The Ideal ONE’s Sales Exceed Expectations
Contrary to most people’s expectations, the sales of the 2021 Ideal ONE have been soaring, even exceeding Ideal’s own monthly goal of breaking 10,000. Under the premise of limited supply chain, the average monthly sales volume has reached 13485 units, surpassing the sales record of single product in the new car camp.
What does 13485 vehicles mean? According to sales data available at the end of October:
- The Ideal ONE will most likely enter the top three in the high-end SUV list.
- The Ideal ONE will undoubtedly be the top one in the mid-to-large SUV list.
So the conclusion is clear: the Ideal ONE has indisputably become a champion with weight and scale.
Network Synergy Organization
If you look at the sales trend chart of Ideal Auto, you will find a turning point in June, and since then, the monthly sales of Ideal have not been lower than 7000. On May 25, the 2021 Ideal ONE was released. Therefore, the product is still the foundation of everything.
However, compared with the older model, the facelift of the 2021 Ideal ONE is mysteriously interesting. The logic of Ideal’s facelift stands completely opposite to that of a traditional automaker’s facelift, as we have mentioned in our previous article:
In terms of the perceptible aspects for users, such as styling and interior, there is little change in the Ideal ONE. However, in terms of the powertrain, seat layout and AD assisted driving systems, among other aspects, the Ideal ONE has updated comprehensively.
Finally, the starting price of the Ideal ONE has also increased to 33.8 million. From the perspective of trial driving sales on the first line, such a facelift strategy is not as friendly as a simple “change in the front styling”, but the sales trend shows that the new Ideal ONE has further strengthened the product positioning of “family car” and entered a wider range of households at a higher transaction price.
The so-called “all the problems exposed in the product are ultimately organizational problems”. Conversely, the success of the Ideal ONE’s facelift should also be traced back to the transformation of Ideal Auto’s organization.
In different occasions, Li Xiang, founder, chairman and CEO of Ideal Auto, has mentioned the value of “network synergy” in the era of intelligent cars.In 2018, Li Xiang realized that the traditional offline, serial process management in the traditional automotive industry was no longer sufficient for Ideal, an intelligent terminal enterprise, to develop intelligent software, user interaction platforms, and sales systems. The product definition and R&D for Smart terminals were becoming increasingly parallel, and cross departmental collaboration was becoming increasingly frequent, nearly year-round.
There was no alternative but to adapt the organizational structure for “mesh cooperation.”
Li Xiang once shared Ideal’s organizational change practice at the Jingwei Billionaire Academy. In short, by using the OKR goal and key results management tool for “information transparency,” “delegation of power,” and “focus on growth,” Ideal activated the entire organization and aligned everyone’s understanding to begin making decisions on their own accord, and effectively connecting and collaborating with colleagues around them, ultimately achieving growth together.
For example, in the case of the updated Ideal ONE, the first step was to align understanding: where should the optimization of the old Ideal ONE begin? That is, where should the Ideal ONE go?
Li Xiang did a detailed breakdown in a lecture within Ideal on this question: first, serve the family, in other words, every product of Ideal Automotive is not just for drivers but for every member of the family; second, the car will become a mobile space to connect the car and the home, therefore, it should be self-driving.
So, the essential goal of the updated Ideal ONE is a car that is intelligently self-driving (depending on the maturity of the industry) and designed for families.
This is precisely a macro goal that cannot be assigned or broken down for any single department to complete. It depends on effective mesh cooperation between all single points within the organization.
Through the release of the 2021 Ideal ONE, the practice of “mesh cooperation” has been preliminarily validated.
Products of mesh cooperation
The 2021 Ideal ONE embodies too many unique products compared to the industry.
Firstly, upon the initial release of Ideal ONE, Ideal used to provide 6/7 seat layout options. However, in the 2021 version, Ideal chose to provide only the 6 seat layout.
For car companies, providing another seat layout option doesn’t necessarily indicate a substantial increase in R&D investment. On the other hand, this appears to be a manifestation of responding to the diverse needs of different customers. Therefore, there are plenty of mid-to-large-sized SUVs that offer 3 different layouts, 5/6/7 seats simultaneously on the market.
Adding more options is not so difficult, but reducing the number of options is difficult, even leaving the single, right choice. The 6-seat Ideal ONE reflects Ideal’s product vision of “creating cars for families.”Compared to the 7-seat layout, the benefit of 6 seats is not an abundant seat, but there are additional inconvenient three-row entry and exit methods, cramped and oppressively three-row space, and a fatal atmosphere of physical separation.
However, compared to the 7-seat layout, the 6-seat layout is clearly more suitable for the scenario of the whole family going on a trip. Because the middle of the second row is naturally connected, everyone in the car can communicate and interact conveniently. In addition to the increasing demand for independent seats in the second row in business, it is also the most natural scenario for families with children and elderly people to go out.
Following this logic, Ideal ONE designed the first industry-buried four microphone design at that time. In the new Ideal ONE, it has further evolved into a full-vehicle voice interaction that supports continuous conversation, support for interruption at any time, support for visible speech, and support for locked and cross-sound area contextual conversation through OTA iteration.
If you don’t delve into the needs of multi-directional and multi-person voice interactions in the scenario of the whole family’s car travel, this product will be killed off at the stage of approving the four microphones. Let alone then.
Fan Haoyu, the deputy general manager of Ideal Intelligent Control and System, who leads the Ideal cockpit product, said, “Ideal has been designing not just for drivers since day one. We design for everyone in the space.”
Finally, we have to return to the criticized large battery range-extender route.
Since its release on October 18, 2018, the marketing department, engineers, management, and even Li Xiang himself of Ideal Motors have repeatedly popularized the understanding of large battery range-extenders in various public occasions, which is significantly more difficult to understand than pure electric power technology routes.
But the effect is minimal. The public’s perception is naturally black or white, and this engineering logic of “simple=right, complex=wrong” has a wide market among competitor engineers and even senior management.
“Can refuel” means “incomplete revolution,” which means the “remnants” of fuel vehicles, and the flooding of social networks and news platforms that hybrids have no future.
No one paid attention until 2020, when the proportion of family parking spaces in first-tier cities in China that support the installation of charging piles was still less than 25%, and no one knew the huge supply-demand gap of 17.7:1 between China’s new energy vehicle ownership and public charging piles ownership at that time.Even in the era of significantly increased charging infrastructure, it is imperative to recognize that demand for new energy vehicles is rapidly increasing at a rate that is no less than the expansion of the charging network. The present supply and demand situation is still far from sanguine.
The misunderstood extended-range feature of large battery (ER-EV) is essentially the value proposition of “city driving with electricity, long-distance driving with gasoline, electric drive all the time and fuel supplementation”.
With the support of ER-EV, LI Auto has penetrated into the vast majority of Chinese provinces and cities far beyond the new energy vehicle subsidy and license plate quota policy resource centers in tier-one and tier-two cities, and as of Q3 2020, the proportion of LI ONE sales in non-new-energy-vehicle-license-plate-advantage cities had risen to 65%.
In November, 13,485 automobile owners voted with their RMB to validate the value of this approach in the current market.
Perhaps even more notably, despite the record delivery numbers, LI Auto only has 170 retail centers throughout the country. This figure is approximately one-tenth of the scale of China’s largest North-South Volkswagen dealership system.
Therefore, the story of LI ONE in November is not only a new record but also a new starting point. As for Li Xiang’s persistence and potential in product development, the consumer market will continue to reveal new answers.
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.