Recently, the Ideal Auto public account released the sales figures for the 25th week of 2924, with Ideal Auto achieving weekly sales of 11,700 units, ranking first in sales among new force brands in the Chinese market for nine consecutive weeks.

Looking back at the delivery situation of Ideal Auto last month, a cumulative delivery of 28,277 new cars was achieved in May, representing a year-on-year increase of 146%. More than 20,000 cars have been delivered for three consecutive months, and the delivery volume of Ideal L7 has exceeded 10,000 units for two consecutive months. Sales and delivery have been increasing steadily.

However, Ideal Auto, which seems to be in the limelight, has actually been at the forefront of controversy.

Ongoing Controversies as Ideal Faces its "Trials"

In the first half of this year, Ideal Auto's journey of challenges was comparable to a "roller coaster on a devilish road section."

Starting from the launch of the Ideal MEGA in March, this pure electric MPV, which Li Xiang called a "super flagship," encountered a "Waterloo." Despite much hype, the sales data after its launch was not satisfactory.

According to data from the China Passenger Car Association, in April this year, the narrow wholesale sales of Ideal MEGA were 1,145 units, representing a month-on-month decrease of 64.54% compared to the 3,229 units sold in March. This is far from Ideal's expected monthly delivery target of 8,000 units.

Has Ideal, which made strategic errors at that time, learned its lesson?

At that time, Ideal Auto was also embroiled in rumors of large-scale layoffs. According to a report by 21st Century Business Herald, after the May Day holiday, Ideal Auto was undergoing a new round of optimization of its entire workforce, with an overall optimization ratio of over 18%, involving an estimated 5,600 layoffs. More dramatically, less than a month after the layoffs, Ideal announced the "withdrawal" of some layoffs.

Following the MEGA and internal staff optimization, Ideal's pure electric strategy suffered setbacks, and the company continued to experience turbulence. On May 20, when Ideal released its first-quarter financial report, it also announced that it would not release pure electric SUV products this year, expecting to postpone them to the first half of next year.

With the shelving of new pure electric products, Ideal enters a "downtime," and uncertainty increases. The increase in revenue without an increase in profits in the first-quarter financial report further shook investors' confidence.

First-quarter financial report data showed that Ideal achieved total revenue of 25.6 billion yuan, representing a year-on-year increase of 36.4% and a month-on-month decrease of 38.6%. Net profit was 591.1 million yuan, down 36.7% year-on-year and 89.7% month-on-month. Excluding US GAAP, net profit was 1.3 billion yuan, down 9.7% year-on-year and 72.2% month-on-month.

After the results were released, Ideal's share price also failed to withstand the pressure, with Ideal's US shares plunging 12.78% on the day, and its total market value shrinking by nearly $3.3 billion overnight. Subsequently, on May 21, when Hong Kong stocks opened, Ideal's share price continued to decline. As of the midday break, Ideal's Hong Kong stocks plunged 19.2%, with its total market value shrinking by nearly HK$37.7 billion.

Also due to the sharp drop in share prices, on May 16, Ideal trended on Weibo due to the topic "#Ideal Auto Faces Collective Lawsuit#." Subsequently, Ideal responded that the allegations were unfounded.

Not only that, in the past two months, Ideal Auto has also been involved in a series of accidents, including a chain rear-end collision of the Ideal Shantou Car Club, a high-altitude fall of the Ideal MEGA, and a high-speed lane change rear-end collision of the Ideal L9.

Has Ideal, which has been facing "misfortunes never come singly," "fallen"?

Ideal: A Balance between Price and Value

Looking at the longer timeline, the MEGA seems to have been the "spark" that triggered all these events. Ultimately, this is because there is a "imbalance" between price and value in Ideal's first step in its pure electric route.

After all, when consumers choose a product, the final decision often depends on the price and value of the product. Although the appearance of the product is one of the influencing factors, the key to the decision lies in whether the product can provide value that matches its price and whether it can effectively address the buyer's actual needs.

This time, Ideal's pure electric route still focuses on "creating a mobile home, creating a happy home." From Ideal ONE to L789, Ideal has been implementing this idea. The idea is not wrong, but the problem lies in the positioning of Ideal MEGA as a high-end pure electric MPV for household use, comparable to Toyota Alphard and Mercedes-Benz V-Class, where there is a divergence.

Toyota Alphard, Mercedes-Benz V-Class, and Buick GL8 are essentially commercial vehicles, and their usage scenarios are mainly concentrated in business occasions, which is contrary to Ideal's concept of household vehicles. The difference in usage scenarios further affects the reach of the target audience.

