Where is the difficulty of xiaomi car making?

Car manufacturing three questions "there is money to burn, there is factory property, someone to buy", every question, Xiaomi car can not give a definite answer.

Author/Barbara

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Produced/Newly Excerpted Business Review

Today is the 12th anniversary of the establishment of Xiaomi Group, but also from the Xiaomi official announcement of the car 372 days, from a small company of more than a dozen people to the scale of 10,000 people of the millet group, millet embarked on a new level, car building for millet is of great significance.

Since Xiaomi officially announced the construction of cars, there is a grand situation that it is difficult to find a ticket for car manufacturers, there are also xiaomi's initiative to "dig" people's actions, and there is speculation about the location of car factories in the outside world, and the heat of discussion has not decreased.

The financial report disclosed that the R&D team of Xiaomi car has exceeded 1,000 people, and the first car will be mass-produced in the first half of 2024. Xiaomi's engineering prototype will be unveiled in the third quarter of this year.

For 372 days, Lei Jun personally led the Xiaomi car, which step did it take?

First, when Xiaomi car manufacturing is carried out

75 days, 85 industry visits, in-depth exchanges of more than 200 automotive industry veterans, 4 internal management seminars, and 2 formal board meetings, this is the data given by Xiaomi when it officially announced the car in March last year.

"I am willing to put on all the accumulated achievements and reputations in my life and fight for Xiaomi cars." The outside world has seen that this time Lei Jun is 100% determined to build a car.

In fact, as early as Xiaomi's official announcement of the car, Lei Jun has already laid out in the field of smart cars.

In 15 years, Lei Jun participated in the A round of financing of Weilai Automobile, and in 16 and 19 years, Xiaomi invested in Xiaopeng Automobile twice, in addition to the ideal car in the three new domestic car-making forces, Xiaomi has established a connection with it.

In the eyes of the outside world, Xiaomi's car is not a surprise, after all, when Tesla launched the Model S, Lei Jun ordered two, one for his own use, and one was given to Yu Yongfu, the CEO of UC, who he participated in the investment. And Lei Jun also went to the United States to communicate with Musk, showing great interest in building cars.

The new domestic car-making forces have given the market a clear understanding of the matter of car-making, and "burning money" is a consensus, followed by talent and supply chain.

After building a car, the first thing Lei Jun did was to organize an automotive industry party, when He Xiaopeng of Xiaopeng Automobile, Li Bin of Weilai Automobile, Li Xiang of Ideal Automobile, the CEOs of these three new domestic car-making forces came to the scene, and some founders of traditional car companies also came to the scene, and the party lineup was very hardcore.

After that, Lei Jun visited the R&D and manufacturing centers of Dongfeng, Changan, Great Wall, GAC, SAIC and other traditional car companies, all in car manufacturing.

In order to fully lead the team to build cars, Lei Jun once withdrew from the legal representative, executive director or chairman of a number of affiliated companies and other important positions.

At the same time, Xiaomi actively recruited, in order to attract talents to offer a salary higher than 20%-30% of its peers, in just a few months of releasing recruitment needs, Xiaomi received more than 20,000 resumes, but only more than 300 people successfully entered the job.

"Digging people" is also a way for Xiaomi to recruit talents, hu Zhengnan, former president of Geely Research Institute, Yu Liguo, former president of Beiqi Jihu Automobile, and other senior people have joined the Xiaomi car-making plan, and some technicians and managers of Baidu and many head car companies have also flowed to Xiaomi.

Xiaomi also gathered 17 key members of the car-making team, including Li Tianyuan, the only exterior designer with a professional automotive industry background.

After 365 days, the Xiaomi car-making team has exceeded 1,000 people, and important positions are basically saturated, but the recruitment continues, which also means that the labor cost of Xiaomi car-making continues to rise.

Recruit people inside, cast a net outside. Whether it is investing in hardware companies such as chips, lidar, visual sensors, and three-electric systems, or investing in software providers such as automatic driving solutions, in-vehicle intelligent products, and smart cockpits, in the past year, Xiaomi has been frantically laying out its own car-making ecological chain.

