Q1: What is the current effective production capacity? When can it return to normal levels impacted by the semiconductor shortage?

Kevin Shen (President): The impact of the semiconductor shortage is affecting the entire industry. The Ideal Automotive Changzhou factory is operating on a two-shift system with a daily capacity of 500+. With the production of the new Ideal ONE and the ongoing chip shortage, capacity has not yet reached the ideal state. It is expected that monthly capacity will reach 10,000+ by September of this year.

Q2: How will the gross profit of new and old models differ?

In the long term, the gross profit margin of new cars will be the same as that of the current Ideal ONE. In the second quarter, there will be promotions for the current Ideal ONE and new cars will be sold at a price increase of 10,000 RMB in April and May.

Q3: About the number of retail stores: There were 52 at the end of last year and 73 in April of this year. Can this year’s target be achieved?

The construction progress has slowed down due to the Spring Festival holiday and sporadic outbreaks of COVID-19 in the north in the first quarter of this year. But currently, 50 IdealAuto stores are under construction, and the target of reaching 200 retail stores this year remains unchanged, which can be caught up in the second half of the year.

Q4: Regarding pricing: Does Ideal Auto’s pricing strategy for the new Ideal ONE update mean that it plans to position itself as a high-end brand, which is different from its competitors’ strategies?

Our approach is to price the product based on its value to the user. The 10,000 RMB price increase is appropriate, and the new Ideal ONE model is more competitive.

Q5: Why did the chip supplier choose Horizon Robotics?

Kai Wang (CTO): In choosing a supplier, Ideal Auto considers five factors: first, the overall performance of the product, which is suitable for the Journey 3; second, the openness, compatibility, and flexibility of the product, such as Mobileye, which is less flexible in comparison; third, whether the supplier can provide adequate support, and Horizon Robotics has an office in Beijing that can provide timely support; fourth, an appropriate SOP; and fifth, cost-effectiveness.

Q6: In the next two or three years, what new features will Ideal Auto’s ADAS have?

Kai Wang (CTO): After releasing the NOA development roadmap, we will further expand the coverage of high-precision maps in the fourth quarter of this year. Next year, we will enhance processing capabilities and gradually reach L4 level.

Q7: The NOA is not charged, but is the 10,000 RMB increase in the price of a new car the R&D cost of NOA?

The 10,000 RMB is not specifically targeted at any new features but evaluated as a whole. Li Xiang has said that NOA is standard and not charged.

Q8: What role does iDrive play in R&D? Is it fully self-developed, and does iDrive participate?

There is no information in the provided text about iDrive or its role in R&D.# Kai Wang (CTO):

Hongjing Intelligent Driving is the first-tier supplier of Ideal Automobile hardware. Currently, the ADAS team of Ideal Automobile has 300 people responsible for software and hardware development, and self-research of whole stack. In terms of hardware, Hongjing Intelligent Driving participated in the design collaboration to make the whole process more efficient.

Q9: Can Mobileye Q4, Horizon Journey 3 and NVIDIA Orin be seamlessly integrated on different systems?

Kai Wang (CTO): Ideal Automobile insists on self-research of whole stack to ensure that the same effect can be achieved on different platforms.

Kevin Shen (President):

Q10: Many electric vehicle models were exhibited at the Shanghai Auto Show this year. Will it affect the development plan of Ideal Automobile’s high-voltage pure electric Whale and Shark platforms in 2023?

Ideal Automobile would like to reiterate that ultra-fast charging is key for pure electric. Ideal Automobile will develop Whale and Shark platforms and ultra-fast charging technology according to the original plan without change. Of course, if there are more resources, the R&D progress will be accelerated. Currently, we will follow the original plan.

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.