LI was blasted for "issuing an 8-month year-end award". Insiders: Not so much on average.


LI was blasted for "issuing an 8-month year-end award". Insiders: Not so much on average.

Image source: LI

When it comes to year-end awards, the nerves of migrant workers will be extremely sensitive. The year-end awards offered by big factories are envied by ordinary workers, but they are far behind.

At the beginning of 2023, LI was accused that he only studied Huawei’s wolf culture in enterprise management, but didn’t see any dividend mechanism in employee rewards. But at the beginning of 2024, LI fulfilled his promise to learn from Huawei in an all-round way.

Recently, the news that "LI issued a year-end bonus of 4-8 months" and "Huawei paid out a dividend of 77 billion yuan" both rushed to Weibo for hot search, admiring a group of migrant workers for a time.

After all, in this year, the year-end "red envelopes" that can receive 1-2 months are a minority, and it is common to have none. Therefore, when Huawei and LI came out to hand out the year-end bonus in a big way, it caused widespread concern and discussion inside and outside the circle.

Regarding LI’s big year-end bonus, Li Xiang, founder and CEO of LI, said, "We can’t just learn Huawei’s process, but not Huawei’s profit distribution".

In Li Xiang’s view, if the target is exceeded in 2023, more bonuses will be given, and if the target is not achieved in 2022, less bonuses will be given, so that rewards and punishments will be clear. Only learning the advanced process, not learning the advanced benefit distribution, and unclear rewards and punishments are the biggest reasons for the inefficiency of the organization, simply tossing employees. Growth, achievement and reward are indispensable.

Screenshot from Ideal Weibo

Screenshot from Li Xiang Weibo

As an ideal learning object, Huawei lavished 77 billion yuan on year-end awards this year, benefiting at least 140,000 people, with a per capita dividend of over 500,000. What is the concept of 77 billion? The data shows that Huawei’s net profit in the first three quarters of this year was 73.056 billion yuan. In other words, Huawei is equivalent to distributing all the net profits of more than 9 months to the participating employees.

What is the ideal year-end bonus?

According to a poll of 615 people in the ideal community, among the votes that are known to give out the year-end bonus for several months, 97 people voted for the year-end bonus for more than five months. Followed by 4-5 months of voting, with 36 people. There are even people who are certified as ideal employees, saying that Ideal has issued an eight-month year-end bonus this year.

However, it is understood that people familiar with the matter in LI told Titanium Media App that the average employee is not as much as eight months, but it is definitely more than last year. It said that LI has issued a notice that employees are not allowed to disclose their year-end bonuses, including discussions among colleagues.

According to the pulse community users who are certified as ideal employees, this year’s year-end bonus in LI is generally between 4 and 8 months, with 4 months of normal performance and 8 months of better performance. Another ideal employee said that in LI’s performance appraisal standard, one M corresponds to two months, and two M’s a year is four months.

Overall, LI’s year-end bonus is more among automobile manufacturers. In contrast, traditional car companies such as GAC, SAIC and Geely generally have year-end awards of 1-2 months, and some are even lower. One user said that Geely Ningbo Research Institute only issued 5,000 year-end awards this year, while another user said that "Guangqi Honda is even worse".

This year, LI issued a large year-end bonus, which was mainly related to its outstanding performance.

In 2023, LI delivered 376,000 new cars, a year-on-year increase of 182.2%. The sales volume ranks first among the new forces, and it is also the first new force with an annual sales volume of more than 300,000 vehicles. In comparison, Weilai, which ranked second in sales volume in 2023, delivered only 160,000 vehicles, less than half of LI.

The continuous increase in sales volume, combined with factors such as the average selling price of vehicles exceeding 300,000, has boosted the performance of LI. According to the latest financial data, LI’s revenue in the third quarter (July-September) was 34.68 billion yuan, a year-on-year increase of 271.2%. Among them, the net profit reached 2.81 billion yuan, an increase of 21.8% from the previous month, and it achieved profitability for four consecutive quarters.

