Text/paper is silent
A few days ago, at the first batch of Xiaomi SU7 delivery ceremony, Lei Jun revealed that in just a few days after Xiaomi SU7 went on sale, there were more than 100,000 people and more than 40,000 orders.
Within 24 hours of its launch, the Xiaomi SU7 broke the industry record with 89,000 pre-orders. Orders for the Xiaomi SU7 Standard, MAX and Pro versions were evenly distributed, and the sales volume and average selling price potential exceeded expectations.
This heat has been transmitted to Wall Street.
On April 1, Goldman Sachs released a research report, raising the target share price of Xiaomi Group from HK$18.9 to HK$20, and at the same time raising its revenue forecast for 2024 to 2026, with an increase of 2% to 6%.
Goldman Sachs noted that the Xiaomi SU7 has shown the potential to become one of the best-selling high-end electric sedans in China, which currently includes the Tesla Model 3, thanks to its industry-leading intelligent systems and ecological advantages. The SU7 is expected to become one of the top three high-end sedan models in China, with an average monthly sales of more than 10,000 units and an average retail price of 250,000 yuan. Goldman Sachs also expects Xiaomi Auto to be profitable in 2028.
Previously, for Xiaomi's decision to build a car, there were endless voices of decline and doubts in the industry.
The ups and downs of the car market for three years
On March 30, 2021, Xiaomi Group announced the official establishment of Xiaomi's smart car business. In the evening, Lei Jun, founder, chairman and CEO of Xiaomi Group, announced that Xiaomi will establish a wholly-owned smart electric vehicle subsidiary, which is expected to invest 10 billion US dollars in 10 years, with an initial investment of 10 billion yuan. He will personally lead the team and will also serve as CEO of the Smart Electric Vehicle business.
At that time, the domestic new energy vehicle market already had BYD, Tesla and other leading forces, "Wei Xiaoli" and other new car-making forces involved, Xiaomi was already a late entrant. In addition, Xiaomi's car manufacturing is a cross-border behavior, and it lacks the supply chain and core technology experience of car manufacturing, so many parties in the industry are not optimistic. In order to successfully achieve the goal of the car plan to be listed, Xiaomi has adopted a resource integration policy and touched friends to "cross the river" in exchange for technology and time.
Source: Qianzhan Network
As a "latecomer", Xiaomi learned the lessons of the industry, abandoned the obvious disadvantages of OEM cars in product quality control and supply chain supply, and chose to embark on the road of building its own factory.
In terms of sales channels, similar to Huawei, in terms of product design and technology research and development, it incorporates the existing design, technology and architecture solutions of mainstream brands such as NIO and Xpeng. However, for many young people who pursue personalization and differentiation, homogeneous new energy vehicles may greatly reduce their desire to buy.
Therefore, Xiaomi has made varying degrees of efforts at the level of automobile power and brand power. The Xiaomi SU7 is divided into two versions, rear-wheel drive and four-wheel drive, with a top speed of 210km/h and 265km/h respectively, which has a great advantage over the current version of the same class. At the same time, Xiaomi and Xiaomi car brands have also been bound to jokes and keywords such as "cost performance", "young people's first car", "199,900, make a friend".
On the other hand, Xiaomi will complete the whole ecology of "people, cars and homes" by building cars, and realize the leap from mobile phones, artificial intelligence and Internet of Things to cars. This is also a key advantage of Xiaomi.
While Xiaomi is accelerating its layout, China's electric vehicle market is also facing fierce competition, and the industry has entered the knockout stage. In 2023, Xpeng's high-end will encounter obstacles, and NIO will lose money. Subsequently, new energy vehicles started a new round of price war. Tesla's two main models have been slashed by 2 to 30,000 yuan, taking the lead in kicking off. In March, the price war burned into the fuel vehicle market. Starting with the joint efforts of Hubei government and enterprises to subsidize automobiles, a rare large-scale automobile price war in recent years swept across the country, according to incomplete statistics, more than 40 brands have joined, most of them are fuel vehicle brands. In July, Volkswagen adjusted the prices of its models, in September, Xpeng, Leap, BYD and other car companies launched preferential policies, and in December, BYD, FAW Toyota, Leap and other car companies launched year-end promotions.
Toyota, Honda, and Nissan also saw a decline in new car sales in China. According to the German World Financial Market website, China's auto market is a microcosm of the transformation of the global automotive industry, which is a stage where opportunities and risks, growth and change, cooperation and competition coexist, and it is a market that is shaping the future of mobility.
Internet companies have deployed in the automotive industry
Not only Xiaomi, but now Internet companies have become the general trend of cross-border car manufacturing. Huawei, Baidu, Alibaba, Apple, Sony and even Foxconn have all begun to enter the smart electric vehicle industry in various postures and plan their own car manufacturing plans.
Hou Fushen, deputy secretary-general of the Society of Automotive Engineers of China, proposed that by 2025, the sales of partially autonomous and conditional autonomous driving intelligent networked vehicles will account for more than 50%, and the sales of new energy vehicles will reach 20%. Algorithms have gradually become the core competitiveness in the field of intelligent electric vehicles, and traditional car companies have obvious shortcomings in the above fields, while Internet companies have strong competitiveness.
At present, Xiaomi is the world's third largest smartphone manufacturer, and the smartphone business accounts for 60% of the group's total revenue. In the context of the increasing saturation of the global smartphone market and the gradual peak of growth, the imagination of the future of the mobile phone business is limited, and Xiaomi has to find a larger "outlet".
