Even the “Range Extender King” has to join the price war.
Early this morning, Ideal Auto announced two major events. First, they revealed that orders for the new Ideal L6 surpassed 10,000 within 72 hours.
However, what caught the attention of netizens was the first announcement—the across-the-board price reduction by Ideal. Not only L7/8/9, but even the MEGA, which was launched less than a month ago, joined the price reduction campaign, with discounts of up to 30,000 yuan.
After the news spread, prospective buyers were delighted, while existing owners were confused. “Ideal’s across-the-board price reduction” quickly trended, and onlookers quickly gathered.
A year ago, when asked if prices would be reduced, Li Xiang responded that they wouldn’t. However, facing the market now, they had to face reality. Perhaps due to the official price reductions, Ideal Auto’s stock opened down 5.83% and fell nearly 9% by the time of writing.
In addition to the significant price reduction across the Ideal L6 lineup: Li Xiang shows the highest level of respect to competitors!
After experiencing setbacks like MEGA’s failure and a series of “Waterloos,” Ideal couldn’t sit still anymore. Nevertheless, looking at their products, Ideal’s product strength remains, but with the “Range Extender King” beginning to flip the table, the domestic price war is bound to escalate.
01, Existing owners will be reimbursed for the difference
Let’s take a look at the core details of this price reduction:
Starting today, April 22, both customers who haven’t purchased a car yet and those who have purchased but not yet delivered will adopt the new pricing system.
In addition to the significant price reduction across the Ideal L6 lineup: Li Xiang shows the highest level of respect to competitors!
The Ideal L7 Pro is now priced at 301,800 yuan, the L7 Max at 329,800 yuan, and the L7 Ultra at 359,800 yuan. Apart from the entry-level Pro version, which saw a reduction of 18,000 yuan, the mid-to-high-end configurations of the L7 have all been reduced by 20,000 yuan.
Previously, the price range of the Ideal L7 was between 319,800 and 379,800 yuan.
The Ideal L8 follows the same pattern, with all models seeing a reduction of between 18,000 and 20,000 yuan.
In addition to the significant price reduction across the Ideal L6 lineup: Li Xiang shows the highest level of respect to competitors!
The entry-level L8 Pro is now priced at 321,800 yuan, reduced by 18,000 yuan from the original price of 339,800 yuan. The L8 Max and Ultra are now priced at 349,800 yuan and 379,800 yuan, respectively, with reductions of 20,000 yuan.
It’s worth noting that the non-air-suspension versions of the L7 and L8 announced on March 12 have now been canceled again.
According to insiders at Ideal Auto, this price adjustment sees the Pro version covering the price range of the previous Air version, while the L6 also provides excellent CDC suspension to meet demand. Therefore, the Air version will no longer be introduced for the L7 and L8.”
As for the L9, there is a reduction of 20,000 yuan across the lineup. Under the new pricing system, the Ideal L9 Pro is priced at 409,800 yuan, and the Ideal L9 Ultra is priced at 439,800 yuan.
In addition to the significant price reduction across the Ideal L6 lineup: Li Xiang shows the highest level of respect to competitors!
Although price reductions are beneficial, they also raise another issue: what about existing owners?
Ideal has learned from past lessons of “betraying” existing owners, demonstrating sincerity with this move—directly compensating existing owners with cash.
The announcement states that Ideal Auto will provide cash refunds to owners of the Ideal L7, L8, L9, and MEGA who have already received their vehicles. However, it’s important to note that this is limited to owners of the 2024 models only.
Although the specific cash refunds are not mentioned, many existing owners have already shared notifications of receiving cash refunds from Ideal Auto on third-party platforms.
In addition to the significant price reduction across the Ideal L6 lineup: Li Xiang shows the highest level of respect to competitors!
Taking Ideal MEGA as an example, the cash refund notification states: “Unified refund amount of 30,000 yuan for the same model version.” This demonstrates a sincere approach, especially considering that MEGA was previously discounted by 30,000 yuan.
However, there are also owners who have shared notifications of cash refunds for the Ideal L9 Ultra, where the page shows: “Unified refund amount of 15,000 yuan for this model version.” Nevertheless, it’s worth noting that the entire Ideal L9 lineup has been reduced by 20,000 yuan.
In addition to the significant price reduction across the Ideal L6 lineup: Li Xiang shows the highest level of respect to competitors!
It’s evident that Ideal Auto is not just using a complete refund of the price difference for cash compensation but is likely calculating it based on the specific discounts offered at the time of purchase. However, judging from the reactions of existing owners so far, this approach is undoubtedly sincere for the majority of competitors.