LI will announce its fourth quarter and annual results on February 26th. According to the forecast, LI’s revenue in the fourth quarter will reach 38.46 billion yuan to 39.38 billion yuan, up 117.9% to 123.1% year-on-year.

As of September 30th, the cumulative revenue of LI in 2023 has reached 82.12 billion yuan. If the revenue in the fourth quarter meets expectations, it means that its annual revenue will exceed 100 billion, becoming the first new force with revenue exceeding 100 billion.

Looking forward to 2024, the core goal of LI is to achieve the annual sales target of 800,000 vehicles. If successful, LI is expected to be the top luxury car brand champion in China. In contrast, BBA (Mercedes-Benz, BMW, Audi), which dominated the luxury market all the year round, sold 765,000 vehicles, 825,000 vehicles and 729,000 vehicles in China in 2023, with year-on-year growth rates of 1.7%, 4.2% and 13.5% respectively.

In order to support the annual target, LI will embark on a massive expansion of Zhang Zhilu, new product lineup and offline sales channels in 2024.

2024 is an unprecedented product year in LI, with a total of 8 new cars coming on the market, including 3 modified models and 5 brand-new models. Among them, the current models L7/L8/L9 are expected to be upgraded in March; In April, a full-extended-range vehicle, the Ideal L6, will be added. The price of this vehicle is expected to be between 200,000 and 300,000, which is considered as the key vehicle to hit the annual sales target.

In addition, LI will launch four brand-new pure electric vehicles this year, including the ideal MEGA of pure electric MPV, which has been confirmed to be launched in March, and three other brand-new pure electric vehicles to be launched in the second half of the year. By 2025, LI’s product lineup will form a layout of "1 super flagship model +5 extended-range electric vehicles +5 high-voltage pure electric vehicles".

LI’s flagship retail center has recently opened in the north, Guangzhou and Shenzhen. This is a signal that LI will expand its offline sales channels in 2024. According to the plan, LI will add more than 330 direct stores this year, aiming to expand the coverage of offline channels to all cities including fifth-tier cities. By then, the number of retail centers in LI will increase to 800, which will match the number of BBA’s sales outlets in China.

However, under the surface of the ideal aggressive sales target and expansion strategy, there are also hidden danger signals.

The first is whether the sales volume can maintain a high growth trend. In January this year, the sales of nearly 33,000 vehicles in the sector became the champion of the new forces for the first time, while LI was the runner-up with 31,000 vehicles. Since last December, when the station sold a high of 50,000 vehicles last month, LI failed to maintain the growth momentum of the previous month. Whether the new forces can regain the title in the next February is an important node for the outside world to re-evaluate LI.

In the high-pressure environment of repeated bombardments by competitors and continuous squeezing of the incremental market of the industry, it is a great pressure for LI to achieve more than 100% growth in 2024.

Secondly, can pure electric vehicles be recognized? The delayed listing of the ideal MEGA made LI, who entered the pure electric track for the first time, attract a lot of doubts. Faced with the double pressure of the layout being later than the competitors and the extremely crowded industry, it is difficult for LI to replicate the success of the extended-range track on the pure electric track.

Under the influence of various factors, LI broke out the "eight-month year-end bonus" at such a special time node, and was once again discussed with Huawei, which not only boosted morale, but also released the momentum of LI’s "far ahead" to the industry and attracted more talents to join.

For LI, which wants to expand greatly in 2024, the significance of the year-end bonus far exceeds the meaning of the "year-end bonus" itself. This wave of popularity is a good publicity for its brand exposure and reputation.

In 2024, almost everyone said, "It’s harder and more complicated". Even though there are layoffs in the industry from time to time, we still have to believe that "when God closes a door, he will definitely open a window for you." For example, enterprises represented by LI and Huawei are still expanding against the trend, speeding up their development, and awarding large amounts of year-end bonuses.

How much did the year-end awards go to the migrant workers around you?


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