Against the backdrop of intensified competition in the automotive market and intensifying price wars, on May 20th, Ideal Automobile delivered a good first quarter financial report (unaudited financial performance), maintaining healthy and stable performance with strong growth in delivery volume.
Ideal Automobile achieved a record high revenue in the first quarter, reaching 25.6 billion yuan, a year-on-year increase of 36.4%, leading BYD and Tesla; The adjusted net profit for the first quarter was 1.3 billion yuan (excluding equity incentive expenses), and the gross profit margin remained above 20%.
Li Xiang, CEO of Ideal Automobile, said at the performance meeting, "Although Ideal Automobile's revenue maintained a high-speed growth in the first quarter of this year, it did not meet the company's internal expectations. In the face of problems, we actively and quickly made adjustments, fully launched and implemented organizational upgrades and process optimization."
Revenue increased by 36.4% year-on-year, leading the growth rate
After experiencing the "MEGA listing controversy", Ideal Automobile still performs well. In the first quarter of this year, Ideal Automobile delivered a total of 80400 vehicles, a year-on-year increase of 52.9%. During the same period, Tesla's sales decreased by 8.5% year-on-year, while BYD's sales increased by 13.44% year-on-year. In comparison, Ideal Automobile led the growth rate and won the championship of new energy vehicle sales above 300000 yuan in China for 18 consecutive months.
Data shows that China's new energy vehicle market with a value of over 200000 yuan increased by 24.8% year-on-year, and the growth rate of Ideal Automobile is much higher than that of the market.
Sales have driven steady growth in performance. In the first quarter of this year, Ideal Automobile achieved a revenue of 25.6 billion yuan, a year-on-year increase of 36.4%, achieving the best performance in history for the same period. In the first quarter of 2021, the first quarter of 2022, and the first quarter of 2023, its revenue was 3.58 billion yuan, 9.56 billion yuan, and 18.79 billion yuan, respectively.
However, the revenue growth rate of Ideal Automobile in the first quarter has slowed down compared to the same period in previous years. Without exception, under the influence of fierce market competition, BYD and Tesla, two new energy giants, both experienced a slowdown in revenue growth in the first quarter of this year. Among them, BYD's revenue growth in the first quarter returned to single digits, with a year-on-year increase of 3.97%; Tesla, on the other hand, saw a year-on-year decrease of 9%.
From the revenue growth rate of the three leading new energy vehicle companies, it can be seen that the "price war" in the automotive market has had a certain degree of impact on corporate performance. Although Ideal Automobile leads BYD and Tesla in revenue growth, it has not yet met its established expectations.
In the first quarter, Ideal Automobile's adjusted net profit was 1.3 billion yuan (excluding equity incentive expenses), and it has been profitable for six consecutive quarters since the fourth quarter of 2022. As the only profitable new force car company in China, NIO and Xiaopeng, who were previously in the first tier of new forces, have not yet escaped losses.
It is worth mentioning that in the first quarter of this year, Ideal Automobile experienced a switch between new and old L-series products, as well as a "storm" after the launch of its first pure electric product MEGA. However, it still maintained a healthy gross profit margin of 20%, and with a cash reserve of up to 98.9 billion yuan at the end of the first quarter, it provided solid support for continuous investment in research and development, manufacturing, and charging networks.
Taking R&D expenses as an example, Ideal Automobile invested 3 billion yuan in the first quarter, a year-on-year increase of 64.6%, reaching more than twice its adjusted net profit, and maintaining a high R&D investment.
L-series order volume continues to grow
Delaying the launch of pure electric SUVs
In the first quarter of this year, the sales of Ideal Automobile were questioned and surpassed. After entering the second quarter, with the launch and delivery of Ideal L6, the first model of Ideal Automobile priced under 300000 yuan, in April, Ideal Automobile delivered 25787 vehicles, surpassing Wenjie's 25086 vehicles, regaining the sales crown of new forces.
According to official data from Ideal Automobile, the first sales period (April 18-May 5) of Ideal L6 ordered over 41000 units, quickly becoming a popular product in the price range of 200000 to 300000 yuan due to its outstanding market performance.
As an ideal car product for the mainstream market, the Ideal L6 is highly anticipated. Li Xiang stated at the performance meeting that the Ideal L6 has been widely recognized, and under the new pricing strategy, the Ideal L9, L8, and L7 have also shown sustained positive performance. "Overall, we are very optimistic about the upcoming monthly sales performance. After the price strategy adjustment, the order volume for L7, L8, and L9 continues to increase, and the company has no plans to lower prices in the future."
In addition, Li Xiang responded at the performance meeting, "Ideal is unlikely to have a lower version than L6." In the long run, pure electric products will not establish a new brand.
According to a research report by Ping An Securities, the Ideal L7, L8, and L9 models have gained leading market positions in different price ranges due to their strong product strength. The all-new L6 model covers a larger market demand of less than 300000 yuan, and after going public, orders are booming. The price range covered by the L series products is further expanded, and the basic structure of its extended range series will be more reliable.
Ideal cars always maintain their sensitive and fast combat characteristics. Li Xiang revealed at the performance meeting that Ideal Automobile will not release pure electric SUV products this year and will postpone the release to the first half of next year.
Li Xiang also stated that selling mid to high end pure electricity at the current stage is a necessary condition for self operated supercharging piles. The appropriate time to launch the product to the market is for self operated supercharged piles to reach a quantity similar to Tesla in China. In addition, Ideal needs to upgrade and add more store booths to support more vehicle sales.
Since the beginning of this year, the "price war" in the car market has intensified, and the growth rate of car sales has slowed down. Data shows that in the first quarter of this year, the sales of passenger car markets with over 300000 yuan decreased by 12% year-on-year. In response to this, Ideal Automobile adjusts in a timely manner according to the external environment and responds very quickly.
In terms of business rhythm, a new pricing system was released on April 22nd, with a price reduction of 18000-2000 yuan for the L series and 30000 yuan for MEGA. At the same time, the focus of the Ideal sales team has returned to the Ideal L series, adopting different sales strategies for range extenders and high-voltage pure electric vehicles. Ideal MEGA operates from 0 to 1, prioritizing its layout in 17 cities with strong high-end pure electric consumption capabilities. Accelerated the layout of the charging network and readjusted the charging network layout strategy, shifting from prioritizing high-speed overcharging stations to emphasizing both urban and high-speed areas.
In addition, the company has undergone organizational upgrades and launched a new round of matrix organizational upgrades in April, marking the widest and most intense adjustment since the end of 2022.
During this year's Beijing Auto Show, Liu Jie, President of Ideal Automotive Product Line, said in an interview, "Although prices have been adjusted, the price range targeted by different products still needs to be clear to consumers. For example, L6 mainly focuses on the price range below 300000 yuan, L7 and L8 mainly focus on the price range between 300000 and 400000 yuan, L9 still focuses on the price range between 400000 and 500000 yuan, and MEGA still focuses on the price range above 500000 yuan."
Industry insiders say that in recent times, Ideal Automobile has undergone frequent strategic adjustments, mainly returning to focusing on user value and operational efficiency, which is expected to further unleash sales growth. Li Xiang stated that currently improving sales and operational efficiency is still the focus of ideal pursuit.
Looking ahead to the second quarter, the quarterly delivery volume of Ideal Automobile is expected to reach 105000 to 110000 vehicles, a year-on-year increase of 21.3% to 27.1%, and the total revenue is expected to be 29.9 billion to 31.4 billion yuan, a year-on-year increase of 4.2% to 9.4%.
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