Furthermore, the page indicates that along with these price adjustments, new owners will also benefit from new limited-time benefits worth 10,000 yuan, including free color selection worth 5,000 yuan and a free charging pile worth 5,000 yuan.
02, Even if it’s easy to sell, price reduction is necessary
In fact, the recent launch of the new Ideal L6 set the stage for this across-the-board price reduction by Ideal.
As the lowest threshold model of Ideal Auto, the L6 was launched without a more basic Air version, starting directly with the Pro version. At the time, many people discussed why an Air version of the L6 wasn’t introduced.
Now, it appears that Ideal Auto’s official price reduction had been planned before the launch of the Ideal L6.
In addition to the significant price reduction across the Ideal L6 lineup: Li Xiang shows the highest level of respect to competitors!
Moreover, you can see the trend of price reduction from the pricing of the Ideal L6. Considering the price difference between the previous L8 and L7, the significant price difference between the Ideal L7 and L6 before the reduction was unavoidable.
In fact, the Ideal L6 was essentially launched with a reduced price. Liu Jie, Vice President of Ideal Auto’s product line, previously stated at the launch that the original price of the L6 Pro was 259,800 yuan, but after internal deliberation, it was ultimately reduced to 249,800 yuan.
In other words, Ideal’s price reduction this time is actually an official reduction across the entire brand, likely the first explicit official reduction since Ideal was founded.
In addition to the significant price reduction across the Ideal L6 lineup: Li Xiang shows the highest level of respect to competitors!
The root cause of all this goes back to Ideal Auto’s slump due to the failure of its pure electric vehicle model, MEGA.
Li Xiang reflected internally that
the company had mistakenly treated the Ideal MEGA from the 0 to 1 phase (business validation phase) as a 1 to 10 phase (high-speed growth phase) in terms of operations, lowering internal sales expectations and desires.
Moreover, even the sales backbone L-series models were affected. According to Ideal Auto’s announcement on March 21 on the Hong Kong Stock Exchange, due to lower-than-expected sales orders, Ideal updated its first-quarter delivery outlook.
The revised delivery guidance for Ideal’s first quarter is 76,000 to 78,000 units, down by about 24,000 units from the previous expectation of 100,000 to 103,000 units. Additionally, the annual guidance has been lowered to 560,000 to 640,000 units.
The explanation for lowering sales expectations was that Ideal Auto had “overestimated its own capabilities.”
In addition to revising sales targets for the full year of 2024, Ideal Auto previously provided data indicating 800,000 units. This is more than twice the sales of 376,000 units in 2023. To achieve this, Ideal Auto must achieve quarterly sales of 200,000 units in 2024.
However, nearly a quarter of 2024 has already passed, and Ideal Auto has not yet achieved even one-tenth of its annual KPI, falling far short of its goal.
Therefore, Ideal Auto had to adjust its sales target for 2024 to 560,000 to 640,000 units.
Not only has the sales rhythm been disrupted, but in today’s environment of price wars, Ideal, even if it is not worried about selling, has to reduce prices.
According to reports from 36Kr, this price reduction decision by Ideal was made based on feedback from front-line sales. “Internally, we clearly feel a very different competitive pressure this year compared to last year. Although the data on store traffic is still good, customers’ car-buying decision cycles are longer this year, and there is a stronger wait-and-see attitude.”
In fact, just one day before Ideal’s official price reduction announcement, Tesla reduced prices across its entire lineup by 14,000 yuan.
On April 21, Tesla, which had raised prices just three weeks ago, suddenly announced price reductions. Tesla China’s official website shows that the Model 3, Model Y, Model S, and Model X have all been reduced in price, with nine versions across the four models reduced by 14,000 yuan.
Especially noteworthy is that the starting price of the Model Y has dropped from 263,900 yuan to a historic low of 249,900 yuan.
Furthermore, on April 20, Xiaopeng Motors announced a 500 million yuan limited-time car purchase subsidy, running until May 5, 2024, covering almost all of Xiaopeng’s models, including the G9, G6, P7i, and the 2024 Xiaopeng P5.
According to third-party statistics, since April, more than 40 car companies and a total of 128 models have undergone price reductions or promotional adjustments, including 84 traditional fuel models and 44 new energy models. This is the first time in automotive industry history that such a large-scale price reduction has occurred.
Clearly, after the setback of MEGA and the industry-wide price war involving the L-series, Ideal had to administer a strong remedy. Alongside this round of price reductions, Ideal’s automotive gross profit is likely to be affected.
According to third-party sales data estimates, simply subsidizing existing car owners is expected to cost between 550 million and 600 million yuan.
The factory is really going all out.