In a different way of playing, can Li Auto still win?
Author |Liu Liang.
Edit |Fun about business.
On the evening of February 26, Li Auto (2015HK) announced its financial results for the fourth quarter of 2023 and the full year of 2023.
In the fourth quarter of 2023, Li Auto's revenue was 417300 million yuan, a year-on-year increase of 1364%；In 2023, the annual revenue will be 1238500 million yuan, a year-on-year growth rate of 1735%。Since then, Li Auto has officially become the first car company among China's "new forces" to exceed 100 billion yuan in annual revenue.
Screenshot of Li Auto's financial report.
However, with the sales of Wenjie Auto surpassing Ideal in January 2024, and at the same time, various car companies have begun to cut prices at the beginning of the year, coupled with the launch of other pure electric models such as Ideal MEGA, the overall cost and marketing expenses of Li Auto are expected to rise this year.
So, in the new year, under the new challenges and new ways of playing, will the ideal still be "fragrant"?
A few days ago, Li Xiang, the founder of Li Auto, posted a Weibo to review what he did not do well in 2023, and he said three points: first, sales are not good, "37Of the 60,000 units sold, 400,000 were sold to second-hand car dealers"; second, NOA collapsed, "only pushed to Li Xiang alone"; Third, it can't be like some brands of cars, 180 mph rear-end a large truck and the driver is unscathed.
Screenshot of Weibo.
Netizens saw that this seemingly self-examination was actually yin and yang weird rhetoric immediately aroused discussion, and many netizens commented that this Weibo seemed to be "yin and yang Huawei"; So netizens jokingly said, "I can't beat Huawei, I broke the defense." ”
Screenshot of Weibo.
At the beginning of February, Wenjie Auto and Li Auto respectively announced their sales results for the first month of 2024.
In January 2024, the whole system of Wenjie will be delivered 3300,000 units, up 35% month-on-month; In contrast, Ideal's sales in January fell by 6% month-on-month to 3120,000 vehicles, 1,800 vehicles behind the boundary.
Although this gap does not seem to be very large, you must know that this is already a performance completed under the condition that the price of the whole series of the ideal first year is more than 30,000 yuan, and the annual sales target of the ideal car in 2024 is 800,000 units, so the results of the early 30,000 units in January seem to be unsatisfactory.
Sun Shaojun, the founder of "car fans", said on Weibo that the reason why sales in January are important is because according to the production capacity planning of various car manufacturers, winning the sales championship in January basically means that the first quarter of 2024 will be "asked to be round".
Screenshot of Weibo.
With the recent release of a large number of new cars, it is also foreseeable that the new energy vehicle market will usher in a greater battle in March.
In fact, the competition between ideals and questions has already begun.
Last year, Li Xiang once said on Weibo".In the third quarter of 2022, the release of the M7 and ** directly crippled the ideal one, we have never encountered such a strong opponent, and we have no power to fight back for a long time. He said that Huawei's super ability directly caused the sales of Ideal One to collapse and stop production ahead of schedule, and it lost more than one billion yuan in one quarter. Li Xiang also said that at the Yanqi Lake Strategy Meeting at the end of September 2022, an important consensus was reached to comprehensively learn from Huawei and the most advanced enterprises.
Regardless of whether Li Xiang is really learning or fake modesty, there is no "softness" in the world. In December 2023, an Ideal L7 was involved in a serious traffic accident in Qingyuan City, Guangdong Province, rear-ending a large truck on a highway, resulting in the death of the driver and one passenger of the car, and the injury of another passenger. As a result, at the press conference of the M9 on December 26, Yu Chengdong specially demonstrated the crash test of the M9 being squeezed by a large truck**, saying that the A-pillar, B-pillar, C-pillar, and D-pillar were not deformed. It can be said that the "smell of gunpowder" is flying all over the sky.
Screenshot of Weibo.
The main force behind the sales of the world this time is the improved version of the M7. According to the official statement of the world, **M7 has invested a total of 500 million yuan for major renovations, which are used for the body, chassis and performance, as well as space design and layout, as well as intelligent driving and intelligent cockpit. With the addition of lidar, cameras, lower vehicle height, new brown steering wheel, and other updates, the price of the new car has been reduced from 260,000 yuan to 24Minimum sale is 980,000 yuan. In contrast, the ideal L7 with a similar model, its price of more than 300,000 yuan makes many consumers call "I want to sell the ideal world".
Ideal naturally felt the impact from the new question world M7. Previously, it was reported that some stores of Ideal Auto have launched a policy, as long as the deposit of the new M7 is paid, the deposit can be reimbursed for the purchase of Ideal Auto with a screenshot of the deposit, so that customers do not have any loss; In addition, the rights and interests given to other car owners are also fully enjoyed by the modified car owners.
