China Auto News WeChat WeChat official account news, "There are more than 70 billion cash on the account, and it is necessary to turn it into sustainable competitiveness." According to media reports, at the recent autumn strategy meeting held in LI, the top management reached a unanimous understanding, that is, "spending money". It is nothing new that LI has money in his account. In August this year, the data of the second quarter financial report released by LI showed that the operating income of LI in the second quarter was as high as 28.65 billion yuan, a year-on-year increase of 228.1%, a record high. The company’s free cash flow has reached 73.77 billion yuan, an increase of 42.8% from the previous month.
The ideal of "stingy"?
Although it is much richer than before, the ideal spending has always been known as "stingy", and it is one of the most "provincial" enterprises in all automobile enterprises, and even the R&D strength is questioned by the outside world because of the "low" investment in R&D expenses.
The data shows that its R&D investment in 2018, 2019 and 2020 is 790 million, 1.17 billion and 1.1 billion respectively; In the same period, Weilai’s R&D investment was 3.997 billion yuan, 4.43 billion yuan and 2.487 billion yuan respectively; In the same period, the R&D investment in Tucki was 1.05 billion, 2.07 billion and 1.726 billion respectively. Obviously, the ideal investment in early research and development is indeed significantly less than that of peers.
In 2021 and 2022, LI increased its R&D investment, with an investment of 3.29 billion and 6.78 billion respectively, but it was still not as good as Weilai’s 4.591 billion and 10.84 billion, and only surpassed Xpeng Motors’s 5.21 billion in 2022.
However, in the case that R&D investment is not as good as that of its main competitors, LI has abruptly come from behind. I have to say that LI is the most willing to spend money to live among all the new car-making forces and even all the automobile enterprises.
Li Xiang, the founder, has clarified the problem of low R&D investment: the absolute value of R&D investment for a single model in LI is the highest among China brands (neither multi-brand nor multi-model is done well). In the direct marketing system, sales and management fee rate are the least among China brands, far below the R&D expense ratio. Among the directly operated enterprises, the research and development of each car has the highest gold content, and the marketing proportion is the lowest.
Where will the money be spent?
However, the people who eat melons are still curious. What is the reason why such a "stingy" enterprise suddenly decided to spend a lot of money? It is reported that under the grand strategy of strengthening investment, the theme of the strategic meeting involves speeding up intelligent driving, product rhythm, R&D investment, timing of going to sea and so on.
Among them, intelligent driving has been mentioned to an unprecedented height. It is reported that the ideal strategy will spend a day alone to discuss how to invest in intelligent driving. Li Xiang even reflected on himself at the strategy meeting, saying that intellectual driving should be fully invested six months in advance, that is, it began to increase in intensity from the middle of last year, not the beginning of this year.
It can be seen that it is not that LI is unwilling to spend money, but that he had a poor family in the early days and had to save money to live. Now it is time to spend a lot of money, especially in the field of intelligent driving, and he must increase investment.
Li Xiang is very clear that intelligent driving determines the end of this round of automobile revolution. Huawei, Tucki and other competitors’ intelligent driving technical strength is ideal at present. If they don’t exert their efforts at this time, they may be beaten behind in the future.
Where does the target point?
It is reported that at this strategic meeting, the management of LI focused on how to deal with Huawei. Some people think that the company even intends to send relevant high-voltage signals to the middle and high levels, "to make some people who didn’t understand Huawei and didn’t pay attention to Huawei nervous."
In terms of intelligent driving, Huawei, the main competitor, has continued to invest heavily. Yu Chengdong, managing director of Huawei, CEO of terminal BG and chairman of smart car solutions, previously said: "In the era of smart cars, we insist on using digital technologies of’ software, hardware, core and cloud’ to empower the development of electric networked cars. In this field, Huawei directly invests more than 10 billion in R&D every year, and the number of direct R&D personnel reaches 7,000, not including indirect R&D investment. We also apply the accumulated ICT technology to vehicles. "
As far as the current situation is concerned, LI really needs to catch up with smart driving, and it has been recruiting on a large scale. On October 10th, LI recruited WeChat official account to release a special edition on the recruitment of intelligent driving team, and opened 50 social recruitment posts in algorithm engineer, large model engineer, software and hardware engineer, test engineer and operation class.
It is worth noting that the topic of LI’s strategic discussion has even been extended to 2028. LI believes that the penetration rate of new energy vehicles in China can reach 90% at that time. If only four or five companies will remain in the industry, BYD, Tesla and Huawei will all be among them. Ideally, if they want to stay at the poker table, they will sell more than 3 million vehicles at least in 2028, which is double the original target of selling 1.6 million vehicles in 2025.
Correspondingly, LI’s product SOP plan has also been achieved in 2027. During this period, its technology platform will also be iterated. It is expected that by 2026, a new generation of technology platform will be launched, which will have fully automatic driving capability.
At present, Ideality has achieved profitability for three consecutive quarters. If all goes well, LI is expected to achieve the goal of turning losses into profits in 2023 and become the first new car-making force to successfully "land". However, judging from the information revealed at this strategic meeting, achieving profitability is no longer an ideal goal, and it has targeted the top positions in the industry, and may even be the first. Next, it depends on whether Ideality can continue to spend money on the cutting edge.
Original title: The ideal book cash is 70 billion! Next goal: spend money?