Since the announcement of the car-making plan, Xiaomi CEO Lei Jun has visited a number of domestic car companies and recruited a large number of professionals in the field. More than a month ago, Lei Jun said on the Investor Day that the development progress of Xiaomi cars far exceeded his expectations and expected that the first Xiaomi cars would be mass-produced in the first half of 2024.
In terms of time span, Xiaomi announced the construction of cars in 2021 and plans to mass-produce the first model in 2024, if the plan can be promoted as scheduled, Xiaomi's car speed and "Wei Xiaoli" have a fight. A few weeks ago, Xiaomi announced that xiaomi automobile headquarters and factory will be located in Yizhuang, Beijing, and will build a vehicle manufacturing plant with an annual production capacity of 300,000 vehicles in two phases. Xiaomi's car-making speed is not fast, and the project is much smoother than apple's car-making plan next door.
On December 13, according to the report of 36Kr, xiaomi group in addition to xiaomi car, its ecological chain enterprise Zhimi Technology has also joined the car-making army, has been a number of industry leaders to join, including the former GM Pan Asian electric vehicle project leader Ma Yongdong, as well as a lot of electronic and electrical architecture personnel from BAIC, and there are currently automotive design companies and Zhimi contact, mainly docking vehicle design related work. So what role will Zhimi play in Xiaomi's car-making plan, and will Xiaomi's two-line car-making route work?
"Xiaomi Mode" in Xiaomi cars
In the article "Lei Jun: Some Of My Thoughts Before and After The Founding of Xiaomi", Lei Jun said that in the process of entrepreneurship, Xiaomi has continued to evolve, and the most prominent things are to create a Xiaomi ecological chain model, build the world's largest AIoT platform and fully invest in AI. Today, the Xiaomi ecological chain has become one of Xiaomi's dominant businesses, and in the third quarter of 2021, the revenue of the AIoT business accounted for 26.8% of the total revenue, second only to the mobile phone business.
Zhimi is a member of the Xiaomi ecological chain enterprises, has launched Xiaomi air purifiers and Zhimi electric heaters and other products, in the rice ecological chain of many enterprises, xiaomi chose Zhimi to join the ranks of car manufacturing, the most important factor may be that Xiaomi has actual control over Zhimi (the holding ratio is more than 90%), rather than the ordinary low proportion of equity investment enterprises.
Secondly, Lei Jun previously mentioned the advantages of Xiaomi car manufacturing, Xiaomi model, Xiaomi brand and user, and full intelligent ecology are the three major advantages of Xiaomi car manufacturing, of which the first and third points are related to Xiaomi ecological chain enterprises. However, before the news of zhimi car manufacturing xiaomi broke, the speculation on the participation of rice-based enterprises in car manufacturing only stayed at the level of "parts supply", rather than personally laying out the car.
Obviously, Xiaomi wants to bring its own development of smart phones and AIoT ideas to the car manufacturing industry, combined with the rapid development progress of Xiaomi car manufacturing, it will be found that Xiaomi wants to rely on differentiated play and speed to impact the new energy vehicle market.
Now different from the past, "Wei Xiaoli" has seized the market development outlet when making cars, and in recent years, major traditional car companies have also turned around to develop new energy vehicle business, the so-called one step slow step, Xiaomi does not want to let itself fall into too much passive situation because of time problems.
2024 is not long, but the sales growth rate of the three "Wei Xiaoli" in November this year reached three digits year-on-year, and the monthly sales have exceeded 10,000, of which Xiaopeng has the highest sales volume, reaching 15631 vehicles. According to the data of the China Automobile Association, the market penetration rate of China's new energy passenger cars in November was 19.5%, if judged by the innovation diffusion curve of Rogers, the market penetration rate of an innovation will usher in a spurt of development when it reaches a certain critical point (13.5%-20%), and by 2024, when Xiaomi cars are mass-produced, how much space can the market leave for Xiaomi?
At the beginning of the article, it was mentioned that xiaomi's factory capacity in Beijing Yizhuang was 300,000 cars per year, which was already too much for a new car-making company, and as a comparison, the ideal prospectus showed that the ideal Changzhou base production capacity that could be used at that time was only 100,000 vehicles. Xiaomi's self-built factory and the layout of Zhimi have a development strategy of Xiaomi's use of red rice series mobile phones to rush sales, as far as possible to occupy enough markets with cost-effective products first, and then rely on the market share of terminal products to react to the supply chain, reduce costs while obtaining the exclusive right to certain supply chain technologies, and the arrival of Zhimi may carry the heavy responsibility of Xiaomi car sales.
Xiaomi makes cars, but also to reproduce the "red rice mode"?
Car manufacturing and mobile phone manufacturing are hugely different, unless you take the asset-light development route, using third-party companies' car platforms and foundries, such as Baidu using Geely SEA Haohan architecture to build cars, otherwise you can only personally go down to build cars, relying on technology development and investment in the industrial chain to obtain car-making resources, Xiaomi car manufacturing is taking the road of heavy assets.
Judging by the timeline, according to the general automobile research and development standards, it takes 6 years for traditional automakers to develop a new car, and it also takes 3 to 4 years for the development of new energy vehicles under the platform, Geely's SEA architecture has spent 4 years for research and development, and when Xiaomi cars are mass-produced in 2024, Zhimi can rely on the architecture of Xiaomi automobiles for product development and shorten the time to market of new cars.