In order to quickly fill the shortcomings in autonomous driving, Xiaomi not only invested in self-driving solution provider Zongmu Technology and Geometry Partners, but also acquired DeepMotion, a company focused on providing full-stack software solutions including sensing, positioning, planning and control for advanced driver assistance systems (ADAS) and autonomous driving applications.

It is worth mentioning that DeepMotion is the only company in Xiaomi's car-making ecological chain to reach in the form of mergers and acquisitions, because autonomous driving technology is the core of the smart car software part, and each company wants to firmly grasp this part of the ability in its own hands.

From the official announcement of the car to the present year, the location of the xiaomi car factory has also been determined from the initial circulation of Beijing, Shanghai, Wuhan and other cities, not next to the xiaomi science and technology park in Haidian, but in the xiaomi industrial park in Beijing Yizhuang.

Together with the site selection, there is also the launch time of the engineering prototype car, Luo Baojun, general manager of Xiaomi Jingjin Branch, said that in the third quarter of this year, it will definitely break everyone's imagination. A little farther away, the first half of 2024 will be the mass production time of Xiaomi cars.

Second, the team and schedule management "imbalance"

Zhou Wenxuan, senior engineer of Xiaopeng Automobile, said that the development cycle of a car from concept to SOP mass production is about 5 years, domestic independent brands can be shortened to less than 3 years, and Internet car manufacturing may take a shorter time.

Although Xiaomi car construction is very fast in the construction of talent teams, it is not fast in the progress of car building.

2024 and 2025 are generally considered to be a time threshold for smart electric vehicles, and 2024 is also the first mass production time of Xiaomi cars.

If you follow the initial time plan of Xiaomi car manufacturing, all the needs should be locked down at the end of 2021, and as of now this step is still not completed. The new schedule became that all requirements were to be confirmed at the beginning of the year. A person close to Xiaomi's car-making business line said in an interview with Leopard Change: "Judging from the current state, it is still impossible to confirm 100% completion as scheduled."

Baidu officially announced the car 28 days earlier than Xiaomi, but the actual progress was a big cut away from Xiaomi. Strategically, Baidu and Geely have chosen to jointly fund the establishment of Jidu Automobile, which plans to achieve mass production in 2023.

Jidu has officially announced the concept car renderings at the beginning of the year, and the new car will be officially unveiled at the Beijing Auto Show in April this year, while Xiaomi's engineering prototype was only released in the third quarter of this year.

With the improvement of the production capacity of new energy automobile enterprises, overcapacity is also a problem that cannot be ignored.

According to the Passenger Car Market Information Joint Committee and the Traffic Management Bureau of the Ministry of Public Security, by 2025, the mainland new energy vehicle market size will reach 5.3 million, but the production capacity can reach 36.61 million, the supply is far greater than the demand, in this case, the fierceness of competition can be seen, if Xiaomi wants to occupy a place, the pressure can be imagined.

Xiaomi, which entered the game late, not only lost its first-mover advantage, but also missed the dividend period of national policies.

According to the relevant policies of new energy vehicles this year, under the condition that the technical indicator threshold remains unchanged, the subsidy standard for new energy vehicles in 2022 will be reduced by 30% on the basis of 2021, and the purchase subsidy policy will also be terminated on December 31, 2022, and the vehicles on the plate will no longer be subsidized.

And last year's relevant policies pointed out that from January 1, 2021 to December 31, 2022, consumers will be exempt from vehicle purchase tax when purchasing new energy vehicles, and if this preferential policy is not continued, Xiaomi will miss more policy dividends.

Since the official announcement of millet car manufacturing last year, the Stock Price of Hong Kong stocks has continued to decline, in addition to the impact of xiaomi's mobile phone market share peaking, in fact, it also reflects the market's hesitant attitude towards xiaomi car manufacturing.

III. The "Three Mountains" that need to be crossed urgently

Before mass production, xiaomi cars also had a shortage of chip batteries, team run-in, and consumer minds occupied three mountains to cross.

