** Bohufn
Author |Stroll through Hengtian.
Objectively and fairly, the new energy vehicle market in 2023, under the influence of factors such as the economic downturn cycle and the recovery of consumption is less than expected, major brands have been affected to varying degrees, and they are also seeking a broader "way out".
However, one company bucked the trend, and while announcing gratifying results recently, it also harvested a large wave of traffic, so that at the market level, words such as "bursting", "winning hemp", and "killing crazy" have labeled its high-growth performance.
This car company is a new car-making brand-Li Auto.
On February 26, Li Auto released its financial report for the fourth quarter and full year of 2023, which showed that its annual revenue was 12385.1 billion yuan, a year-on-year increase of 17348%；Net profit 1180.9 billion yuan, compared with a net loss of 20 billion yuan in 2022300 million yuan, not only to achieve a turnaround, but also according to the profit value of more than 10 billion, it can be said that "one go" to offset the cumulative losses in the previous five years, and Li Auto has also successfully become the first new car-making force to achieve profitability.
After the disclosure of this 100 billion revenue financial report, which has both scale and efficiency and is full of color, the most direct effect is to drive the stock price of Li Auto to soar, and its U.S. stock rose by more than 18%; Hong Kong stocks surged 25%. Overnight, the value of Li Auto's beauty rose to 438US$6.2 billion, with a Hong Kong ** value of over HK$370 billion.
In contrast, the current market value of Li Auto not only far exceeds that of Xpeng and Weilai, which are new car-making forces on the same track, but also surpasses well-known domestic companies such as Ctrip and JD.com.
Going back to the past 2023, if you want to use a word to describe the strategic play of new energy vehicle companies at that time, it is not an exaggeration to "bloody war". On the one hand, peers have rolled up and configured, constantly selling new cars and replacing them, and the habit of "three years of facelift and five years of replacement" of fuel vehicles in the past has been rewritten; On the other hand, because Tesla and BYD, the top two in the industry, have picked up the first stick, the players behind have to officially announce the price reduction policy, "price for volume".
In December last year, its monthly deliveries reached 50,000 units for the first time, and the annual delivery volume reached 3760,000 units, a year-on-year surge of 1822%, and the annual sales target completion rate reached 1253%。
Behind the fact that it can turn a profit in one year and the delivery volume far exceeds the target completion rate, what did Li Auto do right?
Li Xiang once shared on Weibo, "Poor marketing is the biggest harm to the R&D team." Poor performance is the biggest harm to the R&D team and marketing team. All three are poor, which is the biggest harm to employees from the management team. R&D, marketing, and the best represent the creation of value, the communication of value, and the delivery of value, and the three are a community of destiny and a community of destiny to win users. ”
First of all, the most direct reason is the positive feedback result brought by Li Auto's continuous efforts in the product side and marketing side at the same time in the early stage.
Li Auto's success is first of all due to Li Xiang's accurate judgment of products and markets. More than 200,000, extended range, refrigerator color TV sofa, Li Xiang keenly grasped the domestic group of people who have both consumption power and decision-making power, and through the strategy of large single products, with standard configuration and other ways to reduce the customer's decision-making process.
Of course, there are countless counter-examples in the industry, such as Gaohe Automobile, which has been on the cusp of the storm recently, is positioned in the high-end market like Li Auto, and has also developed three main models: Hiphi X, Z and Y. However, the products it developed are seriously detached from users, have not established core competitiveness, and are difficult to support excessively high market pricing, which is why the public's negative impression of it is "one-sided" after the news of the shutdown was exposed.
In addition to the advantages at the product level, Li Auto's good sales also depend on marketing and channels. For example, in the direction of marketing channel expansion, in the fourth quarter of 2023 alone, Li Auto will open more than one new store a day, adding 106 retail centers, building China's largest automobile direct sales system, and the scale effect is also being consolidated and strengthened step by step. As of January 31, 2024, Li Auto has 474 retail centers across the country, covering 142 cities.
Secondly, it is mainly due to the careful control of Li Auto's expenses and the open source and cost reduction.
As a "picker", Li Auto was once considered by many to be entirely dependent on the province in its early profits. Li Auto attaches great importance to the control of expenses in 2023, which we can also get a glimpse of in its latest financial report.
Taking the sales and management expenses that account for the "majority" of the cost as an example, the expense ratio of Li Auto under this indicator in 2023 will be 79%, compared to 125% down 46 percentage points. Similarly, its R&D expense ratio also decreased by 6% year-on-year5 percentage points to 85%, which is still very good at controlling costs.
Under the open source and cost reduction, Li Auto's gross profit margin has increased significantly, and the gross profit margin level has increased from 194% to 22. by the end of 20232%, and the gross profit margin of vehicles also increased from 19 in the same period1% to 215%。In other words, if the final transaction price of 350,000 yuan is calculated based on the final transaction price of Li Auto, it is equivalent to a gross profit of 7 for every car sold50,000 yuan.
