Auto & Transportation

At the 2021 Shanghai International Auto Show, among the three "new car-making forces" in China, only Ideal (LI.US) remained silent and did not hold a press conference.

The number of single-vehicle deliveries is the first, but the growth rate of total deliveries has begun to lag behind; the earliest profit, but the cumulative decline in stock price, and the lowest market value; the only company that takes the “increasing program” route is considered a transition technology. These contradictions are concentrated in ideals. Body.

As more and more technology companies and traditional car companies enter the new energy vehicle track, industry competition has become more and more severe. The ideal car that once used "no choice" to win a precise customer base is in the increasingly cruel industry struggle. How long can you run?

On April 26, on the Rongyi Information Network (www.ironge.com.cn), a person from Ideal Auto replied to the Red Star Capital Bureau, “I think any form of energy is a transition. Isn’t it a transition for more than 100 years of fuel vehicles? Electricity is not necessarily the end."

Weilai, Xiaopeng release new car ideals to remain silent

During the Shanghai International Auto Show, thousands of auto companies held 138 grand press conferences to compete for the best.

Among the top three new forces, NIO (NIO.US) brought ET7 and Xiaopeng (XPEV.US) brought P5, both held new car launch conferences; only ideals did not participate in the game in a low-key manner, nor did they launch new ones. product.

Up to now, the ideal product is still only the ideal ONE product; in contrast, counting the new cars released this time, Weilai has 4 products and Xiaopeng has 3 products.

As more and more technology companies and traditional car companies enter the new energy vehicle track, the industry battle is getting more and more serious. If new energy players are divided into three categories, there are roughly industry pioneers represented by Tesla (TSLA.US), traditional car giants that are transforming, and new car-making power entrepreneurial companies.

Separately, in the current Chinese market, the pioneer Tesla is falling into the center of public opinion; traditional car companies and ships are difficult to turn around. The transformation of new energy vehicles not only needs to compete with other companies, but also has the same positioning as fuel vehicles under its own brand. "Fighting" internally, while also facing the problem of weak brand impression. Even the 2020 sales runner-up Wuling Hongguang MINI is still being questioned by safety issues such as the absence of airbags.

It is under this background that the new power car manufacturers have gained a window of development. China Automobile Manufacturers Association Jia Xinguang previously pointed out in an interview with the Red Star Capital Bureau that "After traditional cars entered the industry, the new energy war has just begun."

So what are the results of the three new car-building forces running to the present? What are their respective moats, are they all reliable? Analyzing their product layout, financial report data, and capital performance may reveal some clues.

Ideal silence

Is the ideal future pure electricity or extended range? This problem has never disappeared since the initial development of the ideal. In the past few years, there is still only an ideal car company that takes "extended program" as its flagship product.

"Extended program" is the only weapon "no choice" is the most advantageous moat

The so-called "extended range electric drive technology" refers to the use of an engine and a generator to convert oil into electricity, and then output the electricity to the drive motor to drive the vehicle, and the surplus electricity will be charged into the battery.

The advantage of this is that it solves the pain points of long charging time and mileage anxiety of pure electric vehicles, and brings traditional fuel vehicles to the advantages of saving fuel and money, as well as the smooth acceleration and fast speed of pure electric drive.

However, because the extended-range electric drive technology is a technology between pure electric and traditional fuel vehicles, it is complicated and relatively poor in emission reduction, so most car companies regard this as a transitional solution, and few people do it.

There are few people participating, which leaves consumers with no choice in this range, which instead achieves their ideals, and this just shows that pure electric new energy vehicles still have a way to go in the future. Some netizens summed up the ideal success in one sentence, that is, "Eating the dividends of the transition period is essentially a bet that China's charging pile infrastructure is not as fast as expected."

So how long is the transition period?

First of all, in terms of policy, the dividend may have come to an end. On February 10, Shanghai issued the "Implementation Measures of Shanghai Municipality to Encourage the Purchase and Use of New Energy Vehicles". Through differentiated arrangements, it has increased its support for pure electric vehicles, clarifying that from January 1, 2023, consumers will be Those who purchase or accept plug-in hybrid vehicles will no longer issue special license plates. In Beijing, hybrid vehicles can only be purchased with fuel vehicle indicators.

"I think any form of energy is a transition. Isn't it a transition for more than 100 years of fuel vehicles, and pure electricity is not necessarily the end." On April 26, an ideal car-related person replied to the Red Star Capital Bureau, "I did not deny that it is not a transition. , But I don’t know how long this transition period will be. I can only take the example of a fuel vehicle."

Two lines developing in parallel

Extended range and pure electricity

I don’t know how long the transition period will last. In fact, we are also deploying pure electricity.

In the fourth quarter 2020 earnings conference call, Ideal CEO Li Xiang said that starting from 2022, Ideal Auto will release at least two new products to the market every year, and will deliver pure electric products in 2023. Ideally, it also confirmed to the Red Star Capital Bureau that extended range and pure electricity are two parallel development lines for the company.

Not long ago, Li Xiang said that Ideal Auto’s R&D headquarters in Shanghai is almost ready. The address is located in Anting Town, Jiading District. It can be settled at the end of this month and can accommodate 2,000 people as a whole. It is understood that the Shanghai R&D Center will focus on high-voltage platforms and ultra-fast charging technology, autonomous driving technology and next-generation smart cockpit technology.