For over 20 days, the "Weibo King" Li Xiang surprisingly remained silent on the platform. The disappointing debut of the Ideal MEGA undoubtedly cast a surreal shadow over Ideal Auto's previously shining reputation from top to bottom. Was it the external criticism that led to MEGA's lower-than-expected sales, or were there issues with the product and strategy themselves? During this time, Li Xiang must have experienced turbulent emotions. He once spoke out, stating "we must fight darkness with light," but it didn't make much difference in the market. Ultimately, he chose to admit fault and decided to adjust the pace and start anew.
In the world of automobiles, Li Xiang, the CEO of Ideal Auto, is undoubtedly deserving of the title "Weibo King." This isn't self-proclaimed but rather an evaluation from peers. On June 16, 2023, Great Wall Motors held its annual shareholder meeting. While summarizing the company's achievements, the company's president, Mu Feng, humbly mentioned learning from industry leaders: NIO led in user operations, XPeng excelled in smart driving, Chery led in overseas expansion, and in social media marketing, everyone looks up to the "Weibo King" Li Xiang of Ideal. Mu Feng's appraisal of Ideal might not be mere flattery. After all, just a few days before, he and several executives from Great Wall Motors collectively joined Weibo. Li Xiang might not have seen it this way, as beneath this news, he commented in his usual style: "Too bad we can't buy Weibo..." In the past, Li Xiang used his personal Weibo to speak for the brand and the industry, challenging everything. This was the persona he crafted for himself, and the intermittent success of Ideal Auto gave him the confidence to do so. In the bygone year of 2023, Ideal Auto celebrated phenomenal performance. Revenue exceeded a trillion, profits surpassed a hundred billion, and cash reserves reached over a hundred billion, making it China's first profitable new force in car manufacturing. Riding this wave, Li Xiang set a sales target of 800,000 vehicles for Ideal Auto in 2024, meaning an increase of 112.77% from the 376,000 vehicles sold in 2023. No matter how busy or pressured he was, in the world of Weibo, Li Xiang remained the hardest-working CEO. In February alone, Li Xiang published and commented on 39 Weibo posts, not even taking a full break during the Chinese New Year holiday. Several of these posts were to hype up the impending release of MEGA, Ideal Auto's first all-electric product and its first MPV, which would play a crucial role in the company's new annual sales target. On March 1st at 3 p.m., at the China Pavilion in the Shanghai Expo Park, Ideal MEGA was simultaneously launched online and offline, unveiling its mystery. In just over an hour, Li Xiang provided a comprehensive introduction to the product, brimming with pride and confidence, claiming that "MEGA will be Ideal Auto's next explosive product and the top-selling product priced above 500,000 CNY." The atmosphere was so intense that when the price of 559,800 CNY was announced, the whole venue erupted. However, immediately after the event, two completely different public opinions emerged regarding Ideal MEGA. Negative reviews and mockery overshadowed the proud "highway bullet train" design of MEGA, twisting it into a taboo "hearse" in the eyes of the Chinese. This undoubtedly dealt a significant blow to the product's sales. After March 2nd, Li Xiang completely fell silent on Weibo, which was not a good sign. Counterattack The day before the launch event, Li Xiang had called out to suppliers and partners via Weibo, stating that pre-orders for Ideal MEGA, at 5,000 CNY each, had far exceeded those for the Ideal L9 in the same period of 2022, and that production capacity must keep up, not to be misled by the assumption of low sales for high-end electric vehicles. Li Xiang and Ideal had high expectations for MEGA, hoping for annual sales of 70,000 to 80,000 units, which would be a significant increment towards the brand's annual target of 800,000 units. Regardless of external criticism, if Ideal MEGA could deliver impressive pre-order numbers, it could shut those critics up for good. However, Ideal didn't do so, and the reality was not ideal either, with a large number of users cancelling their orders. On March 17th, "Late Auto" released an exclusive report, stating that Ideal's expected orders for MEGA within 24 hours were around 3,000 units, but only about half of them were actually realized. In the two weeks after MEGA was launched, the actual orders received were only about 4,000 units. Public opinion continued to ferment, and for this reason, Ideal Auto's PR team should have done a lot of work, but it seemed like they did nothing at all. Even Li Xiang, who was usually outspoken, remained silent for a full ten days. This was not his usual style; he must have been deeply contemplating and preparing for a strong counterattack. Sure enough, on the morning of March 11th, Li Xiang spoke out again, penning a heartfelt and aggrieved letter titled "To the Users and Friends of Ideal Auto," stating, "After careful consideration, we have decided to counterattack and fight darkness with light." After ten days of contemplation, Li Xiang seemed to have finally found the reason for MEGA's disappointing debut, attributing it all to possible "black PR." However, not addressing the root causes such as the product itself, pricing, and market strategy would obviously not help boost sales. For reasons unknown, Li Xiang chose to speak out this time on WeChat Moments rather than the potentially wider-reaching Weibo platform. Admission of Fault Ideal invested a significant amount of resources into MEGA. Market, production capacity, personnel... even limited store space had to make way for the massive MEGA, waiting for customers to flood in after the launch event. MEGA's poor sales didn't just affect one car; it impacted Ideal's overall strategy. On March 21st, Ideal Motors-W (02015.HK) disclosed an update on Q1 delivery expectations, with the company anticipating cumulative deliveries of 76,000 to 78,000 vehicles from January to March, far below the previous expectation of 100,000 to 103,000 vehicles. The following day, the company's stock price plummeted by 10.88%.
Since the release of MEGA on March 1st, Ideal Motors-W's stock price has declined from HK$179.20 to HK$120.40 at the close on March 22nd, losing nearly 30% of its value in just 20 days, wiping out billions in market capitalization.
Now, Li Xiang is truly worried. He realizes that merely talking won't solve the fundamental problem.
On March 21st, he wrote to all employees, admitting mistakes, dissecting the root causes of the company's March issues, and proposing solutions.
After 20 days of contemplation, he finally realizes that the fundamental reason for MEGA's underperformance is the mismanagement of pace. The company treated MEGA's phase from 0 to 1 (the commercial validation period) as if it were from 1 to 10 (the high-growth period). "This is a misjudgment of our pure electric strategy's pace." The chaotic pace of MEGA also significantly reduced the sales team's time and energy to serve L-series users. In terminal stores, even the flagship model, Ideal L8, had nowhere to be displayed.
As a result, Li Xiang decided to adjust the operational pace of Ideal MEGA, abandoning the strategy of full-scale sales and instead focusing on the core user groups in core cities. Once the phase from 0 to 1 is effectively completed, then broader promotion will follow.
In a sense, MEGA's temporary setback is not entirely a bad thing for Ideal Motors. The company's excessive focus on sales desires is exposed. When desires surpass values, the company's expertise in user value and operational efficiency significantly declines, "the pursuit of desires turns us into people we dislike."
Therefore, Li Xiang decided to lower sales expectations and desires and return to healthy growth.
The competition in the new energy vehicle industry is only halfway through, and current success does not guarantee ultimate success. With the acceleration of technological iterations and the continued intensification of industry competition, no one knows who will exit midway.
Li Xiang often praises the prominent "Garage No. 42" account in the automotive industry. On March 11th, the account initiated a topic on Weibo: "In the end, only 2 high-end brands (new energy vehicles) will remain. Who will they be?" The voting results showed that Tesla and WENJIE ranked in the top two, with Ideal ranking fifth after Xpeng and Xiaomi.