However, the question industry soon launched a coping strategy; Specifically, if the vehicle is delayed, the user will be given a subsidy of 200 yuan a day, up to 10,000 yuan. Wenjie also gave an additional condition: new M7 users who have completed the Dading payment before November 30, 2023 (inclusive) can enjoy this plan; Users can receive a cash subsidy for car pick-up according to the number of days exceeded (the date the vehicle has arrived at the store - the date the delivery plan has been confirmed - the waiting period).
Screenshot of Weibo.
Backed by Huawei, not only does it have its own traffic, but also the tonality of Huawei's own brand, which will attract some users of commercial vehicles. Several sets of consecutive confrontations ended with a temporary lead in sales in January.
However, the ideal can actually have further price reduction actions, judging from the financial data of the fourth quarter of 2023, the ideal gross profit margin is 227%, but from the perspective of the average annual selling price, the average selling price of Li Auto in 2023 will be 320,000 yuan, compared with 3310,000 yuan has been reduced, which is already the impact of L7's price reduction activities. Moreover, frequent price reductions will also affect the brand image of Ideal wants to continue to go high-end models; Therefore, the "double-edged sword" of price reduction has to be used leisurely.
On February 26, Li Auto announced its financial data for the fourth quarter and full year of 2023, and also revealed its key strategies for the whole year at the ** meeting.
In terms of gross profit margin, Li Auto is still "far ahead". In the fourth quarter of 2023, the gross profit margin of Li Auto's business still exceeded the level of 20%; In contrast, the gross profit margins of NIO and Xpeng Motors, both of which are also the "Big Three of New Forces", are 11% and -6 respectively in the third quarter of 20231%。
Screenshot of Li Auto's financial report.
* At the meeting, Zou Liangjun, vice president of sales and service of Li Auto, also revealedTotal deliveries are expected to be in the range of 10-10 in the first quarter of 202430,000 units; Based on this calculation, the delivery volume in March is expected to exceed 50,000 units. At the same time, Zou Liangjun also said"Deliveries in June will reach 70,000 units" and "monthly sales will exceed 100,000 units by the end of this year."
Positively affected by the earnings announcement, Ideal's share price soared. As of February 27**, Li Auto's Hong Kong stock price closed at 1755 Hong Kong dollars shares, up 2545%, with a total market capitalization of HK$372.4 billion.
Screenshot of Oriental Fortune.
Both from the gross profit margin or the full year 37Judging from the delivery volume of 60,000 vehicles, the ideal performance is quite good;However, digging deeper into the data, it can be seen that the impact of the ideal replacement period hidden under the "absolute value" is far-reaching
In the third quarter of 2022, Ideal ONE officially stopped production, and Ideal entered a replacement period. Judging from the delivery data, except for the quarter, the delivery data fell slightly to 2650,000 units, and the subsequent delivery figures have soared;By the fourth quarter of 2023, the number of deliveries in a single quarter has reached 130,000 units.
Canned Gallery.
As can be seen from the trend of gross profit margin, the ideal gross profit margin in the third quarter of 2022 is the lowest value in two years, at 12%;After that, with the increase in deliveries, the gross profit margin increased, but it can be found that in the first quarter of 2022, although the delivery volume was only about 30,000 units, the gross profit margin was 224% and a gross margin of 22 under 130,000 deliveries todayThe 7% level is not much different. This seems to be illustrated sidewaysWith the increase of ideal models, the increase in gross profit margin brought by its large-scale mass production is limited and is gradually decreasing
Data**: Li Auto's financial report.
This problem may recur after March, because after March, Li Auto will enter the car replacement period again. MEGA, L7, L8, and L9 are all expected to be launched or delivered in batches in March, and the Ideal L6 pure electric SUV is also expected to be launched in the second quarter, and Ideal is expected to launch 8 models in 2024, including 4 pure electric and 4 extended range.
In view of the ramp-up period of new car production capacity, Ideal also gave its own strategy at the financial report meeting, the manufacturing end of "new car listing is on the rise" has completed the capacity planning in advance, and the Beijing green intelligent factory has been completed and put into operation, which is used to produce MEGA and subsequent pure electric new models.
From the "Matryoshka Universe" to the "Car Sea Tactics", with the increase in the complexity and diversity of models, it is a question worth paying attention to whether the ideal can still maintain a gross profit margin of more than 20%.
Canned Gallery.
On the other hand, as a member of the "new forces" who have not moved to go overseas for a long time, Ideal will also take going overseas as one of the business priorities in 2025.
**At the meeting, Li Auto said that overseas markets are important, and Li Auto will continue to work on the direct sales model in overseas markets, focusing on building a strong sales network and comprehensive after-sales service infrastructure. Ideal has successfully established a presence in the Middle East and is hiring a local sales and service team in Dubai. In the first half of 2024, Ideal plans to establish dedicated after-sales service work in Central Asia and the Middle East, and by the fourth quarter of 2024, Ideal will start overseas deliveries, starting with the introduction of L7 and L9 models locally.
Screenshot of Weibo.
However, the "going global" strategy naturally raises another problem - the increase in marketing expenses.
