Author | Simon
Edit | Li Guozheng
Produced by | Bangning Studio (GBNGZS)
"The key to judging whether a company is stable and mature is how it behaves in the economic crisis and industry crisis, and how to overcome the pitfalls and crises in the process of growth." Financial writer Wu Xiaobo wrote in his famous book "The Great Defeat". The book is known for depicting many businesses from rise to peak to fall and finally death.
The book also writes that failure is not only a lesson for later, but also nourishment for growth, and that the courage to face failures and setbacks is a manifestation of personal strength.
Now, each of these two paragraphs has a footnote - Li Auto and its chairman and CEO Li Xiang.
In another week, on July 5, Li Auto will hold a summer conference on intelligent driving.
Judging from the official information, at this meeting, Ideal will focus on promoting its own no-map NOA, officially announcing the latest progress of intelligent driving products, and at the same time releasing technical solutions to achieve automatic driving.
A few days ago, that is, on June 24, Ideal announced that the OTA 6.0.0 trial version will open recruitment, with an unlimited number of recruits, and it is expected that the push time will be around June 30.
Obviously, at present, the ideal positive cohesion technology port is attacking in full volume, and the pace is getting more and more urgent.
The background of these two events is that the typhoon-like impact of the loss of Ideal Mega is more severe than imagined.
The Mega was launched on March 1 of this year, and for well-known reasons, sales have not been "ideal" so far. In the first month of listing, 3,229 units fell to 1,145 units in April, and again to 614 units in May.
▲The trend of Li Auto's Hong Kong stocks this year (picture source/Xueqiu)
▲The trend of Li Auto's U.S. stocks this year (Image source/Xueqiu)
This led to the fall since March, and on social media, the information of the ideal former employee cutting cards, leaving, and saying goodbye was full of screens; Ideal's share price has been falling and falling, and it is now about 60% below its peak.
The stock price has been sluggish, indicating that the failure of the Mega is not only the failure of one car, but also the failure of the entire M series, or the pure electric strategy - the second growth curve originally planned - into a big failure, and even put pressure on the ideal product logic, profit logic, and management system strength, which are the foundation of the ideal life.
As a leader in the new car-making forces, Ideal has always been regarded as a growth company and the darling of capital. Since the fourth quarter of 2022, it has been profitable for 6 consecutive quarters, and it is one of the new forces with good operating quality and continuous profitability in China so far.
But now, Li Xiang and his Li Auto are in a difficult situation, experiencing the biggest challenge since their birth.
In the short term, the ideal pure electric strategy cannot be promoted as scheduled, which will make it impossible to quickly return on a large range of investments in the field of energy supplementation, and the path to return to the cost has become blurred.
In the medium and long term, in the absence of pure electric support, the ideal will be forced to be trapped in a small circle of extended range. To make matters worse, its unique advantage in this area is no longer there.
Before Mega, the success of the Ideal L9, L8, L7 and the earlier one, its opportunities and first-mover advantage were infinitely magnified. However, the failure of Mega weakened Li Auto's operating ability and product definition ability.
As a serial Internet entrepreneur, Li Xiang began to reform the "life" of the traditional old car market 10 years ago. However, when Huawei, as a super powerhouse in science and technology, entered the automotive industry, the shortcomings of the ideal in terms of products, user cognition, marketing capabilities, brand power and organizational capabilities were exposed, and the rank gap between the ideal and the masters gradually appeared.
Huawei's system, innovation, and strategic action, as well as the ability to mobilize public sentiment, have all crushed the ideal. In the extended range market, because of Huawei's entry, the days of the ideal family being the sole pet are gone.
What makes the ideal even more uncomfortable is that it cannot make up for all this in the short term; It has no way to fight back against such a situation.
The capital market must also expect Ideal to fight a beautiful turnaround battle and regain the confidence of users.
As a result, after the pure electric strategy fell into a big failure, seeking a new second growth curve has become a top priority for Li Xiang and Li Auto.
They have their sights set on intelligent driving.
In the past, Li Auto focused on "a happy home, a mobile home", and its product positioning was clear. Many people pay attention to the sales of its products and some of the topics caused by Li Xiang himself, and ignore his investment in technology.
In fact, the self-research capability of intelligent driving technology and continuous software and hardware upgrades, coupled with the unsparing R&D investment, have provided strong technical support for Li Auto. With its self-developed large-scale model MindGPT, this car-making force has become the first automobile company in China to have a self-developed large-scale model and successfully implement it and obtain national certification. In addition, it is also in the top echelon in the field of no-map intelligent driving NOA.
Han Ling, head of Li Auto's intelligent driving product, said that at present, Li Auto's no-map NOA experience users have covered 315 cities, and the penetration rate of users in prefecture-level (including county-level) cities has reached 97.2%, and the average mileage of NOA without maps of the top 10 users in the past week has reached 523 km/week (within the city).
Converted to a full year, this figure is more than 25,000 kilometers - exactly the number of kilometers traveled by moderate car users per year, which shows how sticky NOA is among these users.
After this OTA update, the Ideal AD Max platform model has added a no-map NOA function, which supports NOA passage from point A to point B within the navigable range of the vehicle-machine map; The AD Pro platform model has new capabilities such as LCC traffic light passing through intersections, NOA defensive distance from the merge and exit strategy.
These have created the first opportunity point for the ideal to build a new second growth curve.
Another opportunity is that Li Auto has a user base of 800,000, which supports its entry ticket for the global promotion of intelligent driving. For the intelligent driving sector based on scale effect, although the volume of 800,000 users is not very large, it should not be too long to exceed one million at the current ideal delivery speed.
After the pure electric fell into a big defeat, in addition to actively seeking intelligent driving as a new second curve, Li Xiang also made rapid adjustments to the decline of the basic disk (including range extension and pure electric).
The first move was to return the focus of the sales team to the L-Series. In May, the sales volume of Ideal L6 was 12,965 units, accounting for 37%; L7 is 9,540 units; L9 was 6,579 vehicles, accounting for 18.79%; L8 is 5,322 units. The overall sales volume of the month was 35,020 units, of which MEGA accounted for 1.75%, but the L series was re-launched rapidly, which greatly made up for the losses caused by the mistake of pure electric strategy.
Then, in terms of pure electric strategy, Ideal adjusted Mega to a conservative posture from 0~1, emphasizing that it will not release pure electric SUV products this year, but in the first half of next year. Taking advantage of this window period, the ideal will speed up the layout of the charging network, focus on the layout of 17 core cities this year, and release the number of charging piles on a weekly basis, so as to lay the foundation and prepare for the comeback of pure electric vehicles next year.
First keep the fundamentals, and then actively seek a new second growth curve - this is the ideal self-help after the defeat of pure electric vehicles. Although the road ahead is still bumpy, Li Xiang's pace of self-help is compact and fast, resolute and decisive.
The biggest revelation from the book "The Great Failure" is that failure always comes unexpectedly, but enterprises and entrepreneurs should learn to look at failure correctly and try to control the losses caused by failure.
As far as the new car-making forces are concerned, whether they are profitable or not, they are actually hovering on the edge of life and death. Man, on the other hand, is not a god, and there is hardly anyone who does not make mistakes. In the face of mistakes, whether corporate decision-makers can quickly stop losses and turn their focus to seek a new growth curve is one of the basic qualities they must have.
As fast as Li Xiang, this time he quickly handed in the answer sheet.
It remains to be seen whether his turnaround will succeed and whether the market will pay for it. After all, in the field of intelligent driving, it is also a strong cloud.