People in the matter: Xiaomi is still far from getting the car manufacturing qualification

According to market news, Xiaomi Automobile is close to obtaining the production qualification of new energy vehicles.

In this regard, the Securities Times reporter asked an informed person who is very familiar with Xiaomi, and the other party said, "If you don't get the car building qualification, you can't get it right away." ”

In March 2021, Lei Jun announced at Xiaomi's spring new product launch that he would officially enter the field of electric vehicles, and said, "This is the last major entrepreneurial project in my life, and I am willing to bet on all my reputation in life to personally lead the team and fight for Xiaomi Auto." ”

However, more than two years have passed, Xiaomi's car development progress is not as expected, and the group level is also silent about the progress of car manufacturing. Coupled with the decline of the three main businesses supported by Xiaomi Group, Xiaomi's dream of building a car is even more misty. At present, crossover car builders are succeeding, and there seems to be not much time left for Xiaomi.

Xiaomi will get the car manufacturing qualification?

It is reported that Xiaomi Automobile is close to obtaining the new energy vehicle production qualification.

In this regard, the reporter asked the public relations department of Xiaomi Group for verification, but the other party said that it would not comment on the car manufacturing business.

But an insider who is very familiar with Xiaomi told reporters, "At present, it seems that it is unlikely, and it is not a day or two to build a car, it can be achieved in a year or two, and it is still far from getting the qualification." ”

It is reported that on February 9, Lei Jun mentioned the future goal of Xiaomi car manufacturing at the Xiaomi Investor Day: to strive to enter the world's top five in 15-20 years. Regarding the question of whether the car is too late, Lei Jun said that the car is a century-old track, as long as you are optimistic about the automobile industry, it is never too late.

In the book "Xiaomi Entrepreneurial Thinking", Lei Jun frankly said that the future revenue of electric vehicles will be composed of hardware, software and various car services. In the era of intelligent electric vehicles, the core of the automotive industry will shift from "machinery industry" to "information industry" and "consumer electronics".

This conclusion points to a key question: What is the end point for this industry?

Lei Jun said that if smart electric vehicles are "consumer electronics", then they will inevitably follow the laws of the consumer electronics industry, and by 15-20 years later, they will enter a mature period, and the world's top five brands will hold more than 80% of the share. In other words, it only makes sense to eventually enter the top 5 of the global industry and ship more than 10 million units per year.

Does Xiaomi have a chance to win one of the 5 "ultimate tickets" in the future?

Lei Jun said that Xiaomi has tens of millions of loyal fans and users in China, and as long as 1% of them are willing to give Xiaomi a chance, Xiaomi cars can get a fantastic start. Electric vehicles are just getting started, and there are plenty of opportunities.

However, since Xiaomi announced the car, although it has been huge, the progress has not been smooth. In April 2022, Xiaomi Yizhuang factory officially started, the first phase of the project includes 4 factories, the annual production capacity is expected to be 150,000 vehicles, with the factory, the next step may be to acquire or apply for qualifications. Previously, it was reported that Xiaomi and BAIC negotiated to acquire factories and licenses to complete the acquisition of car manufacturing qualifications, but in the end, it was not done. In October last year, it was also caught in rumors of being stopped, and although Xiaomi subsequently claimed that "the car project is progressing smoothly", it still could not dispel the doubts of the outside world.

As a cross-border new force, Xiaomi does not have the production qualifications of traditional car companies, and this problem has also caused problems for many new car companies. The solution is roughly divided into three types: OEM production, acquisition qualification, and application qualification. These three ways, OEM production has always handed over the autonomy of car manufacturing to the foundry factory, product quality, production cost and even supply chain management lack of right to speak, Xpeng Motors previously chose the OEM model, found that it could not work, and finally chose to acquire qualifications and build its own factory, which has become the final destination of most of the new forces of car manufacturing, and Xiaomi is no exception.

However, neither acquisition nor qualification application is a good way to go. With the tightening of the regulatory authorities' review of electric vehicle production licenses, in order to obtain a license, it is necessary to meet the requirements of "shareholders have strong control over key components, and have intellectual property rights and production capacity for key components such as vehicle control systems, drive motors, and vehicle-powered trams". And Xiaomi is not yet able to do it.

At present, Xiaomi has not seized the market opportunity. Nowadays, the competition between the "new forces" of domestic car manufacturing has become intense, and there are many cutting-edge brands such as Xiaopeng, NIO, and Ideal, which are well-known, as well as many cutting-edge brands such as Nezha, Zerorun and Avita, while traditional car companies such as BYD, Geely and Great Wall are also accelerating the pace of new energy transformation.

Xiaomi's main business declined for three consecutive quarters

At the beginning of 2023, Lei Jun frankly said in a letter to all employees of the group: 2023 is a year for Xiaomi to start a new development cycle, and it is also the time when the profound changes of the series enter the deep water area, and the group is at the starting line of a new stage.

According to the Q3 financial report of 2022, the revenue in the quarter was 70.5 billion yuan, down 9.7% year-on-year, and the revenue in the Q2 quarter was 70.2 billion yuan. It fell 20% year-on-year, and Q1 revenue was 73.4 billion yuan, down 4.6% year-on-year, which is the first time that Xiaomi's operating income has declined for three consecutive quarters. Q3 adjusted net profit was 2.117 billion yuan, down 59.1% year-on-year.

In particular, smartphone revenue in Q3 2022 was RMB42.5 billion, down 11.1% year-on-year, mainly due to the decline in smartphone shipments and ASP, and smartphone shipments decreased by 8.4% from 43.9 million units in the third quarter of 2021 to 40.2 million units in the third quarter of 2022, mainly affected by the global macroeconomic environment.

IoT and consumer products revenue decreased 9% year-on-year to RMB19.1 billion and Internet services revenue decreased 3.7% year-on-year to RMB7.1 billion, mainly due to lower revenue from fintech and advertising businesses.

In addition, Xiaomi's profitability level is also declining, and the 2022 Q3 financial report data shows that the overall gross profit margin fell to 16.6% year-on-year, of which the smartphone gross margin fell from 12.8% to 8.9%.

At the same time, Xiaomi is still continuing to invest in the car manufacturing business. In the third quarter of last year, Xiaomi Group's R&D expenditure soared to 4.1 billion yuan from 3.2 billion yuan in the same period of the previous year, an increase of 25.7% year-on-year. According to Wang Xiang, president of the group, in the first three quarters of 2022, Xiaomi's total investment in car manufacturing reached 1.865 billion yuan, of which the expenditure on innovative businesses such as smart cars reached 829 million yuan in the third quarter.

Responsible editor: Zhu Yumeng

Proofreader: Wang Jincheng