The ideal car, which saw strong sales in 2023, had a difficult year ahead. After the expected order volume of the first pure electric model, Ideal MEGA, may lower its annual sales target.
It is reported that Ideal Automobile will change its annual delivery target of 800000 vehicles to 560000 to 640000, a decrease of 160000 to 240000 vehicles. The ideal MEGA sales guide has been lowered to 2000 vehicles per month, and it is expected to gradually increase to 4000 to 5000 vehicles per month. Previously, Ideal Automotive had an expected monthly sales of 8000 units for the first pure electric vehicle.
An insider from Ideal Automotive told Interface News that they have not yet received any notification of the adjustment of annual sales targets. But if adjusted, it will effectively alleviate internal pressure and focus on responding to the product offensive in the industry. There has been no official response from Ideal Automobile.
The day before, Ideal Automobile had announced a reduction in its delivery guidelines for the first quarter. According to the announcement, the expected delivery of vehicles for Ideal Automobile in the first quarter of 2024 has been lowered from 100000 to 103000 units to 76000 to 78000 units, with a reduction rate of approximately 24%.
In January and February of this year, Ideal Automobile delivered 31000 and 20000 units respectively, with a rough estimate of sales of approximately 25000 to 27000 units in March. This means that after completing the replacement of new and old models in the product, the sales of Ideal Automobile in March not only did not reach the expected 50000 units, but also did not return to the delivery level of the low season sales in January.
After the announcement was released, the stock price of Ideal Automobile plummeted. The US stock market plunged more than 7% before the market, marking the largest monthly decline since October 2022, with a closing price of $31.53 per share; As of the time of publication, the Hong Kong stock market has dropped by over 11% to HKD 120.2 per share. Since its peak on March 1st, Ideal Automobile has fallen by more than 30%.
On the same day, Li Xiang, CEO of Ideal Automotive, posted a reflection stating that Ideal MEGA had misjudged its pure electric strategy rhythm and mistakenly operated its commercial validation period from 0 to 1 as a high-speed development period from 1 to 10 internally. At the same time, there is an excessive focus on sales and competition within Ideal Automobile, resulting in a significant decrease in user value and operational efficiency for the most skilled users.
This year, the sales growth of Ideal Automobile is expected to continue to be higher than that of the base Ideal L-series extended range models. During the Beijing Auto Show, Ideal Automobile is expected to release the Ideal L6, a mid size SUV priced between 200000 and 300000 yuan, lowering product prices to a wider user market.
After Ideal MEGA, this year Ideal Automobile will also release three new pure electric products, and will sell eight products simultaneously. This poses a great challenge to the internal resource allocation and sales system construction of Ideal Automobile. One possible guess is that Ideal Automobile may adjust its release plan for pure electric products.
Li Xiang admitted in an internal letter that due to the chaotic pace of the Ideal MEGA, the sales team has significantly reduced the time and energy required to serve L-series users, and the main model, the Ideal L8, has even lost its storefront placement. Next, Ideal Automobile will abandon its comprehensive sales strategy and focus on large-scale retail centers in top cities for product experience and test drives, while accelerating the construction of overcharging stations in these cities.
Due to the limited number of car models available for sale in the past, the store area of Ideal Automobile was relatively narrow, requiring time to renovate or relocate later. This year, Ideal Automobile will build flagship retail centers in popular commercial districts in first tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, and will add 330 direct retail centers to lower tier markets.
This is a considerable investment. From the opening of the first batch of stores in 2019 to the end of 2023, Ideal Automobile has built a total of 467 stores in four years. This year, the number of new stores added by Ideal Automobile will be 70% of the number built in the past four years.
Another expensive investment is in the construction of overcharging stations. By the end of this year, Ideal Automobile will build 2700 overcharging stations (20000 charging stations) nationwide, including 2000 overcharging stations (17000 charging stations) in cities, achieving over 60% urban coverage in first, second, and third tier cities. An industry chain insider revealed to Interface News that the construction cost of a single overcharged pile can reach millions of yuan.
The funds on Ideal Auto's account can support its investment in sales and energy replenishment. In 2023, Ideal Automobile's revenue reached 123.85 billion yuan, becoming the first new car making force in China to break through 100 billion yuan in annual revenue. Last year, the net profit of Ideal Automobile reached 11.81 billion yuan, achieving comprehensive profitability since delivery. As of the end of the year, the company's cash reserves reached 103.67 billion yuan.