Ideal cars are walking on the fast lane of increasing volume.
On September 3rd, Ideal Auto released its latest weekly sales report, ranking first in sales among new force brands in the Chinese market for 19 consecutive weeks. In the just passed August, Ideal Automobile also maintained its position as the top new force, with deliveries increasing by 37.8% year-on-year to 48122 vehicles.
The delivery volume has skyrocketed, and the fundamentals of Ideal Automotive's performance are also constantly strengthening.
Looking back at the second quarter of Ideal Automobile, the delivery volume returned to the "100000 mark", the milestone of cumulative delivery of 800000 vehicles was achieved, the operating profit turned positive again, holding nearly 100 billion yuan in cash reserves, and the gross profit margin remained around 20%, surpassing many competitors
These achievements are not easy to achieve in the terminal car market where the industry is engulfed in a sea of blood and price wars are raging. After rapidly adjusting its business strategy in Q2, Ideal Auto, which refocuses on users and value, is taking more solid steps within the "Billion Revenue Club" and continuing to challenge the limits of growth.
Double increase in revenue and delivery volume, occupying the minds of household users in multiple segmented markets
As of Q2 this year, Ideal Auto has achieved profitability for seven consecutive quarters.
According to the financial report, in the second quarter of this year, Ideal Auto's net profit was 1.1 billion yuan (the same below), an increase of 86.2% compared to the previous quarter; The operating profit has once again turned positive, with a quarterly operating profit of 468 million yuan.
Behind the leading new forces in car manufacturing in terms of profitability, their revenue scale is still climbing quarter by quarter. The total revenue of Ideal Automobile in Q2 was 31.7 billion yuan, a year-on-year increase of 10.6%, and an increase of 23.6% compared to 25.6 billion yuan in Q1 of 2024.
Revenue has surged, thanks to the sale of more cars. In Q2 of this year, Ideal Auto's vehicle sales revenue reached 30.3 billion yuan, a year-on-year increase of 8.4% and a month on month increase of 25.0%. In that quarter, the total delivery volume of Ideal Automobile was 108581 units, a year-on-year increase of 25.5% and a 35% increase compared to the first quarter, with sales steadily climbing.
With excellent product strength and precise positioning of user needs, Ideal Automobile maintains a leading position in different price segments of the market, firmly occupying the minds of household users.
Among them, in the new energy vehicle market of over 300000 yuan in China, despite the continuous influx of new players, the ideal position in the market is still difficult to shake. Since the end of 2022, Ideal Automobile has won the sales championship for seven consecutive quarters.
In the second quarter of this year, the Ideal L7 and Ideal L8 dominated the sales of mid to large new energy SUVs priced at over 300000 yuan, with the Ideal L9 still being one of the top choices for full-size SUV users. As of now, the cumulative delivery of Ideal L9 and Ideal L7 has exceeded 200000 units, and the cumulative delivery of Ideal L8 has exceeded 150000 units.
After entering the 200000 yuan segment of the Ideal L6, Ideal Auto has once again experienced explosive sales.
Data shows that after its launch in April, the Ideal L6 had over 10000 orders within 72 hours and sold over 10000 units in its first full delivery month. After 102 days on the market, its cumulative delivery exceeded 60000 vehicles. Since May, the Ideal L6 has been the best-selling mid to large SUV for three consecutive months. Since June, the delivery volume of Ideal L6 has exceeded 20000 for two consecutive months. In June and July, in the passenger car market with a price of over 200000 yuan, the Ideal L6's sales were second only to Tesla Model Y, making it an absolute bestseller in the market.
In the industry's view, focusing on the real needs of home users and leading other competitors in the same price range in product strength is the fundamental reason for the sustained hot sales of the Ideal L6. The advantages of good comfort, more agile and youthful appearance, good power and maneuverability have all successfully propelled the Ideal L6 to become a bestseller.
Vigorously invest in research and development, establish self built laboratories to support core technology self research
Behind the continuous improvement of performance, if there is food in hand, there is no panic in the heart. According to the financial report, as of June 30, 2024, Ideal Auto's cash position was RMB 97.3 billion. The nearly 100 billion yuan of cash lying on the balance sheet will also support Ideal Automobile's sustained long-term investment, thereby winning the future.
At present, Ideal Automobile is continuously increasing its research and development investment, committed to transforming technology research and development into greater user value.
According to the financial report, the R&D expenses of Ideal Automobile Q2 were 3 billion yuan, an increase of 24.8% year-on-year. Ideal Automobile regards self-developed core technologies as an important cornerstone for its long-term development. In 2024, it will invest 3 billion yuan in technology research and development for two consecutive quarters, promoting high-quality product iteration and exceeding user needs.
In order to achieve self-developed core technologies, Ideal Automobile has established a total of 89 laboratories in Beijing, Shanghai, and Changzhou, which can realize full chain development and experimentation including material level testing, component level testing, system level testing, and vehicle level testing. In the official view, self-developed technology is beneficial for rapid iteration and updating of functions, enhancing the market competitiveness of enterprises and products, and driving the common development of the new energy industry chain.