Li Xiang has always been proud of Li Auto's very low marketing expenses, and for the whole year of 2023, Li Auto's marketing expenses will be 976.8 billion yuan, accounting for 1238 percent of total revenue500 million yuan of 79%；Compared to 2022, marketing expenses accounted for 12 percent of total revenue5%, with a certain level of improvement. However, the layout and marketing costs of overseas directly operated stores will directly increase marketing expenses, so this may be a problem to face in the future.
Whether it is the impact of gross profit margin caused by complex models, or the impact of marketing expenses brought about by overseas layout, in 2024, Li Auto will not only have to consider selling cars, but also how to sell cars and make money.
Li Xiang has always been the best at "storytelling" among car sellers; For the upcoming mega, Li Xiang also told a good story.
We started to make the ideal one in 2016, and at that time we also tried to make a pure electric version, and in 2021, another 5 years have passed, and we have made a pure electric car, if this car does not lead, we can't convince ourselves. Users are attracted by the design of the car, which is the meaning of the existence of car designers, otherwise only need to build a box and four wheels. This is a yearning of the designer's underlying heart. In particular, we wanted to make it a spirit car like the Porsche 911, on the ideal platform. This is the description of the MEGA design concept on the official *** of Li Auto.
Screenshot of Weibo.
In 2024, Ideal will finally make a pure electric car, and it will choose an MPV as soon as it comes up.
The difficulty of an all-electric MPV is obvious; The body is too long, the driving feeling is not good, and the pure electric MPV has added a difficulty in endurance and energy replenishment to the difficulty of its own design.
So why did Ideal choose a pure electric MPV as the first work of a pure electric model?
Although the MPV market is "niche", judging from the sales data released by the Passenger Association in 2023In fact, the overall sales volume of the MPV market increased by 15% year-on-year9%, and retail sales reached 10930,000 units, which is a considerable growth rate。The main thing is,At present, the A00 market, sedan and SUV markets have representative hybrid or pure electric products, but the MPV market is still dominated by the classic fuel MVP of Buick GL8；In 2023, the GL8 will sell 118906 units at retail and has dominated the MPV sales list for more than 20 consecutive years.
Canned Gallery.
The vacancy of the MPV market hegemon is an obvious opportunity. First, if the ideal MEGA can succeed, it will be able to gradually swallow the original GL8 market; Second, once the "preconceived" benchmark effect can be played, then the improvements and upgrades made by Ideal on MEGA in the future, as well as the release of MVP models in the future, will be guaranteed in terms of sales; It is equivalent to a "matryoshka universe" that can be built around the pure electric MPV, which is the ideal and best.
However, it is not only Ideal that wants to grab the "top brand" of pure electric MPV, among them, Denza has already done quite well.
In 2023, the sales volume of the Denza D9 DM-i will already exceed 100,000 units, and the "menacing" Denza is backed by BYD, which can be regarded as having its own traffic and brand halo; At the same time, BYD's transformation as a traditional car company, the layout of the vehicle industry chain also gives DENZA a unique cost advantage, so the price of some models of the DENZA series can be pressed to less than 300,000 yuan.
Screenshot of Xiaohongshu.
On the other hand, the current price of Ideal Mega is about 600,000 yuan; Although the MEGA is different from the MPVs on the market in terms of appearance design and configuration, it is judging from the showdown between the new M7 and the ideal L7Consumers still seem to put the "** comparison element in the first place, after all, cost-effective is the "real fragrance".
According to the "2022 China Household MPV Market Insight Report" released by iResearch, the proportion of consumers who buy MPVs for the first time is 499%；Among them,68.4% of consumers buy MPVs** between 150,000 yuan and 300,000 yuan, consumers who buy more than 400,000 yuan account for only 39%。
iResearch.
On the other hand, as a luxury car of more than 500,000 yuan, MEGA's supporting services must also keep up; At the same time, as an MPV, how to keep up with the energy replenishment service is also one of the determining factors for how well the car sells.
In this regard, Li Auto said at the ** meetingBy the end of 2024, 2,000 charging piles and 700 highway superchargers will be builtto cover 70% of China's expressways and 90% of the expressways in the four major economic zones; "The company has sufficient cash reserves and has allocated sufficient capital for the construction of charging stations", and "the company has a detailed evaluation of the operating model for each charging station".
What is the level of 2000 charging piles? In comparison, as of February 27, data from the official website of NIO shows that it has 3,713 charging stations and 2,375 battery swap stations. Therefore, in terms of quantity, there are not many ideal energy replenishment devices.
Screenshot of NIO's official website.
Although the number of charging piles has not yet caught up, the ideal has tried its best to catch up in the charging speed; According to the latest report, the Ideal MEGA can be charged for 500km in 12 minutes using the Ideal 5C supercharging pile.
At present, Li Auto has seized the demand for family travel after the epidemic, and used extended-range vehicles to alleviate the range and range anxiety of new energy vehicle owners, and achieved today's results. ButAfter entering 2024, how can the ideal car that has been involved in the pure electric track from MVP continue to make money? There's a lot more to the story.
Ideal car