Ideal Automobile took 8 years to achieve a revenue of 100 billion yuan and a profit of 10 billion yuan.
According to a reporter from China Business Daily, the financial report released by Ideal Automobile recently showed that in 2023, Ideal Automobile achieved a revenue of 123.85 billion yuan, a year-on-year increase of 173.5%, becoming the first new car making enterprise in China to exceed 100 billion yuan in annual revenue.
The financial report shows that the annual delivery volume of Ideal Automobile was 376030 units, an increase of 182.2% year-on-year. The net profit for the whole year was 11.81 billion yuan, turning from a net loss of 2.03 billion yuan in 2022 to a profit. As a result, Ideal Automobile became the first new automotive power enterprise in China to achieve annual profitability. From a global perspective, Ideal Automobile is the third new energy vehicle company in the world to achieve annual profitability, following Tesla and BYD.
Due to the steady development of revenue and sales, Ideal Automobile's performance outlook for the first quarter of 2024 has reached a new high for the same period, with an expected delivery volume of 100000 to 103000 vehicles, a year-on-year increase of 90.2% to 95.9%; The revenue reached 31.25 billion yuan to 32.19 billion yuan, a year-on-year increase of 66.3% to 71.3%.
The first company to pass the annual delivery milestone of 300000 vehicles
Thanks to the expansion of scale and continuous improvement of operational efficiency, Ideal Automobile achieved its best financial performance in history during the reporting period.
Throughout 2023, Ideal Automobile exceeded the target set at the beginning of the year with a delivery volume of 376000 vehicles, becoming the sales champion of new energy vehicles priced above 300000 yuan in the Chinese market. It was also the first Chinese new energy vehicle company to pass the annual delivery milestone of 300000 vehicles. In the fourth quarter, the market share of new energy products worth over 200000 yuan for Ideal Automobile reached 16%, ranking first among Chinese automotive brands.
The stable increase in sales has also brought growth to the revenue of Ideal Automobile. The financial report shows that in 2023, Ideal Automobile's automotive business revenue was 120.29 billion yuan, a year-on-year increase of 172.7%, accounting for 97% of the total revenue. Driven by the automotive business, Ideal Automobile has revealed that the increase in model delivery has also driven an increase in sales of charging stations, as well as an increase in sales of accessories and services provided. In 2023, Ideal Automobile's other revenue was 3.56 billion yuan, a year-on-year increase of 201.3%.
It is worth noting that the gross profit margin of Ideal Automobile is also continuously increasing. The data shows that the gross profit margins for the four quarters of 2023 were 20.4%, 21.8%, 22.0%, and 23.5%, respectively. The annual gross profit margin reached 22.2%, higher than the 19.4% in 2022.
In the research and development field, the expenses of Ideal Automobile in the fourth quarter of 2023 were 3.49 billion yuan, a year-on-year increase of 68.6%; The annual cost was 10.59 billion yuan, a year-on-year increase of 56.1%. Ideal Automobile stated, "We will firmly invest in long-term research and development, and adhere to self research of core technologies in the dual energy field."
Meanwhile, as of the end of 2023, the company's cash reserves amounted to 103.67 billion yuan. "The abundant funds on hand and continuously improving self generating ability will support Ideal Automobile to continuously expand its research and development investment, expand its business scale, and achieve its vision goal of becoming a leading global artificial intelligence enterprise by 2030." Ideal Automobile stated.
"Not considering launching models below 200000 yuan within 5 years"
At the beginning of 2024, Tesla took the lead in lowering prices by lowering the prices of the Model 3, Model Y rear wheel drive, and long range versions. Subsequently, multiple brands followed suit, and Ideal Automobile also participated in this rare event. On January 11th, Ideal officially announced the adjustment of prices and models, upgrading the configuration of the 2024 model and lowering the prices of all 2023 models. According to different vehicle versions, the price reduction range is between 33000 to 36000 yuan.
In fact, the automotive industry is currently in a period of sluggish market demand and ongoing price wars. Some industry insiders also believe that the current is a turning point in the industry. Regarding this, Li Xiang, Chairman and CEO of Ideal Automobile, said, "Firstly, we adhere to our consistent view that the competition for smart electric vehicles will form a top concentration pattern. I predict that the new energy vehicle market with a price of over 200000 yuan will show a result of the top three brands eating 70% of the market share in the fourth quarter of this year. This is our judgment on the overall market share trend, which can be verified in the fourth quarter of this year."
Based on industry judgment, Ideal Automobile has decided to focus on products worth over 200000 yuan. Li Xiang said, "Currently, the entire product plan of the company does not have models priced below 200000 yuan in the next 5 years. Based on our long-term judgment, by 2030, if we only have a household user market priced above 200000 yuan, we only need to gain one-third of the market share in the Chinese market, which can be a revenue of over one trillion yuan.". If we can still have a good performance overseas, by 2030, we can approach the global revenue of iPhones in the household user market of over 200000 yuan alone. I think this is a huge market, and today we occupy a very small part of this market. There is no need to divert our energy to look elsewhere. We should make the household market of over 200000 yuan more deeply rooted in people's hearts worldwide, "Obtaining more and more market share, I think this is our most important choice."
It is worth noting that with the continuous iteration and launch of competitors, in the current fiercely competitive market, Ideal Automobile still adheres to the sales target previously proposed. Zou Liangjun, Vice President of Sales and Service at Ideal Automobile, said, "We will still have monthly sales exceeding 100000 units by the end of this year. Starting from March 2024, we will deliver Ideal MEGA, as well as 2024 models of Ideal L9, Ideal L8, and Ideal L7. The company will enter a new product cycle."
"With the launch and delivery of more competitive new products, we expect the company's delivery volume to exceed 50000 vehicles in March 2024 and 70000 vehicles in June. When we reach the milestone of 70000 vehicles in June, the market will understand all of the company's assumptions," he said.
It is understood that in the face of the "internal competition" in the automotive market, this year Ideal Automobile will face the challenge with a "product year". At the same time as MEGA enters the MPV track, the L series will rejuvenate its defenses. In addition, the Ideal Automobile L6 is also expected to be launched this year, which means that Ideal Automobile will begin to compete for a market share of 200000 yuan. By the end of the year, Ideal Automobile will form a product matrix consisting of 4 extended range and 4 pure electric models, totaling 8 models, and based on this, achieve the goal of annual sales of 800000 units and becoming the top selling luxury brand in the Chinese market.
So, how does Ideal Auto plan to use pricing methods to balance quantity and price this year? Regarding this, Li Tie, co-founder and CFO of Ideal Automobile, said, "In fact, when setting our annual goals, we have taken into account factors such as market competition and the pace of new product launches. Therefore, as usual, we still need to ensure a relatively healthy gross profit margin level of over 20%, approximately between 20% and 25%, but each quarter may vary slightly depending on market conditions.". Just like in the fourth quarter of 2023, everyone was worried about the potential competitive pressure brought by some promotional activities; But in fact, there will be pressure from different aspects every quarter, such as supply chain, raw material prices, etc. Despite some promotional activities, the gross profit margin has still increased