Author: Tian Hui
In June, Ideal Auto topped the sales charts for new energy vehicle brands.
Moreover, Ideal Auto achieved this feat single-handedly, but still managed to come out on top in the fierce competition.
Ideal Auto’s success was also due to the transition from old to new models. On May 25th, the new Ideal ONE model was released. By June, the number of Ideal ONE insured cars reached a new high of 7,827, surpassing NIO’s 7,777, making it the champion among new car makers.
The new Ideal ONE’s monthly sales exceeded 7,000 units in no time, and is expected to exceed 10,000 units, a more aggressive momentum than the old model’s sales, which peaked at just over 5,000 units per month.
This type of growth is more akin to an Internet product. A truly good Internet product must continue to evolve. Each iteration can lead to an increase in users.
A truly good smart car should do the same.
Deliver on release, sell on delivery
The new Ideal ONE was released on the evening of May 26th, and by May 31st, a total of 1,072 units were insured in seven days, an average of 153 new vehicles insured per day.
In June, Ideal Auto’s efficiency continued to soar, with 7,827 deliveries in a single month, perhaps one of the fastest records for new energy vehicles.
If “deliver on release” is a test of a car company’s internal coordination capabilities, then “sell on delivery” is the ultimate test of the product strength of a new car model. Several luxury brands have experienced low sales of updated models due to product definition issues.
After Mercedes E-Class facelifted with a 1.5T engine, sales declined and had to switch back to a 2.0T engine. Although Audi Q7 was upgraded to Q7L, the sales of the new model did not match the old one, and it wasn’t until the upgraded Q8 model was launched that Audi was able to regain its former glory.
The sales performance of the old Ideal ONE was quite good, even groundbreaking, which made the extended-range route stand firm. The logic of the 2021 model should be to stick to the things that the old Ideal ONE has done right: clear user definition, unique driving experience, and groundbreaking intelligent cockpit experience, among others, without causing chaos in these areas. At the same time, it should also strive for continuous improvement.When the old model of the Ideal One was first launched, it had already achieved excellence in many aspects. However, Ideal Automotive remains committed to evolution and once again delivers a product beyond expectations, with upgraded features such as a more luxurious intelligent cockpit, stronger intelligent driving assistance functions, and longer endurance, which have won orders and caught the attention of followers.
The increase in Ideal Automotive’s sales reflects product, sales, and operational capabilities. However, both the 2021 and old models of the Ideal One have a product power of “1”, and sales, reputation, etc. are all followed by “0”.
Strong Product Performance as Always
Among the new Chinese carmakers, Ideal is the one most similar to Tesla.
With little marketing or advertising, Ideal Automotive has won a large number of fans based solely on the product power and word-of-mouth of its previous products, forming a positive feedback loop of “product power-satisfaction-word-of-mouth-sales-continued improvement of product power”. This is the strategy of Tesla and Ideal Automotive, which is simple, pure, but also difficult.
The Ideal One model is an intelligent electric vehicle that can run on either gasoline or electricity and has a very outstanding price-performance ratio among its peers. The 2021 model of the Ideal One has been upgraded based on the old model to address consumer demands more effectively.
The primary upgrade is in the intelligent assisted driving part.
In terms of hardware, the 2021 model of the Ideal One is equipped with the world’s first mass-produced 8 million-pixel, car-grade camera, which can achieve recognition accuracy at the level of 4K, an effective visible distance of 200 meters, and an angle of 120°.
The 2021 model of the Ideal One is also equipped with five millimeter-wave radars, compared to only one in the 2020 model. All five millimeter-wave radars are Bosch’s fifth-generation products, with each radar having a recognition range of 150° and a detection distance of over 110 meters.
The automatic driving chip of the 2021 model of the Ideal One has switched from the Mobileye series to the domestic autonomous chip, Horizon Journey3, and is equipped with two chips with a computing power of 10TOPs at one time.
Hardware upgrades, combined with software upgrades, will undoubtedly bring users a qualitative change in their intelligent driving experience.
In terms of intelligent driving perception, the 2021 model of the Ideal One can effectively recognize roadside shoulders, in addition to recognizing traffic lights and cones.
