The internal differences of "Wei Xiaoli" first appeared: Weilai and Xiaopeng scoffed at the ideal of self-driving subscription service.

As the last of the three new car-building forces listed in the United States to release results for the first quarter of this year, although the ideal car, like Ulai and Xiaopeng, still maintains a momentum of rapid growth, there are obvious differences with the latter in terms of software subscription services.

"the new ideal ONE autopilot is standard, and the ideal will not charge for autopilot in the future." Li Xiang, founder, chairman and CEO of ideal Automobile, made a clear statement about the future of the ideal car software subscription service at the investor conference call after the release of the first quarterly report of 2021 on May 26th. "Autopilot is a safety feature that will not be optional and will not have a subscription function."

The ideal statement is quite different from that of Weilai and Xiaopeng.

"self-driving services are more suitable for on-demand subscription. Once autopilot becomes popular and becomes standard, other payment models will also be introduced, such as flow fees, in-car experience fees, such as movies, advertising fees, and so on." Mei Songlin, an expert in the automobile industry, said.

Software subscription service, "booster" for the increase of gross profit margin of vehicle sales

Different from Li Xiang's attitude, Li Bin, founder and chairman of Xilai Automobile, has a special preference for self-driving subscription service.

"to put it simply, I think the AD as a Service (ADaaS) approach will charge more than the current Take rate, which makes it possible for a car to have revenue throughout its life cycle and be more user-friendly." At the earnings call for the fourth quarter of 2020 on March 2 this year, Li Bin interpreted the business prospect of creating the first monthly service subscription model on Wei Automated driving system NAD (NIO Autonomous Driving). In its view, charging for NAD service subscriptions is "a more sustainable model".

Coincidentally, in this year's quarterly report, Xiaopeng also said that "the monetization of XPILOT software will become a recurrent income and a part of vehicle sales revenue."

The huge differentiation of software subscription services within "Wei Xiaoli" is directly reflected in the gross profit margin of vehicle sales, which reflects the profitability of bicycles.

According to the data, the gross profit margin of ideal car sales in the first quarter of this year is 16.9%, which is basically the same as the fourth quarter of last year, and up 100% from the first quarter of 2020. However, compared with the gross profit margin of car sales for four consecutive quarters and Xiaopeng's for three consecutive quarters, the ideal has fluctuated over the past five quarters.

"there are many factors that affect the gross profit margin of vehicle sales, but under the premise that there is little difference in volume and not much difference in hardware procurement costs, the key factor that determines the gross profit margin of vehicle sales lies in the 'value-added' part of software subscription services." Some industry insiders believe that.

Xiaopeng's first quarterly report in 2021 revealed its revenue from the automotive software business for the first time: revenue from its autopilot system XPILOT3.0 software package was 50 million yuan in 2020, compared with 30 million yuan in the first quarter of this year, more than half of last year's annual revenue.

Although data are not yet available, Li Bin admits that ADaaS's revenue will indeed be one of the sources of gross profit for Lulai.

In January this year, Weilai announced on NIO Day that the new car ET7, which is equipped with self-driving system NAD,NAD, includes 19 safety and driving assistance functions. Its full function adopts the service subscription mode of "opening on a monthly basis and paying a monthly fee". Consumers will subscribe to the service on a monthly basis with a monthly payment of 680 yuan.

According to this calculation, for every car sold that subscribes to the service for five years, Weilai will receive 40800 yuan. According to the 43728 car sales achieved by Xilai in 2020, it will generate 357 million yuan in revenue based on 20% of car owners subscribing to the service over the past five years.

Not only Weilai and Xiaopeng, Tesla also regard software subscription service as the company's main source of income. According to the financial report, as of the first quarter of this year, Tesla's deferred income related to Internet connection and fully autopilot functions as well as air software updates was $2 billion (about 12.86 billion yuan). According to previous news, Tesla earned more than $1 billion (about 6.43 billion yuan) by selling FSD suites as early as 2019.

Give up Mobileye, switch to the horizon, the ideal "lost sheep to mend"?

The ideal obviously saw this, but Li Xiang still chose to stick to it stubbornly.

"even if it has an impact on finance, it will not be done." Li Xiang believes that apart from autopilot, there are many growth points in the entertainment facilities and supporting functions of the intelligent cockpit in the ecology, but autopilot is the bottom and most important system of intelligent electric vehicles. "everyone's understanding is different."

In February this year, ideal launched the ideal ONE's co-driver entertainment screen karaoke function through OTA. After connecting the official car microphone, you can achieve multi-person Sing in the car, increasing the vehicle entertainment attribute. According to the information disclosed in the conference call after the first-quarter results, ideal officials launched 2000 car microphones that were lit up as soon as they were launched. After the addition of hardware during the May Day holiday this year, the car karaoke function is used more often than the Spring Festival.

Obviously, Li Xiang's logic is that the software system is not charged, but the impact of autopilot subscription services on financial statements can be "made up" through surrounding products and services, especially the increasingly rich scenarios in the smart cockpit. "what we are building is a 'mobile home', which is definitely in need of software services."

"the ideal logic is not wrong, but that doesn't mean the two are opposed to each other (autopilot subscription services and non-autopilot software, including entertainment systems)." In the view of the aforementioned industry, the main reason for the ideal to make the current choice is that it lags behind its main competitors' self-driving function. "We do not rule out the possibility that the ideal will return to autopilot subscription service after making up for this deficiency."

"compared with Tesla and Xiaopeng in autopilot, we need to make up lessons." Li Xiang frankly admitted the gap with his competitors. "We used to use the 'black box' algorithm, but now we first catch up with their abilities (Tesla and Xiaopeng). This is the first phased goal."

By "black box", Li Xiang refers to the Eye Q4 driving assistance chip provided by Mobileye, which is included in the 2020 ideal ONE. As a system integrator, Mobileye not only provides the core hardware, but also "packages" the matching system software. This made Li Xiang unhappy.

"We know that there are some things that can be changed, but because of the way he is a 'black box', we can't change it even if we see it." Li wants to complain.

The difficult partnership led directly to the breakup between ideal and Mobileye and turned to the horizon-the 2021 ideal ONE, launched the day before the quarterly report was released using two Horizon "Journey @ 3" autopilot chips and upgraded the NOA navigation assistance system.

In fact, as early as last September, Wang Kai, the global chief architect of Visteon, who had just joined the ideal, said frankly, "in the initial stage of car construction, it is easy for the product to be successfully landed and delivered, and the ideal car chose a mature software and hardware solution at that time. After the arrival of mature products, the ideal car is more concerned with the long-term development of intelligent driving. "

Wang Kai believes that ideal cars did not participate enough when they adopted the Mobileye scheme before, and will develop their own self-driving in the future to reduce their dependence on suppliers.

According to the plan, the ideal new car with Nvidia Orin chip will be launched in 2022 and gradually achieve L4 self-driving.

"now there is no way to make such a long-term vision, because we have only more than 50,000 vehicles, and it is too early to talk about the revenue from these software subscriptions." Combined with Li Xiang's response to the future of the software subscription service, is the ideal car that is making every effort to enhance the self-driving ability of self-research? is it "mending after a sheep is lost"?