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Ideal car CEO Li thinks: when setting up a product project, the car company will set the stable gross profit margin at 15% Mel 25%. There are four reasons why the actual gross profit margin is far lower.

Shulou Source: shulou.com Published: 2023-11-24 17:23:56 10月03日 Update

Thanks to CTOnews.com netizens for the delivery of clues on the way! According to CTOnews.com news on June 9, ideal car CEO Li wants to post on Weibo that car companies will generally set a stable gross profit margin of 15%, 25%, or at worst 15%, when setting up a product project. The final real gross profit margin is much lower than the product planning goal for four reasons:

Sales are far below expectations (very high cost sharing of bicycles)

Market fluctuations in the cost of spare parts (such as the increase in battery prices caused by lithium carbonate)

A sharp reduction in prices caused by competition

There are too many shopping inside and outside.

The gross profit margin of the product is much lower than expected, and the gross profit margin fluctuates greatly, not because of the enterprise's pricing conscience, but because of the need to improve the operation and management of the enterprise, as well as to expand the scale continuously. After reaching a revenue scale of hundreds of billions of dollars, a gross profit margin of 15% and 25% of products is a benchmark requirement for a healthy auto company.

CTOnews.com with the original text of Li Xiang:

Ideal Motor announced its results for the first quarter of 2023 on May 10, with revenue of 18.79 billion yuan, an increase of 96.5% over the same period last year, and a gross profit margin of 20.4%. After deducting equity incentives, operating profit and net profit reached 890 million yuan and 1.41 billion yuan respectively, free cash flow reached 6.7 billion yuan; a total of 52584 new cars were delivered to users, an increase of 65.8 percent over the same period last year.

Ideal Motor expects to deliver 76000 to 81000 vehicles in the second quarter, up 164.9% to 182.4% year-on-year; total revenue is expected to be 24.22 billion yuan to 25.86 billion yuan, an increase of 177.4% to 196.1%.