In terms of functionality, the 2021 model of the Ideal One will support Navigation-Assisted Driving, allowing it to automatically enter and exit highways and accelerate and change lanes based on navigation and map data under certain conditions.In addition to the intelligent driving assistance system, the 2021 Ideal ONE has upgraded its seating to be softer and adjusted its interior design style while adding exterior colors, which addresses the issue of hard seats that received much feedback from old car owners. The model also provides external power function.
The 2021 Ideal ONE’s specific upgraded configuration shows that Ideal Automobile accurately grasps user demand. The driving comfort and intelligent driving assistance system, which received much feedback from old car owners, have been upgraded to targeted solutions.
The 2021 Ideal ONE has also optimized the range extender system, which had good user feedback, and increased the comprehensive cruising range to 1080 km. At the same time, the engine oil consumption has dropped to 6.05 liters/100 km, which is unprecedented in the large-sized SUVs with four-wheel drive.
Price is a key factor affecting old car owners’ decision to upgrade their cars. In the upgrade process, Ideal Automobile adopted an unusual price increase strategy, raising the price of the 2021 Ideal ONE by 10,000 RMB to 338,000 RMB. Despite the price increase, the 2021 Ideal ONE was still popular upon its launch, reflecting its strong product competitiveness.
The Most Efficient Automaker
The fact that the new Ideal ONE can be launched and delivered immediately upon ordering, and the high sales volume, reflects Ideal Automobile’s high level of organizational efficiency. The company’s high level of synergy among research and development, production, and sales is clearly demonstrated.
Ideal Automobile may be the new automaker that places the most emphasis on organizational capacity building. This is evident from the founder and CEO Li Xiang’s time allocation – he is only responsible for two parts of the business: organizational management and product strategy.
How effective is Li Xiang’s organizational efficiency? The 2021 Ideal ONE model’s upgrade can be seen as a small test. From a results perspective, the launch of the new Ideal ONE model coordinated many aspects, such as production, research and development, marketing, and store delivery, realizing immediate deliveries and high sales volume.
Regarding research and development and the supply chain, the upgrade of the 2021 Ideal ONE from Mobileye chips to Horizon Journey 3 autonomous driving chips inevitably faced risks concerning development cycles and supply pressures. However, from the results of the launch, the 2021 Ideal ONE was not affected by the chip shortage.We can speculate from Li Xiang’s speech at the 2021 Li Auto ONE launch that Li Auto has broken through the traditional automotive supply chain cooperation model and forged an innovative collaboration with Horizon Robotics to develop the NOA navigation-assisted driving function based on the Horizon Journey 3 chip. Li Xiang praised Horizon as the team with the highest and most professional level of cooperation. These remarks highlight Li Auto’s high expectations for its autonomous driving and procurement teams.
Li Auto was one of the earliest new energy vehicle startups to realize the importance of building self-owned factories in production. Its Changzhou factory started construction during the SEV microcar project, and after acquiring the qualification through the acquisition of Lifan Automobile, the rapid mass production of the Li Auto ONE model was made possible. Li Auto delivered 50,000 vehicles in just 17 months, and factory capacity was a prerequisite for achieving this feat.
In terms of delivery to consumers, Li Auto adheres to a self-operated sales system, despite being slower in store construction speed compared to a distribution-based system. However, the efficiency and experience of the direct sales channels are one of Li Auto’s outstanding competitive advantages.
In the global automotive industry, new energy vehicles are the future development direction. Li Auto has also felt increased competition from its competitors, but efficiency has gradually become its moat. Internally, Li Auto has developed the Li Auto Working Method (LBP) and integrated it with management languages such as LSA, OKR, and CFR to create a unified working language.
In June, Li Auto not only dominated the new energy vehicle model rankings and new automotive force rankings, but also ranked tenth in the unrestricted luxury brand sales rankings.
From high-end prices and leading sales to luxury brands, what else is missing? Reputation.
The reputation of traditional automakers often signifies sustained high quality and high performance, and many brands have their unique labels. In the top ten luxury brand sales ranking in June, Li Auto and Tesla were the only two specialized intelligent and electric drive brands. Li Auto already has a clear advantage in range extending drive and intelligence.
What Li Auto needs to do is to ensure quality like traditional luxury automotive brands and establish and strengthen the label effect of electric and intelligent drives. As long as the positive feedback loop of “product strength – satisfaction – reputation – sales – continuing to improve product strength” is continually amplified and sustained, Li Auto has the opportunity to become the luxury brand of the intelligent electric vehicle era.
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.