The Zhitong Finance App learned that Ideal Automobile-W (02015) recently held a performance exchange meeting for the first quarter of 2024. At the meeting, the company said that it will not release pure electric products this year, and H1 will be released next year. Because it is necessary to launch enough self-operated overcharging stations first, and at the same time upgrade general stores and shopping mall stores that add more booths first, the number of booths is very important, and the number of L8 booths has been reduced by 40%.

When asked if the Q2 sales volume is 105-110,000, if there is pressure to reduce the price to achieve the target, Ideal Auto said that the L series has been recognized by customers and has sufficient product power; the L6 has ordered 41,000 units from 4.18 to 5.5, and the L series sales volume is steady. The company is still optimistic about future L-series shipments.

Q&A

Q: Q2 sales volume is 105-110,000. If there is pressure, will the price be reduced to achieve the target?

A: The L series has been recognized by customers and has sufficient product strength; the L6 has ordered 41,000 units from 4.18 to 5.5, and the L series sales volume is steady. We are still optimistic about future L-series shipments.

Q: Gross profit margin, 24-year target of 20%. If guidelines are maintained, what factors will enable this target to be achieved?

A: The electric vehicle industry has a strong scale effect, which will in part put pressure on our profits. Second, we are expecting growth in product sales, and we will also make internal management adjustments to gain more market share. Q2 will be the hardest time of the year.

Q: Is there room for improvement in the H2 marketing strategy? Price reduction or configuration upgrade? Will the L7-9 reduce the H2 price to increase sales?

A: After the product pricing was adjusted in April, consumers approved, L7-9 orders continued to grow, and the company has no subsequent price adjustment plans. Sales volume and gross margin are the two most important metrics.

Q: Costs, staffing scale, and channel network adjustments throughout the year, and adjustments in R&D and marketing campaigns for the second half of the year?

A: Over the past 2 months, we have reallocated and adjusted our business strategy. We will be making some internal business adjustments, which are expected to be reflected in Q2.

Q: What is the goal of opening a new store? Store location?

A: First, expand the sales center and service network, mainly considering places with high sales volume. We're opening 43 new retail stores this year, and we're going to shut down some smaller ones. As of April 19, our marketing centers have reached 488, covering 100% of second-tier and above and 89% of third-tier cities. There are already 215 showrooms to increase coverage. In the long run, we will add more autonomous driving theme parks to enhance brand influence.

Q: What do you think of the convergence of autonomous driving? Subsequent pure electric product planning?

A: The convergence of autonomous driving technology. City NOA in the industry has big plans and no plans. Ideally, Q3 will push the unimaginable city NOA to all AdMax users. Technology is easy to agree on, but training requires a large amount of data and training computing power, so the difference will eventually be reflected in product power and user value. The company will not release pure electric products this year; next year, H1 will be released. Because we have to launch enough self-operated overcharging stations first, and at the same time, we need to upgrade general stores and shopping mall stores with more booths first. The number of booths is very important, and the number of L8 booths has been reduced by 40%.

Q: There will be new products for pure electricity in the long term. Are you considering establishing a special brand or channel for pure electricity?

A: We're still discussing it. The channels will be consistent.

Q: The wealth effect of the middle class is weak. Has the market position been updated? Did the market positioning for the second half of the year mainly come from households or what?

A: The market positioning of over 200,000 high-end home users remains unchanged. We haven't done a good enough job; this market also has more segmented user values that can be developed.

Q: Overseas expansion plans?

A: This year, we will establish our own after-sales service centers overseas, including Europe and North America, to provide better service. However, we will pay more attention to the domestic market this year.

Q: Company organization adjustments, future direction? Which departments want to invest more resources?

A: This wave of special quality operation teams was set up to make high-quality decisions and improve execution efficiency, but it may take 12-24 months to see results. It is estimated that the results will be visible after 25 years.

Q: NOA cities are opening up faster. How important is NOA to customers? Will it change consumer spending behavior? Will it have an impact on tail companies without NOA?

A: The NOA mileage version launched in May accounts for 65% + of the usage mileage. The usage rate can be seen as the degree of approval. The opening of Tesla FSDV12 will trigger the next stage of competition in intelligent driving, and consumers will pay more attention to smart driving features and experiences. We will invest more in research and development in intelligent driving.