Learn from Apple and Huawei： LI’s ＂Superclass＂
"My Weibo is generated and published by Mind GPT. He is good at surfing the Internet and surfing online. I am responsible for being amiable offline. Weibo’s remarks cannot represent me personally. " Recently, Li Xiang, Chairman and CEO of LI, posted on social platforms.
Li Xiang, Chairman and CEO of LI. Photo courtesy of enterprises
The spring breeze is full of horseshoe disease, and running all the way, LI, led by Li Xiang, has been "super-class" all the way. For a long time, LI has been learning from Apple’s products. Li Xiang said in the first quarter earnings conference call in LI in 2022: "I will look at my own ability after ten years, hoping to make it the same level as Apple."
However, under the pressure of M7, Li wants to lead the team to "learn Huawei in an all-round way" in the second half of 2022. LI, led by the "crazy" Li Xiang, is running wildly in sales, far exceeding Weilai Automobile and Xpeng Motors.
At the same time, LI’s pricing is also "beyond the standard", with the product price range from "150,000 yuan to 500,000 yuan" to "200,000 yuan to 500,000 yuan", and the pricing of pure electric vehicles will exceed 500,000 yuan by the end of the year.
LI’s strategy is also rushing, upgrading from a scale of 10 billion to a comprehensive matrix organization with a scale of 100 billion. Release the "dual energy strategy", build more than 300 high-speed charging stations by the end of 2023, and expand its charging station network to 3,000 by 2025. LI is marching towards 500 billion revenue.
Li Xiang, Chairman and CEO of LI. Photo courtesy of enterprises
Sales are running wild.
"LI has delivered more than 20,000 vehicles for three consecutive months. As of June 18, LI has sold 19,800 vehicles this month, and we will hit the higher monthly sales target of more than 30,000!" Before the Dragon Boat Festival, LI was full of confidence in June sales data.
LI relies on intensive product release. In June, 2022, LI released the Ideal L9, ending the history of living on one car for four years. On the eve of the National Day that year, LI released the ideal L8 of Li ONE replacement model.
At the same time, LI’s "three children" ideal L7 was "premature". At the conference of Ideal L8, LI released Ideal L7 "incidentally". Finally, the ideal L7 came out in February this year.
With the joint blessing of Ideal L7, Ideal L8 and Ideal L9, LI’s monthly sales increased. From January to May this year, the sales volume in LI was 15,100, 16,600, 20,800, 25,700 and 28,300 respectively.
At the same time, Weilai Automobile and Xpeng Motors in Weili met with growing pains. From January to May this year, the sales volume of Weilai Automobile was 8500, 12200, 10400, 6700 and 6200 respectively. In the same period, the sales in Xpeng Motors were 5200, 6000, 7000, 9000 and 7500 respectively.
"All the stocks in Li ONE have been sold out, and the limit of weekly production capacity in June is 7,500 vehicles. The core tasks in the third quarter are: L8 and L9 return to the monthly delivery of 10,000 vehicles, and L7 challenges the monthly delivery of 15,000 vehicles. Li ONE’s inventory sales of more than 600 vehicles per week, L8 Air will all be transformed, and it is not difficult to sell more than 10,000 vehicles per month. " LI Chairman and CEO Li Xiang said.
At the same time, in June, the website of the Ministry of Industry and Information Technology showed that LI was officially granted the qualification of Beijing LI Co., Ltd. According to the current capacity planning, there are two production bases associated with this qualification, namely LI Green Smart Factory in Shunyi District of Beijing and Changzhou Intelligent Manufacturing Base in LI, Changzhou City, Jiangsu Province.
At present, Li ONE, Ideal L9, L8 and L7 are all produced by Changzhou Intelligent Manufacturing Base in LI. Beijing Green Smart Factory in Shunyi officially started construction in October, 2021. The factory was transformed by the former Beijing Hyundai No.1 Factory. The whole project investment exceeded 7.5 billion yuan, and it is planned to be officially put into production this year. After commissioning, it will achieve an annual production capacity of 100,000 vehicles.