Such excellent profitability is not inferior to Tesla and BYD, which are known for their cost control capabilities in the same track. You know, Tesla's gross profit margin in 2023 will only be 182%；BYD's gross profit margin in the third quarter of the same year was 1979%。
According to the financial report data, as of the end of 2023, Li Auto's cash reserves reached 1036700 million yuan, a year-on-year increase of 7737%。
Finally, in terms of organizational structure adjustment, Li Auto has taken the initiative to seek organizational structure reform, which has also provided energy storage and support for today's high-growth performance.
For example, in terms of R&D, Li Auto integrates the IPD product R&D system learned from Huawei into its R&D teamOn the market side, at the beginning of last year, Li Auto also recruited more than 10 "* hands" of Huawei terminal BG to form a GTM (Go to Market) in the commercial department to deal with market competition.
As Li Xiang, founder, chairman and CEO of Li Auto, has publicly stated that it is necessary to learn from Huawei and accelerate the upgrade to a matrix organization to solve problems encountered in product research and development, sales and service, manufacturing, and organizational finance.
Although Li Auto has performed exceptionally well in 2023, it is far from the moment of peace and relaxation. The first thing on the table is that the competitive situation of "there is a blockade in front and a chasing soldier in the back" has not been eliminated, and according to the development trend of the new energy vehicle market this year, the ideal car is particularly dangerous in the face of pressure from competing products.
At this performance meeting, Li Xiang publicly stated that the company's entire product plan, looking at the next 5 years, is not a model below 200,000 yuan. In other words, the high-end models currently on sale are more than 300,000, which will also be the focus of Ideal's continued efforts in the future.
However, with the further intensification of competition in the new energy vehicle market this year, in addition to the strong Tesla and BYD as "roadblocks" in the high-end market price, the strong rise of Huawei has also brought growth pressure to Li Auto.
Time back to June last year, in the face of Huawei's rising sales, Li Xiang directly expressed his concern on Weibo, "In the third quarter of 2022, the release of M7 and **, directly disabled the ideal one, we have never encountered such a strong opponent, and we have no power to fight back for a long time." ”
Just after the release of Weibo, it has continued to the present, and many of Li Auto's products are difficult to resist strong competitors, and their sales have been surpassed many times. The sales volume of the new Huawei Wenjie M7 exceeded 10,000 in the second month after its launch, surpassing the ideal L8 in November last year and the ideal L7 in December. In January this year, Huawei Wenjie M7 won nearly 3Sales of 30,000 units increased by 3476%, winning the monthly sales championship of new domestic car brands in one fell swoop.
According to Li Auto**, the delivery target for 2024 is 800,000 volumes, which means that its established KPIs will be doubled this year compared to last year's target. In the face of Huawei's strong siege, it is not a small pressure to successfully complete the goal this year.
Of course, in addition to the pressure from external competition, Li Auto also needs to cultivate internal skills and face many problems.
The first is the pressure from the market. On March 4, in just 24 hours, 9 industry leaders coincidentally joined this battle. Xpeng did the g6 to 18990,000, BYD directly lifted the table, and the competition in the market of more than 200,000 will definitely be more intense.
Secondly, the development of pure electric vehicles also means that it is necessary to cross the hurdle of building a strong energy supplement system as a backing.
Although Li Auto is currently accelerating the layout of 5C super charging stations, and the energy replenishment speed is very fast, it still needs a series of evaluations and a lot of investment in infrastructure construction such as the number and density of outlets.
At the meeting, Li Auto also said that it plans to build 2,000 charging piles and 700 highway super charging stations by the end of this year to cover 70% of China's highways and 90% of the highways in the four major economic zones. Therefore, it is not difficult to foresee that it is really a big challenge for Li Auto to really build such a large-scale energy supplement base station in the country.
In addition, with the continuous iterative upgrading of AI technology, the competition in the smart car market is still focused on the research and development of intelligent driving.
Xpeng has announced on March 1 that it can be opened nationwide, and Wenjie also pushed a new OTA upgrade on March 1.
In this direction, Li Auto is indeed investing heavily, but there is still a gap compared with its excellent peers.
For example, Ma Donghui, president and chief engineer of Li Auto, said at the meeting, "By the second quarter of this year, the city pilot NOA will be opened across the country, and the scope of use is no longer limited by the number of cities."
The gratifying financial report in 2023 has become a thing of the past, and the horn of this year's new energy vehicle market competition has been fully sounded. Whether Li Auto can make full use of its strengths and avoid its weaknesses and inspire more hidden strengths to overcome difficult challenges is worth looking forward to.
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