Following the launch of Xiaomi’s SU7, the Chinese automotive market witnessed another significant event in the first half of 2024 – the official launch of Li Auto L6, marking Ideal’s official entry into the market segment priced below 300,000 yuan.
Prior to the launch of L6, Ideal’s pricing strategy had already shown signs of flexibility, with its L-series models offering discounts of approximately 30,000 yuan in the first quarter, bringing the price threshold of L8 within the sub-300,000 range. However, compared to other brands, Ideal’s average selling price still remained higher than that of new energy brands, including Tesla.
The entry of Ideal L6 with a starting price of 249,800 yuan undoubtedly intensified market competition, positioning Ideal alongside brands such as Tesla, AITO, ZEEKR, Xiaomi, XPENG, BYD, and GEEKR. The impact of L6’s launch on the overall market may well exceed its impact on Ideal itself.
As for the rationale behind Ideal’s decision to introduce the mid-to-large-sized L6, initial expectations were that it would be a mid-sized five-seat SUV. After all, Ideal already had the L7 and L8, both mid-to-large-sized models, and the market widely believed that Ideal needed a smaller, more mainstream model to cater to a broader consumer base.
However, when the size parameters of L6 were revealed, it turned out to have an axle base exceeding 2.9 meters, a length over 4.9 meters, and a width close to 2 meters, still positioning it in the mid-to-large-sized segment. Although it is slightly smaller than the L7, the size difference is not significant enough to constitute a different category. This sizing decision undoubtedly raised questions among both the market and consumers.
For consumers, many may not prefer oversized vehicles. In particular, those expecting Ideal to introduce a smaller, easier-to-drive model may be disappointed with the size of L6.
From Ideal’s perspective, the similarity in design between L6 and L7, coupled with the lack of a significant size difference and the lower pricing of L6, may pose a threat to its own L7 model. If some orders for L7 shift to L6 due to price considerations, Ideal will need to carefully weigh whether such internal competition is worthwhile.
However, it’s not difficult to understand why Ideal insists on introducing such a large-sized L6. Ideal has always touted its family-friendly comfort experience as a selling point, with its “dad car” label deeply ingrained in the public mind. To ensure a comfortable and enjoyable experience for every occupant, Ideal has not compromised much on the body size.
Looking at Ideal’s new vehicle planning, it seems that in the short term, Ideal may not introduce a model smaller than L6. This indicates that Ideal’s pursuit of comfort is a core value of its brand, and the size of L6 may be the smallest compromise it can make while maintaining this core value.
In comparing L6 with L7, apart from the slight size difference, there are also some differences in configuration. L6 does not come with the air suspension and overhead large screen that are standard on the L7/8/9 models. Instead, it adopts a CDC variable damping shock absorber and a simpler interior configuration. Additionally, L6 uses lithium iron phosphate batteries and has a reduced battery capacity. These configuration differences make L6 more competitive in terms of pricing while also distinguishing it more clearly from L7.
Despite these compromises in configuration, however, Ideal L6 has not compromised on interior materials, seat comfort, or the presence of a large in-car refrigerator. Furthermore, in terms of intelligent driving, L6 still offers both pure vision and lidar-equipped options, maintaining comparable software and hardware capabilities with existing models.
The launch of Ideal L6 is not only an important strategic move by Ideal in the market but also a forceful challenge to its competitors. Although Ideal did not previously consider brands like AITO as its core competitors, during the L6 launch event, Ideal clearly positioned AITO’s M7 as its main rival. This shift demonstrates Ideal’s flexibility and determination in facing market competition.
In terms of pricing strategy, the starting price of Ideal L6 is on par with the five-seat version of AITO M7, creating a direct and intense competition. While it may seem like a straightforward matchup on paper, Ideal L6 poses a substantial threat to AITO M7 with its richer configuration and more comfortable experience.
Overall, the launch of Ideal L6 not only enriches Ideal’s product line but also intensifies market competition. For Ideal, the challenge lies.