In pursuit of victory, LI announced in June that the first pure electric vehicle "Ideal MEGA" will be officially released at the end of this year. "I am confident that it will become the first sales volume of all passenger cars with a price of more than 500,000 yuan, regardless of energy form and body form, breaking the traditional cognition that high-end pure electric vehicles cannot become explosives."
The reason why LI can stand out among the new forces in car manufacturing is that Han Weidong, an analyst at Guosen Securities, believes that LI has adopted the dual-technology route of extended-range electric and high-voltage pure electric, which has well adapted to the needs of customers in the period of automobile electrification transformation. In the case that the problem of charging energy for pure electric vehicles still has shortcomings and cannot adapt to all travel scenarios, extended-range electric vehicles are an excellent transitional choice. It has better cost control ability and higher overall operating efficiency. Compared with the mainstream new force car companies, all business indicators and operating indicators in LI are at the best level.
Prices are running wild.
Under the rush of sales, LI’s pricing ceiling continued to break through. The pricing of the first pure electric vehicle "Ideal MEGA" will exceed 500,000 yuan.
As early as February 2021, the price range of products in LI was 150,000 yuan to 500,000 yuan. In August of that year, when it went public in Hong Kong, the LI prospectus adjusted the price range of smart electric vehicle products. The lower limit of the price range has been raised from 150,000 yuan to 200,000 yuan, that is, "strategically focus on new energy vehicles with prices ranging from 200,000 yuan to 500,000 yuan".
Shen Yanan, co-founder and president of LI at that time, told the Beijing News Shell Finance reporter that it is a fast-growing market to further define the product positioning as family-made cars. The market size of 200,000 to 500,000 yuan will exceed 5 million vehicles this year, and it is expected to exceed 8 million vehicles in 2025. We are more willing to focus on this price range. In addition, pricing is also related to the positioning of luxury smart electric vehicles.
In fact, the prices of ideal L7, ideal L8 and ideal L9 are all between 300,000 yuan and 500,000 yuan. Regarding the firm pricing, Li Xiang once said, "Many people say, why doesn’t the ideal reduce the price to less than 300,000? The same problem, consumers do not accept a good brand of medium and large SUVs sold for more than 200,000. "
However, Li thought it might be necessary to pay attention to a situation. In the first quarter of 2023, LI’s revenue was 18.79 billion yuan, and a total of 52,600 new cars were delivered, with an average price of 357,200 yuan. The average price is equivalent to the pricing of the ideal L7. At present, the sales of the ideal L7 also contribute the most.
The price of "Ideal MEGA" will exceed 500,000 yuan, or it is related to LI’s high investment. LI has previously issued a "dual-energy strategy" which includes two major directions: "intelligence" and "electricity". In June, Liu Qiang, the person in charge of power drive in LI, said, "In terms of power strategy, LI will build a 5C model with a charging time of 9 minutes and 30 seconds and a battery life of 400 kilometers, a 5C super charging network and an automatic charging robot to effectively solve the two major problems of slow charging speed and long-distance charging difficulty."
Zeng Duohong, an analyst in soochow securities, believes that the launch of new pure electric products will improve the layout of the company’s new energy vehicle product line. The L series extended range product line will match the pure electric product line launched in 2024-2025, and rely on core technologies such as 800V high voltage +5C battery +Mind GPT+ scenario NOA to help the overall sales/market share increase continuously.
Zhang Xiang, a visiting professor at Huanghe Institute of Science and Technology, believes that the competitiveness and attractiveness of the first pure electric vehicle in LI may not be as good as that of the extended-range vehicle, because the market development stage and situation are different. At first, there were few competing models of extended-range vehicles, and the market was a blue ocean; At present, there are many competitors in the pure electric vehicle market, such as Tesla and BYD.
