How to deal with Tesla's price cut by 14,000 across the board? Lei Jun: Tesla is also a friend, and I admire Musk very much

National Business Daily

2024-04-23 18:07Posted on the official account of Sichuan Daily Economic News

Edited: Huang Sheng

On April 23, Lei Jun, founder, chairman and CEO of Xiaomi, said at the Xiaomi Group Investor Conference that it is expected that the gross profit margin of Xiaomi SU7 will be 5%~10%, "Today's sales are much larger than expected, and we still need to carefully calculate the specific figures."

Lei Jun also said that the current annual budget of the intelligent driving team is about 1.5 billion yuan, about more than 1,000 engineers, and the next stage will be expanded to 1,500 people this year and 2,000 people next year, further increasing investment in intelligent driving. In terms of overseas market planning, Lei Jun said that in terms of business deployment, it will focus 100% on the domestic market in the next three years, and doing a good job in the Chinese market is the first step for Xiaomi Auto.

Image source: Photo by reporter Zhang Jian

Why does the Xiaomi SU7 sell so well and what is the most important reason?

In this regard, Lei Jun believes: "In the past, pure electric cars were considered a niche market, such as Tesla's Model 3 is the champion in this field, selling an average of 12,000 units per month in China, and if the pure electric car reaches an average of 3,000 units per month, it can enter the top five, and everyone thinks it is a niche market."

There are various reasons why we choose pure electric cars, but almost all of them are not optimistic, and my personal goal is to sell 10,000 yuan a month. Our original target was to deliver 72,000 units a year, and I know that many investors expect it to be less than 3,000, which is normal.

I think behind the initial success of this release is that Xiaomi SU7 proves that pure electric cars are a big market, and in the past, this market was small, but no one made it. In the traditional automotive industry, the market demand for SUVs and sedans is 1:1. I think that in the field of pure electric vehicles, sedans must be the mainstream demand. ”

Image source: Photo by reporter Zhang Jian

Regarding the price cut just announced by Tesla, Lei Jun said:

Tesla raised prices on April 1, and on April 21, it dropped by 14,000 yuan across the board, which really makes me admire Tesla and Musk very much. In the face of the competitive environment, Tesla has shown such a sensitive response, which I admire very much, which is not at all like the multinational giants with a market value of five or six hundred billion dollars. Musk is truly an extraordinary entrepreneur.

Tesla is also a friend to us, and I think the best way to deal with competition is not only the price war, but also the product power. I think the Xiaomi SU7 has a full range of product capabilities, such as sunscreen, storage, and ecology are all unique selling points, which are very attractive to the target customer group.

In the future, we will concentrate on making a good product, carefully collect feedback from every user on this car, and strive to further improve, which is the focus of our attention.

Improving product strength and doing a good job for users is also a better competitive strategy.

On April 23, Lu Weibing, president of Xiaomi Group and general manager of Xiaomi brand, issued a document saying that Lei Jun announced at the Xiaomi investor conference today that as of April 20, the number of Xiaomi SU7 locked orders has exceeded 70,000 units.

Subsequently, Lu Weibing posted that Lei Jun announced that the delivery target of Xiaomi SU7 in 2024 will exceed 100,000 units.

On April 23, Lei Jun also posted: "We are currently making every effort to expand our production capacity, and the annual delivery target will exceed 100,000 vehicles." Deliveries of the Standard Edition and Max were originally planned to start at the end of April, but were brought forward to April 18. ”

On the 22nd, Lei Jun said on his personal Weibo that the current production capacity and delivery speed of Xiaomi SU7 are increasing rapidly, and the standard version and Max have been delivered ahead of schedule. Many prospective car owners found in the Xiaomi Auto APP that the estimated delivery time was advanced. Lei Jun said that he will detail the production capacity and delivery plan at the Beijing Auto Show.

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