For Ideal Motors, how to maintain the brand’s core value while responding to challenges from competitors will be an important task facing it in the future.
Compared to the AITO M7, the Ideal L6 is indeed superior in hardware with its double-wishbone front suspension, although this advantage may not be as apparent to consumers. It is worth noting, however, that the main sales model of the AITO M7 is the single-motor rear-wheel-drive version, while the entry price of the four-wheel-drive version is as high as 284,800 yuan, which is even higher than the top-of-the-line model of the Ideal L6.
The Ideal L6, which starts at the same price as the AITO M7, insists on adopting a dual-motor four-wheel-drive configuration. This configuration not only gives the L6 an absolute advantage in acceleration, but also significantly improves stability and passability when dealing with rainy and snowy road conditions and complex terrains, which are important factors affecting vehicle handling and safety.
In terms of functional configuration, the five-seat version of the AITO M7 lacks features such as electric steering wheel, steering wheel heating, rear seat electric reclining, and Dolby Atmos sound system, which are all standard on the Ideal L6. Additionally, the high-end version of the Ideal L6 is equipped with a car refrigerator, a feature that is also missing from the AITO M7.
Although the AITO M7 has certain advantages in intelligent driving, these advantages are mainly reflected in the 289,800 yuan lidar version, while the cheaper versions do not have basic high-speed intelligent driving functions. In contrast, even the low-end version of the Ideal L6 relies on visual solutions to achieve high-speed intelligent driving, and the high-end version further utilizes lidar to achieve urban intelligent driving, covering even non-urban country roads.
Of course, whether Ideal’s intelligent driving capabilities can truly catch up with Huawei, an industry benchmark, remains to be tested by the market. But if we only look at the main sales configuration of the AITO M7, the AITO M7 without lidar and high-speed intelligent driving functions does not have much advantage in intelligent driving. In addition, the Ideal L6 also offers additional preferential policies such as a 5,000 yuan deposit equivalent to 10,000 yuan and a 10,000 yuan optional fund, making its actual selling price even more affordable.
At the Ideal L6’s launch event, Ideal Motors explained why it did not introduce a two-wheel-drive version. One particularly meaningful statement was, “We considered a two-wheel-drive version, but with an acceleration time close to 8 seconds, its performance falls far short of requirements when facing complex road conditions, so we decisively abandoned the two-wheel-drive version.” This statement is undoubtedly a targeted response to the AITO M7’s rear-wheel-drive version’s 0-100km/h acceleration time of 7.8 seconds.
So, facing such fierce market competition, does Ideal still have a chance to achieve its sales target this year? However, as time goes by, it is becoming increasingly apparent that the market environment faced by Ideal Motors has undergone many changes. The MEGA model encountered a public opinion storm after its launch, with orders falling short of expectations. Li Xiang, the founder, even issued an apology letter. At the same time, Ideal Motors has also adjusted its annual sales target, reportedly to 560,000 to 640,000 units. Even so, this target remains full of suspense.
Previously, Ideal Motors set its annual sales target of 800,000 units based on the assumption that the MEGA model would become the sales champion in the over-500,000 yuan segment and that the launch of the L6 would not impact the existing sales base of the L7/8/9 models. These three models needed to maintain a monthly sales volume of over 40,000 units while keeping prices stable.
However, as of mid-April, we see that the previous expectations have not been met. The sales target for the MEGA model has been significantly reduced, and the L7/8/9 models have generally adopted price cuts to cope with market pressure brought by new models from competitors. The highly anticipated Ideal L6 has also had to lower its stance, matching its price with the AITO M7 despite offering higher configurations.
This is the first time that Ideal Motors has so clearly targeted a specific competitor in its market strategy. Its previous attitude of “not reducing prices, not targeting competitors, and not blindly engaging in industry competition” has become difficult to maintain. The internal competition in China’s auto market has finally caught up with everyone, and Leading ideal has officially kicked off its counterattack.