"Now the market competition is very fierce, the growth rate of the new energy automobile industry is slowing down, and the growth of LI may also slow down. In order to maintain growth, LI should expand its product matrix, and its products should sink. It can’t just do more than 300,000 yuan, but also sink to 200,000 yuan, otherwise the growth momentum may be slowly lost." Zhang Xiang believes.
The strategy is running wild
Li Xiang has always been a fanatical fruit powder, and his products have always been in line with Apple: the doll strategy of "one configuration" is similar to that of the early iPhone with only one model; Drawing lessons from Apple’s product model, besides the Pro version and Max version, the Air version is launched.
Li Xiang was influenced by Huawei again. In June, Li Xiang wrote, "In the third quarter of 2022, the release and trading of M7 in the world directly crippled Li ONE. We have never met such a strong opponent, and for a long time we have no strength to fight back. HW’s super ability directly caused Li ONE’s sales to collapse and stop production in advance. It lost more than one billion in one quarter, and the team was disabled. I couldn’t sleep at all. Our ability was really poor, and it collapsed in the face of people’s very basic moves, which caused a large number of product experts who struggled in the front line to leave. "
In fact, at the end of June, 2022, LI’s "two children" ideal L9 was released, which was called "the best flagship SUV for home use within 5 million" by Li Xiang, and the delivery volume of LI in August of that year suffered a "waist-cutting" drop. In the third quarter of 2022, the delivery volume was 26,524 vehicles, with a year-on-year increase of only 5.6%; The company’s net loss expanded year-on-year.
In fact, the asking M7, regarded by Li Xiang as a super rival, sells for around 300,000 yuan. At that time, Huawei Yu Chengdong proposed that "the goal of M7 is still to surpass the comfortable and intelligent experience of millions of luxury large SUVs and MPVs."
In the face of pressure, Li Xiang introduced that at the end of September 2022, the company held a strategic meeting to reach a consensus to comprehensively study Huawei, upgrade the matrix organization as soon as possible, and be able to fight positional warfare and bid farewell to guerrilla warfare completely. "Our management team has bought no less than ten public books on HW. We were surprised to find that the painful problems we encountered in product research and development, sales and service, supply and manufacturing, and organization of finance and economics were solved more than ten years ago, even twenty years ago."
Determined to learn from Huawei, in December 2022, LI launched a comprehensive matrix organization upgrade with an annual income of 100 billion yuan. "In the development stage from 0-1, speed is efficiency, and the vertical organization model has helped us achieve a revenue scale of 10 billion, and we have done very well; From the development stage of 1-10, quality has become efficiency. We need to use organizational upgrading to achieve a breakthrough in the scale of billions of income and challenge the scale of trillions of income. " Li Xiang said.
At the Shanghai International Auto Show in April, 2023, LI released a "dual-energy strategy" with two directions: intelligence and electric energy. By 2025, LI will form a product layout of "one super flagship+five extended-range electric vehicles+five high-voltage pure electric vehicles", which will be oriented to a market of more than 200,000.
With the continuous high sales volume, when Li Xiang forwarded the news that "new energy vehicles are exempt from vehicle purchase tax" on June 21, he said, "Very good, and directly gave a four-year stability policy. There is no excuse for our team to achieve the strategic goal of the company in 2025. 1.6 million vehicles/year, 500 billion revenue, verified in early 2026! "
Li Xiang and LI running all the way, all the way "super class".
Han Weidong believes that it is predicted that the company’s total revenue in 2023 will continue its rapid growth in recent years, reaching a scale of about 90 billion yuan, mainly due to the rapid increase in automobile sales again. In terms of profitability, it is predicted that the company will turn losses into profits in 2023. Under the background of increasingly fierce competition in the industry, it is expected that marketing and management expenses and research and development expenses will continue to grow at a high rate, which will erode the total profit scale to some extent. At the same time, it is predicted that the company’s revenue level will continue to grow at a faster rate in 2024, reaching a scale of more than 130 billion yuan, and the profit level is expected to be significantly improved.
Beijing News Shell Financial Reporter Chen Weicheng
Editor Xu Chao
Proofread Liu Jun