With unremitting research and development investment, Ideal Automobile no longer follows the footsteps of its predecessors. In the end-to-end era, not only has it entered the first tier of intelligent driving, but it has also achieved technological architecture innovation.
At the Chengdu Auto Show, which opened on August 30th, Ideal Auto announced that the new generation of Ideal Intelligent Driving, based on end-to-end and VLM visual language models, has officially launched a recruitment for a 10000 person experience group. At present, Ideal Auto has over 2.2 billion intelligent driving miles and 5.39 FLOPS training computing power. It is expected that by the end of 2024, the training data of Ideal Automobile will exceed 3 billion kilometers, and the training computing power will exceed 8 EFLOPS. On that day, Ideal Auto OTA 6.2 launched its push.
In terms of technological research and development, Ideal Auto is not self interested, but always puts user value first.
The input-output efficiency of Ideal Automobile in intelligent driving has always been relatively high. As for the measurement indicators, we believe they are result oriented and should be viewed from two aspects. Firstly, whether users are willing to use it, such as the duration of intelligent driving use, the proportion of mileage, etc.; secondly, whether users are willing to buy it, "said Ma Donghui, President and Chief Engineer of Ideal Automobile, during the Q2 financial conference call.
From the market perspective, intelligent driving is playing a positive role in driving the sales of ideal cars. The data shows that the proportion of potential users coming to test drive NOA in stores has doubled, and the proportion of AD Max orders for various models is increasing, especially for models over 300000 yuan, where AD Max orders account for nearly 70%.
We believe that starting from end-to-end+VLM, the threshold for intelligent driving research and development has been established, because from this generation onwards, it is the true way to use artificial intelligence to do intelligent driving. Artificial intelligence requires a large amount of data and computing power, which will increase the advantages of enterprises with advanced intelligent driving vehicle ownership and sufficient R&D investment in intelligent driving, and effectively promote sales growth. Sales growth will bring about an increase in ownership and R&D investment, which is a continuous positive snowball process, "Ma Donghui pointed out.
Expanding stores and replenishing energy are both important, and the turning point for pure electric vehicles has arrived
In addition to long-term investment in research and development, channels and energy replenishment systems are also the focus of the ideal automotive layout.
In the sales and service network, corresponding to the richness of the product matrix and the growth of ownership, Ideal Automobile continues to upgrade and expand its sales and service network. In the second quarter of this year, the proportion of Ideal Auto Center stores has increased to 31% and the number of store booths has increased by nearly 13% month on month by replacing the rear mall stores with the center stores of the head car city and upgrading existing mall stores.
As of July 31, 2024, Ideal Auto operates 487 retail centers in 146 cities across the country; Operates 411 after-sales maintenance centers and authorized sheet metal spray centers in 220 cities.
As the saying goes, 'sharpening the knife does not hinder the chopping of wood'. After announcing that it would no longer release new pure electric products within the year, Ideal Automobile has focused on the rapid expansion of its charging network to accelerate the "zero to one" pace of its pure electric layout.
As of September 8th, Ideal Auto has 757 Ideal Supercharging stations and 3556 Ideal Charging piles across 27 provinces and 156 cities in China.
According to the plan, by the end of 2024, Ideal Automobile will have over 2000 supercharging stations open on highways and cities nationwide, with a coverage rate of over 90% in core urban areas of key cities and a coverage rate of over 70% in national highway trunk mileage.
In the official view, the appropriate time to launch a product into the market is when the number of self operated supercharging stations reaches a level similar to Tesla China. And this turning point will come next year.
According to the schedule disclosed during the Q2 conference call, Ideal Auto will launch multiple 800V high-voltage pure electric models in 2025, among which a new pure electric SUV model will be released in the first half of the year to serve more household users.
In Li Xiang's opinion, regarding pure electric models, the Ideal MEGA has proven the strength of Ideal Automobile in the 800V high-voltage pure electric three electric aspects, including the efficiency of the high-voltage platform and the complete charging experience and ability, combined with the leading advantages of intelligent driving and intelligent cabin, Ideal Automobile's competitiveness in pure electric racing props.
We still have great confidence in the competitiveness of pure electric SUVs, and we hope to enter the first tier of high-end pure electric products in about two years
Building a car is like running a marathon. Obviously, the ideal car is not satisfied with a temporary lead. Extending the timeline, in the first half of the competition for intelligent electric vehicles, relying on excellent product definition capabilities and keen user insights, Ideal Automobile has taken the lead in running out of new force car companies and entered the profitable stage; In the second half of the competition, with long-term investment in research and development, charging networks, and stable development on a large scale, the winning chance of Ideal Automobile is constantly increasing, and the "snowball effect" is constantly emerging. I believe that in mid to late October, Ideal will achieve the milestone of delivering a total of 1 million, becoming the first Chinese new force brand to reach the million mark.