According to Sina Finance data, over 80% of household vehicles are priced below 200,000 yuan, which means that there is a mismatch between Ideal MEGA's price and positioning.

If compared with Xiaopeng X9 and Tencent Momentum D9, which are also positioned as household MPVs, data from Autohome shows that Xiaopeng X9 is priced between 359,800 yuan and 419,800 yuan, while Tencent Momentum D9 is priced between 324,800 yuan and 660,000 yuan. There is a significant price gap, and the cost-effectiveness is readily apparent.

In addition, Toyota Alphard, Mercedes-Benz V-Class, and Buick GL8 possess value beyond the car itself, in short, the "face" attribute. This feature is something that Ideal cannot achieve overnight.

The阶段性 issues are already clear, so when will Ideal's "trials period" end after the "turmoil"?

The "Evolving" Ideal Will Eventually See the Clouds Disperse

Despite the continuous "bad news," Ideal's continuously increasing delivery volume and the impressive first-month sales of 13,000 units of Ideal L6 are sufficient to demonstrate its firm position in the hearts of consumers. This means that being surrounded by "negatives" is only a phased difficulty.

According to the latest news, Ideal remains unmoved by the recent setbacks.

On June 28, Ideal Auto tweeted on Weibo that Ideal Auto's 2024 Smart Driving Summer Launch Event is scheduled for 8:00 pm on July 5. It has only been 20 days since June 8, when Ideal Auto's founder, Li Xiang, delivered an impromptu speech on breakthroughs in autonomous driving technology in Chongqing.

Li Xiang, the founder of Ideal Auto, mentioned that based on the existing computing platform, supervised L3-level autonomous driving could be achieved as early as the end of this year or as late as the first half of next year, and unsupervised L4 autonomous driving could definitely be achieved within at least three years.

It can be seen that Ideal has begun to positively respond to market doubts with actions and is gearing up for the next "main event."

Recently, the competition between Ideal and Tencent Momentum has also been a hot topic in the automotive circle. In this week's rankings, Ideal led Tencent Momentum with a slight advantage of 11,700 weekly sales over 10,700, which, to a certain extent, silently proved Ideal's strength.

However, the reason why Tencent Momentum has always been highly regarded in the high-end SUV camp is largely due to its intelligent driving capabilities endorsed by Huawei.

So, which is stronger between the two? Fundamentally, Ideal's intelligent driving route is similar to Tesla's FSD route, both using end-to-end + visual big models, while Huawei's intelligent driving ADS belongs to a different camp.

Although Huawei is currently using pure vision, its visual algorithms are used for video object recognition, combined with radar detection and sensors to collect data, merge for 3D physical modeling, and then achieve the purpose of autonomous driving through distance and speed algorithms.

Ideal's pure vision focuses on acquiring image data and then performing driving analysis based on deep learning algorithms. Moreover, deep learning algorithms can automatically identify the inherent connections and essential laws between things and continuously iterate and evolve.

It is worth noting that the ability of deep learning algorithms depends on intelligent driving data. One is visual modeling data (collected using radars, cameras, etc.), and the other is driving operation data (such as braking, overtaking, and avoidance by drivers). Combining the two can train deep learning models for intelligent driving.

Among them, driving operation data comes from users' actual driving. As of June 21 this year, Ideal Auto has delivered a cumulative total of 800,000 vehicles, which is something that "latecomer" Huawei lacks. Therefore, it is inevitable for Huawei to choose a high-end radar intelligent driving solution with relatively high costs and low reliance on algorithms.

It can be seen that what Ideal Intelligent Driving needs to do is to accumulate driving data as much as possible, then train and feed the data to the large model, accelerate the upgrading and evolution of the model, and refine a "brain" that can independently analyze road conditions, which is closer to autonomous driving.

Due to the lack of a deep learning intelligent driving model, Huawei Intelligent Driving needs to manually develop and cover corner cases (CORNER CASE) and equip it with high-end detection and sensing devices to achieve high-level intelligent driving.

At the same time, this also reflects that Ideal's current intelligent driving strategy will reduce reliance on human resources, and recent layoffs may not be caused by negative factors.

After comparing the two, one relies on high-end equipment and high costs but wins in "quick results"; the other is "evolutionary," able to draw inferences from one instance, with significant effects seen in the long run. Perhaps the future is Ideal's "value realization period" after accumulating strength.

Conclusion

Although Ideal's pure electric route suffered setbacks in stages this year, the newly launched Ideal L6 performed impressively, and the overall sales of the L series are gradually increasing, maintaining a solid foundation. Therefore, the recent setbacks are not cause for concern.

After this battle, although Ideal has been significantly affected in terms of share prices and investor confidence, it may soon emerge "reborn from the ashes."