Q2 LI AUTO-W revenue doubled YoY, Q3 delivery expectations have reached production capacity limits.

According to the news from Zhītōng Finance APP, on August 8th, Li Xiang, the Chairman and CEO of Ideal Car-W (02015), announced the second quarter earnings report. The data shows that the company's quarterly revenue reached 28.65 billion yuan, a year-on-year increase of 228.1%. During the same period, 86,533 new cars were delivered to customers, a year-on-year increase of 201.6%. Both revenue and delivery volume reached new highs. In terms of sales, thanks to the popularity of the Ideal L series models, Ideal Car has continuously broken monthly sales records. In July, Ideal Car's sales exceeded 30,000 vehicles again, with a cumulative delivery of 173,000 vehicles from January to July.

Mr. Li Xiang, the Chairman and CEO of Ideal Car, commented, "In June, we crossed the important milestone of delivering 30,000 vehicles in a month. The delivery volume in the second quarter reached a historical high, and all three models of the Ideal L series maintained sales leadership in their respective market segments. These achievements have consolidated Ideal Car's market position as the preferred luxury car brand for families and laid a solid foundation for achieving the target of over 100 billion yuan in revenue by 2023. In the increasingly competitive Chinese new energy vehicle market, we achieved our best-ever profitability in the second quarter of this year. At the same time, we are enhancing our competitive advantage through continuous investment in research and development, rapid business expansion, improvement of organizational processes and operational capabilities."

It is worth noting that Ideal Car is conservative about the delivery volume in the third quarter. The company expects the vehicle delivery volume in the third quarter to be between 100,000 and 103,000 vehicles (an average of 33,300 to 34,300 vehicles per month), a year-on-year increase of 277.0% to 288.3%. At the performance briefing, Li Xiang frankly stated, "The delivery expectations we have put forward currently represent our production capacity limit." In response, Ma Donghui, the President of Ideal Car, revealed that there are two production lines in Changzhou that produce models such as L7, L8, and L9, with a maximum monthly production capacity of 50,000 units. The main bottleneck lies in the supply of components. Currently, the component production line is still being debugged and verified, and the new production capacity will be released soon.

However, the company has formulated improvement strategies and plans for relevant components in the second quarter, but it will take some time for the production line and tooling debugging and verification of the components. In addition, Ideal Car has also made early planning and preparations for production capacity in the coming years. In the interim report, Ideal Car stated that the goal is to achieve revenue exceeding 100 billion yuan in 2023.

In the current situation where most new car brands are continuously losing money, Ideal Car has achieved profitability for three consecutive quarters, with operating profit and net profit of 1.63 billion yuan and 2.31 billion yuan, respectively. According to the established development plan, Ideal Car is expected to achieve the goal of turning losses into profits for the whole year of 2023.

Li Xiang admitted during the second quarter earnings conference call that considering the development of the economic situation and the upgrade of the company's organizational matrix, it would fall into a historical experience of 2 to 3 years of development stagnation. Therefore, the annual sales target was lowered from the originally planned 360,000 vehicles to 300,000 vehicles, and the current production capacity limit of Ideal Car is 8,000 vehicles per week. Ideal Car hopes to achieve monthly sales of over 40,000 vehicles in the fourth quarter. According to reports, the NOA (Navigate on Autopilot) feature of the Ideal Car City has entered a crucial stage of implementation. As of June this year, the training mileage for autonomous driving has exceeded 600 million kilometers. Recently, Ideal Car has launched the city NOA internal testing in Shanghai and Beijing, which does not rely on high-precision maps. During the mid-term performance briefing, the company stated that in the second half of the year, the internal testing area for Ideal Car's intelligent assisted driving technology will gradually expand. The NOA plan aims to be implemented in 100 cities, and the commuting NOA feature will also be opened to early adopters.

In addition, Ideal Car has made significant progress in the field of pure electric vehicles. In order to effectively solve the problems of slow charging speed and difficulty in long-distance charging, Ideal Car has developed the 5C pure electric vehicle based on its self-developed 800V high-voltage pure electric platform, which can achieve optimal performance of "12 minutes of charging for 500 kilometers of range".

The company stated that it plans to complete more than 300 5C charging stations by 2023, mainly covering the Yangtze River Delta, the Greater Bay Area, the Beijing-Tianjin-Hebei region, and the Chengdu-Chongqing region. By 2025, there will be more than 3,000 charging stations, covering over 90% of highway mileage and cities. The average distance between Ideal Supercharging Stations along highways will be less than 100 kilometers.

Furthermore, with the increase in monthly deliveries of Ideal Cars, the company's Beijing factory is also about to be put into operation. It is reported that the production qualification of Ideal Car's Beijing Green Intelligent Factory has been officially approved by the Ministry of Industry and Information Technology in July, and it has the production conditions. The Beijing factory has undergone comprehensive digitization, intelligence, and automation upgrades based on the original foundation.

Regarding stores, Ideal Car pointed out that stores that have been in operation for more than 6 months should achieve an average monthly order volume of more than 100 vehicles per store. Attention should be paid to the efficiency of the stores, while not overly focusing on short-term performance and neglecting the long-term development and investment of the entire store. In the future, more stores will be opened, and the logic of store openings will basically follow the quantity and logic of Mercedes-Benz, BMW, and Audi to support the company's sales.