"This is the result of repeated consideration by all partners of Xiaomi, and it is also the last major entrepreneurial project in my life. I'm willing to go into battle again and fight for Xiaomi cars!" Lei Jun said. After extremely rigorous and detailed research and demonstration, Xiaomi has made the decision to enter the field of smart electric vehicles.
Data shows that Tesla's U.S. stock market value increased nearly 7 times in 2020, becoming the world's largest car company by market capitalization. Lei Jun's early investment in NIO rose as much as 14 times, and its market value once surpassed Xiaomi; Xpeng and Ideal, which are also listed on the US stock market, increased their market value by up to 3 times compared with the same period last year at the time of IPO; and BYD also rose nearly 4 times in the same period because of the concept of new energy. If Xiaomi succeeds in building a car, there is huge room for imagination of its future market value.
Behind Xiaomi's car
On January 7, the German "Economic Weekly" website published an article "Why Xiaomi's first electric car marks the turning point of the times", which pointed out that Xiaomi SU7 is not an ordinary electric car, and it is technically comparable to the top models in the industry.
Ni Kaiming, former president of Volkswagen Group China, commented: "Wolfsburg, Stuttgart and Ingolstadt must be ringing alarm bells right now. "Previously, Apple's plan for the iCar car was difficult to produce for ten years. Companies have announced such plans over the past few years, but most of them have been lackluster.
"It's a pity that Western manufacturers have to worry about the success of Xiaomi's cars, which will be another milestone on the technological and economic downhill path of established manufacturers," Ni commented. ”
For a long time, BYD Han EV and Tesla Model 3 occupy a large share of the 200,000 pure electric car market, and old cars such as Toyota Camry and Volkswagen Magotan occupy the market.
The arrival of Xiaomi SU7 will drive a number of new pure electric cars to be launched in 2024, such as ZEEKR 007, Lynk & Co 07, Galaxy E8, Zhijie S7, etc., while enriching supply, friends can undertake the passenger flow and flow brought by Xiaomi by adjusting pricing and strategy, achieve orders and sales to fly together, and drive 200,000 pure electric cars into the replacement cycle.
In the first quarter of this year, Tesla's deliveries plummeted 8.5% year-on-year to 386,800 vehicles, well below analysts' expectations. Sales of domestically produced models in January remained good. Other joint venture brands, such as GAC Honda, GAC Toyota, Dongfeng Nissan, and Dongfeng Honda, will decline by 13.66%, 5.47%, 21.5%, and 8.5% year-on-year in revenue in 2023.
In the eyes of many industry insiders, the entry of Xiaomi cars is like a "catfish". According to incomplete statistics, since the launch of Xiaomi SU7 on March 28, about 6 car companies have started price reduction activities in different ways.
Lei Jun said at the Xiaomi Automotive Technology Conference that the goal of Xiaomi Auto is to create a dream car in the new era of the automotive industry comparable to Porsche and Tesla, and to do a good job of looking, driving, comfortable and safe mobile intelligent space. At the same time, Xiaomi Auto is committed to becoming one of the world's top five car manufacturers through 15 to 20 years of hard work, and striving for the comprehensive rise of China's automobile industry.
Source: China Automotive Digital Research Institute
In fact, the era of electrification and intelligence has brought profound changes to the Chinese and global automobile market.
First of all, the market share of autonomous passenger vehicles exceeded 60% for the first time. BYD, Chery, Changan, Geely and other leading automakers of their own brands have performed well in the transformation and upgrading, and Chinese auto brands have begun to rise in an all-round way.
Second, China is on track to become the world's largest annual auto exporter. In 2023, China's automobile exports will continue to rise. According to customs data, from January to November 2023, the cumulative export volume of mainland automobiles was 4.762 million units, a year-on-year increase of 59.8%.
It is worth mentioning that the post-joint venture era of China's auto market has begun. On July 26, 2023, the Volkswagen Group announced that the Volkswagen brand has entered into a technical framework agreement with Xpeng Motors, Audi has signed a strategic memorandum with SAIC Motor to expand its portfolio of intelligent and connected electric vehicles in the high-end market through joint research and development, and Volvo has established Polestar with Geely.
This means that the market pattern dominated by joint ventures over the past 40 years is being dismantled, and a historic moment is dawning for the rise of China's auto industry.
[Quote]
(1) List of financial reports of car companies: whose life is the best?.Chief Car Appreciator.2024-03-30.
(2) What kind of answer will the Chinese auto market hand over in 2023?.Poster News.2023-12-28.
(3) In-depth concern|Why Internet companies are building cars across borders In 2025, the sales of new intelligent networked vehicles are expected to account for 50%.Central Commission for Discipline Inspection and State Supervision Commission website.2021-04-06.
(4) Xiaomi Auto Starts the First Batch of Deliveries Lei Jun Announced: Xiaomi Has Officially Become a Car Factory!.Securities Daily.2024-04-03.
(5) Xiaomi SU7 is set at over 100,000 yuan, and the lock order is 40,000!Lei Jun: The real transformation of smart cars has officially begun, and China will surely give birth to a company as great as Tesla.Qianzhan Network.2024-04-03.
(6) Just now!Xiaomi, sudden big news!Chinese assets, sung by foreign investors!.Brokerage China.2024-04-02.
(7) German media: The Western automotive industry was shocked by Xiaomi's start to build cars or mark the turning point of the times.Reference news.2024-01-11.