Under the epidemic, chip production capacity declined, the car market recovered faster than expected, and the demand for chips for new energy vehicles increased, resulting in a chip shortage last year. Not only do traditional fuel vehicles reduce production, but new energy vehicles need more chips to support their intelligent modules, so they are more affected.

According to incomplete statistics, as of August 21, Xiaomi has invested in a total of 8 domestic chip companies, except for BYD Semiconductor, which ranks at the top of the industry, and the rest do not have much competitiveness in the industry.

The current situation is that the chips of domestic car companies rely heavily on European and American companies, because the products of foreign suppliers are relatively more reliable, and the field of domestic substitution is very limited. For Xiaomi, chips are a very tricky problem.

In addition to the chip shortage, battery shortage is also a problem that Xiaomi needs to face. It can be seen that Xiaomi tries to alleviate the problem of battery shortage by investing in battery suppliers such as Zhuhai Guanyu, AVIC Lithium Battery, Ganfeng Lithium Battery, and Honeycomb Energy, but it is also "a symptom but not a cure".

Because the production capacity of power batteries cannot keep up with the growth rate of energy vehicles, although Ningde Times, Honeycomb Energy, AVIC Lithium Battery and other companies have announced expansion plans, they cannot fundamentally eliminate the crisis of battery shortage in recent years.

And for new energy vehicles, the maximum mileage is also one of the core competitive factors, and the farthest mileage of new energy vehicles is the ternary lithium battery with the highest energy density, but the resources such as cobalt and nickel required for ternary lithium batteries are becoming more and more scarce and expensive, and there is no mature alternative at present.

By the time Xiaomi mass-produced, how to stand out among many strong players and get a ticket for a battery supplier is still in the air.

If the chip shortage, battery shortage is the pain point of the entire industry, then the internal team run-in is a point that Xiaomi needs to consider in particular, the current xiaomi car team size of more than 1,000 people, these employees mainly come from Xiaomi's internal transfer employees, Internet factory job-hopping personnel, new car-making forces and traditional car companies.

Not to mention the time it takes for employees to adapt to the new work environment, it is the most time-consuming for employees from different backgrounds to run into each other.

Sixteen of the 17 core executives in the car-making team are from xiaomi, all of whom have no experience in the automotive industry, and the only one with a car company background is only the exterior designer, and does not involve the core technology of car manufacturing.

In addition, Lei Jun, as the leader of Xiaomi's car, is not a few things decided by him, but after all, the current mobile phone business is still the main body of Xiaomi, Lei Jun has to put part of his time and energy into this piece, and the pull between mobile phones and automobile business is bound to delay the progress of car manufacturing.

In the past, Xiaomi relied on hunger marketing and high cost performance to kill a piece of the mobile phone market, but daily consumer goods are different from large-scale consumption, and the use of cars is more complex than mobile phones, which also determines that consumers consider more factors when buying cars, and safety is one of the most important ones. Some netizens said that although Xiaomi mobile phones have the defect of easy to crash, but a restart can be solved, but if the car crashes on the road, it is not just a simple restart, and even life is dangerous.

Secondly, the high-end positioning of xiaomi car owners is also different from consumer cognition, according to a small survey launched by Lei Jun on Weibo, the number of netizens accepted in the price range of less than 100,000 is the largest, which has a certain deviation from the pricing of Xiaomi car 100,000-300,000 yuan.

Not long ago, after the announcement of Xiaomi's 2021 financial report, the official announcement was to repurchase shares in the open market with an irregular maximum total of HK$10 billion, both to return to shareholders, for its own development and to expand new new businesses, Xiaomi's self-financing to maintain the stock price can be seen as the management's optimism about the development prospects of the enterprise, and may also be to stabilize the confidence of the outside world.

Regardless of the final success of Xiaomi's car-making, it cannot be denied that this trip to the car-making, which is regarded by Lei Jun as the last entrepreneurial business, has satisfied the appetite of the media and young people, as to whether young people can really support Xiaomi-made mobile phones like the previous rice noodles, it will be waited for the day of real mass production.