% market share of the entire luxury SUV market in the price range of 300,000 to 500,000 RMB this year.
The mileage of the High-speed NOA assisted driving is close to 100 million kilometers. Only during the Spring Festival period in 2023, the mileage of all car models with high-speed NOA driving has reached nearly 8 million kilometers.
This year, Ideal will further expand the navigation-assisted driving capabilities to urban scenarios and plan to open the early bird user testing of city NOA on Ideal AD Max in the fourth quarter.
Q: How long will it take to achieve a monthly delivery of 30,000 vehicles for the overall delivery of 789, and will there be pressure on the supply side?
A: We strive to achieve a delivery volume of 25,000 to 30,000 in the second quarter. We did encounter some problems in the second half of 2022 in terms of capacity ramping up. Therefore, we upgraded the processes to a certain extent in the fourth quarter of last year and the first quarter of this year, and made more reasonable resource allocation in terms of supply, sales, and delivery, as well as improved the efficiency of suppliers.
Q: How will the purchase of batteries (with lower upstream prices) affect the profit of the entire vehicle, and when can we see the impact of battery costs on gross profit?
A: If the price of batteries can return to a rational range, it is good news for both upstream battery factories and vehicle factories in the new energy market. With the increase of new models and sales volume, Ideal needs a multi-supplier strategy in the long term, which is not only for supply security but also for the efficiency of multi-project R&D. Lithium carbonate prices have fallen to 400,000 RMB/ton in the past two days. The drop in lithium prices is inevitable, but negotiation with suppliers is still ongoing, and there is no new news for the time being.
Q: L9 has a large proportion of sales in the quarter, but the gross profit per vehicle is not as good as Q2. Considering that the price of L9 is higher, how does the management team view the decline in gross profit?
A: L8 and L9 were both in the stage of capacity ramping up in the fourth quarter, and the early costs were relatively high.
Q: How does the pure electric product line achieve a similar effect as the extended range product line in terms of product positioning and gross profit?
A: The extended range solves the problem of high battery cost and difficult and slow charging. The pure electric product actually solves the same problem. The key to pure electric products is not whether they can provide 400 km of energy replenishment efficiency in 10 minutes, but whether the infrastructure layout can meet the requirements. In terms of cost, one of the factors we consider when building our silicon carbide electric drive factory is cost. Our new car using 800 V high-voltage silicon carbide electric drive can save 15% of battery power consumption compared with 400 V products. And the experience provided by our pure electric products is not inferior to that of extended range products.Q: Have L7 orders exceeded the total of L8 and L9?
A: As for the new Ideal L7 vehicle, its sales, like usual, will take some time to pick up. In terms of guidance for first-quarter sales, we expect the number to include several thousand units of L7, but deliveries will mainly focus on L8 and L9. As mentioned earlier, May will be the first full delivery month for the L-series vehicles, including the Air model. We already have some orders for the Air, but test drives have not yet come to our stores, so many consumers will wait until after the test drive to place their order.
Q: What will the gross margin of Q1 be roughly?
A: In general, they will affect Ideal’s profit margin by roughly 2%. Overall, our gross margin guidance for this year will remain above 20%.
Q: Can you tell us about the impact of Shanghai license plate policies on Ideal’s sales, and will you launch pure electric MPVs or sedans?
A: Orders in Shanghai were relatively poor in January because sales were released toward the end of last year, but they have since improved. We predict that the situation in Shanghai will ultimately be similar to that in Beijing, where Ideal products will capture a comparable market share in the market without new energy indicators.
The release of flagship products is usually tied to critical technology, such as the release of the Qualcomm 8295 chipset later this year. Regarding pure electric product lines, we will launch serial products similar to L7, which will satisfy the demands of the 200,000 to 500,000 RMB household market.
Q: The estimated amount of 20% of the 30 to 50 RMB SUV market, which is 300,000 to 500,000, is 35,000. Can you verify this data, and how is the market share of 20% determined, and what is different about the 200,000 to 300,000 market?
A: In 2022, our market share in this market segment (30 to 50 RMB SUV) is 9.5%, with the size of the market being around 1.4 million units this year. We have set a target of 20% in order to double our sales. Additionally, the competition is fierce in the 200,000 to 300,000 RMB market, and we need to have a larger scale before we can enter this range with sufficient cost competitiveness.
Q: What impact will AI have on the automotive market, and what changes will it bring to users?A: We have been paying close attention to the application of AI in the automotive industry. Recently, Chat-GPT has demonstrated many possibilities. In fact, our 3D gesture control is one of its applications, and autonomous driving is also one of them.
Q: What is your view on the possible infighting among the three models of L789?
A9: The user image of L789 is actually quite clear. In fact, there are not many situations of infighting, and even the release of L7 has attracted attention to L8. What we hope is to form a complete market coverage through L789, such as choosing between L7 and L8, or choosing between L8 and L9, rather than turning around and buying products of other brands after seeing our products. This is the strategy of our product sequence.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email firstname.lastname@example.org.