In terms of cost, the addition of Zhimi can evenly share xiaomi's research and development costs. Car manufacturing also belongs to the money-burning industry, only in the platform architecture, Volkswagen MEB architecture spent 7 billion euros (about 50 billion yuan), Geely SEA architecture spent 18 billion yuan, the high platform architecture research and development costs need to be reasonably shared. Xiaomi car manufacturing plan of 10 years 10 billion US dollars and the first phase of 10 billion yuan investment is not much, the arrival of Zhimi can share a part of the research and development costs, the early development strategy of the two models is also the usual practice of the new forces of car manufacturing.
Taking the Xiaopeng P5 and G3 as an example, the two models are built on the same platform, the former is a sedan and the latter is an SUV, and the P5 is slightly more expensive than the G3 in terms of price. According to 36Kr's report, like most new car-making forces, Zhimi's first car is also an SUV model, which is in line with the user preferences of the domestic automobile market.
On the other hand, the two-line layout of Xiaomi cars may be related to the brand building of Xiaomi cars. In 2011, Xiaomi released the Xiaomi mobile phone 1 with a starting price of 1999 yuan, relying on cost performance to tear open the market gap, but since then it has also saddled the cost-effective label, which has affected the high-end exploration of Xiaomi mobile phones.
Xiao Lei believes that considering the market of Xiaomi's user base, the pricing of the first electric vehicle of the Xiaomi brand will not be too high, but it will not focus on "extreme cost performance" at the beginning, and may set the price range at about 150,000 to 220,000 yuan, paving the way for other flagship models with higher prices in the future. As for the low-cost model handed over to Zhimi Automobile, similar to the market positioning of Nezha Automobile, the development of models with a starting price of 60,000 to 100,000 yuan has become the first smart electric SUV for young people.
Compared with the same type of products as Nezha Automobile, the main advantage of Zhimi is that in terms of brand and ecological interconnection, Zhimi can be directly divided into sub-brands of Xiaomi Automobile, such as the relationship between Xiaomi and Redmi, and can also continue to exist in the form of rice ecological chain products, becoming a major branch in the Xiaomi automobile product system. In the third quarter of this year, MIUI global monthly active exceeded 500 million, Zhimi at least in the target user base and MIUI ecological linkage has a certain advantage, aiming at some low-cost electric vehicle models with poor intelligence of the weak underbelly.
In order to advance the layout, Xiaomi has invested in a number of automotive technology companies including batteries, motors and sensors, including AVIC Lithium Battery, Aoyx and Black Sesame Intelligent Technology, etc. Although most of the parts and components of Zhimi can be shared with Xiaomi, but considering the initial production capacity and production costs, It is not easy for Zhimi to play cost-effective in the development of low-cost electric vehicles, and it is necessary to bear greater cost pressure.
Referring to Nezha's model, the 76,900 yuan Nezha V7 Pro has a working range of 401 kilometers and L2 level intelligent auxiliary driving. Zhimi wants to make a breakthrough in the low-price range, can only compete with them hard, and as a latecomer in the market, Zhimi needs the highlights to attract users and provide more eye-catching configurations, such as longer mileage and L2+ level intelligent assisted driving.
With both prongs, Lei Jun is determined to win
For Xiaomi's two-line car-making layout, there are not many objects to refer to in the industry at present, most of the new brands that enter the game will not pour too many resources in the early stage for risk control considerations, and car-making is only prudent, such as launching a single model to test the market, or even accumulating technology first, and then considering the product offline.
There is no doubt that if Xiaomi's Zhimi joins the car-making army and forms a double line with Xiaomi's car, it will inevitably be an almost "crazy" high-risk investment. From the side, Lei Jun has full confidence in this "last big project of life", and Xiaomi not only wants to re-inject cars, but even "All-in".
However, compared with Xiaomi, Zhimi's brand influence and market awareness are lower, even if Xiaomi itself makes a car, it cannot guarantee that it can persuade consumers to pay for it at the first time, and Zhimi, which has a lower sense of popularity and presence, has a more suspicious performance. Personally, I believe that after the landing of the car-making project, Zhimi's auto products can be renamed or even deeply bound to Xiaomi products to enhance market awareness. More importantly, Xiaomi may decentralize some technical capabilities in the field of car manufacturing, and use the simplest and crudest "cost-effective" means to enhance the product strength of Zhimi Automobile, thereby forming a word-of-mouth effect and accelerating the original accumulation of market reputation.
The so-called high-risk and high-yield, there are many uncertainties in Xiaomi's car-making plan under the two-line strategy, but it is undeniable that once successful, Xiaomi and its sub-brands will have the opportunity to quickly jump up beyond imagination and narrow the gap between xiaomi and first-line brands.
However, all this is based on the premise of "Zhimi really wants to build a car", Lei Jun has never been an adventurous person, so in the end, this "gamble" is not established. But we can be sure that Lei Jun will push forward the car-making project with the greatest effort, which may be one of the greatest projects of the Xiaomi Group, not only determining the height to which Xiaomi can go, but also determining the length of the "Achievements" chapter in Lei Jun's possible future autobiography.