Author | Stand Ye
Edit | Kang Xiao
Xiaomi company’s progress on Xiaomi automobile is finally no longer secretive.
On August 29th, the announcement of Xiaomi Company’s performance in the second quarter of 2023 showed that the investment in innovative business such as Xiaomi smart electric vehicle continued to increase, and Q2 investment reached 1.4 billion yuan. Lu Weibing, president of Xiaomi Group, responded in the performance conference call: the investment in cash flow of Xiaomi Automobile is higher than the disclosed figure.
Lu Weibing said that the actual investment of Xiaomi Automobile is even greater. Xiaomi is making the long-term layout of the automobile with the goal of entering the top five in the world in the future, self-researching, and also building its own automobile factory.
In addition, not long ago, Xiaomi Automobile just finished the summer test, and the progress exceeded expectations, maintaining the mass production target in the first half of 2024 unchanged.
On August 14th, Lei Jun, the chairman of Xiaomi Group, made no mention of this major strategy of Xiaomi Automobile in his fourth New Year’s speech. At the same time, the news that Baidu gave up making cars made the future of Xiaomi’s car-making become dark.
In just over two weeks, the official disclosure of Xiaomi Company confirmed the consistency of Xiaomi’s car-making strategy to some extent.
Recently, according to foreign media reports, the National Development and Reform Commission approved Xiaomi Company to produce electric vehicles earlier this month, which marked an important step for Xiaomi Automobile to mass-produce in early 2024. In response to this news, Xiaomi Company did not make any reply to the outside world.
Whether or not we can get the production qualification of new energy vehicles is the first major difficulty encountered by the new forces on the road to building cars. LI, Xpeng Motors, Weimar, Zero Run and other new forces all acquire production qualifications through mergers and acquisitions of enterprises with production qualifications.
Today, Didi, Baidu, Huawei, Tencent, Ali and other big companies in the field of science and technology Internet either don’t build cars, or have given up building cars one after another. Xiaomi Automobile has become "the last hope of the whole village".
Xiaomi finally "sat" on the poker table.
Lei Jun finally sat on the table of new energy vehicles.
Xiaomi has been acting frequently recently. Pictures of Lei Jun, Xiaomi Group President Lu Weibing and Shunwei Capital Investment Partner Hu Zhengnan doing road test for new cars in Xinjiang have been widely spread on social media. In addition, the domain name of "xiaomiev.com" has been exposed.
On March 30, 2021, the board of directors of Xiaomi Group officially approved the establishment of the smart electric vehicle business and announced that it would build a car next time. According to the plan, Xiaomi will invest 10 billion US dollars in the next decade, and set the goal of mass production of the first batch of cars in the first half of 2024.
It has been two and a half years since Lei Jun announced the construction of the car, and Xiaomi’s construction of the car has always remained mysterious to the outside world.
However, at that time, at that time, the situation in the new energy market at that time when Lei Jun announced the construction of the car has changed greatly. Nowadays, the domestic new energy electric vehicle market is already the Red Sea, BYD has risen strongly, and the ideal of new forces to build cars has set off a banner.
Regarding the progress of Xiaomi Automobile, Lei Jun revealed at the beginning of this year, "Xiaomi’s car-making is progressing smoothly at present, and it can even be said that it exceeds expectations. But the car is very complicated, so you must not worry. I also hope that everyone will give some patience and give some encouragement. "
Lei Jun also said: "In the next two years, we are not going to rumor and introduce any new progress about Xiaomi’s car making."
Of course, people in the automobile circle pointed out that Xiaomi’s low-key is a consideration of commercial confidentiality on the one hand, and of course, the most important thing is that he has not yet obtained qualifications.
Previously, the industry generally believed that Xiaomi would undertake Beijing Baowo’s car-making qualification, but in June this year, Beijing Baowo Automobile applied for cancellation of automobile production qualification by itself, which meant that Xiaomi could not directly obtain qualification cooperation from Baowo.
In China, the production qualification has been basically stopped since July 1, 2017. Whether or not we can get the production qualification of new energy vehicles is the first major difficulty encountered by the new forces on the road to building cars.
Recently, Reuters reported that the National Development and Reform Commission had approved Xiaomi Company to produce electric vehicles earlier this month, and Xiaomi became the fourth enterprise approved by the National Development and Reform Commission since the end of 2017.
In addition, Xiaomi needs to obtain the approval of the Ministry of Industry and Information Technology to meet the Regulations on the Administration of New Energy Vehicle Manufacturers and Products Access.
Domestic production and sales of new energy vehicles need "double qualifications", and the Ministry of Industry and Information Technology has not yet disclosed the relevant information of Xiaomi Automobile, which may be one of the reasons why Xiaomi officials remain silent. In the past two years, it has been extremely low-key about Xiaomi’s car.
However, the recent frequent movements of Xiaomi car may also confirm from the side that Xiaomi car may be a good thing approaching. A source said: Xiaomi plans to produce about 100,000 electric vehicles next year. Some Xiaomi employees also said that since last week, the company has also accelerated the recruitment of electric vehicle factories to prepare for the increase in production in December.
According to the news of "Leopard Change", the Yizhuang factory of Xiaomi Automobile has been basically completed, and the factory has produced and rolled off four or five cars. It is actively testing, and the model is highly confidential. Most employees in Yizhuang factory have never seen the "true face" of the car. Only four or five cars wrapped in black cloth are constantly testing in and out.
Big manufacturers have given up making cars.
Didi, which made cars almost at the same time as Xiaomi’s announcement, has never been officially announced, but the industry has defaulted. On August 28th, Xpeng Motors and Didi announced at the same time that Xpeng Motors would acquire the related assets and R&D capabilities of Didi’s smart electric vehicle project for a maximum of HK$ 5.835 billion. A senior in the automobile industry told Deep Net: "This means the end of building cars by Didi".
Building a car by Didi dates back to 2021 at the earliest. At that time, the net transmission Didi established the car-making business code-named "Da Vinci", and the person in charge was Yang Jun, vice president of Didi Travel and general manager of Xiaoju Car Service. It has been reported that the team has a size of 1,700 people, and it is expected that the car-making plan will be released in mid-2023, and it will be delivered one year later.
"Leonardo da Vinci will not rebuild the whole car, nor will he sell the whole car again. In addition to engineering and products will leave some people, brand, marketing, after-sales and other departments will be cleared. " According to Tiger Sniff, citing people familiar with the matter, Didi gave up building a car not because of its qualification. "Cheng Wei is very uncertain about building a car, and he lacks confidence in passing it on to the people below … and finally he can only sell his business."
It is also true. The announcement shows that in 2021, Didi’s car-making business lost 763 million yuan, accounting for 1.5% of Didi’s annual loss, but by 2022, the loss of Didi’s car-making business has reached 2.638 billion yuan, and the loss has increased by 245% year-on-year. In addition, the qualification of building a car is also one of the factors, and under the superposition of many factors, "Da Vinci" was acquired by Tucki.
Compared with the low-key Didi car business, Baidu is more high-profile. Almost at the same time as Xiaomi built a car, on January 11, 2021, Baidu officially announced that it would build a car, saying that it would formally form a smart car company and enter the automobile industry as a vehicle manufacturer. Geely Holding Group was a strategic partner of the new company at that time, and Baidu also cut into vehicle manufacturing by investing in Weimar.
Since 2016, Baidu has participated in the research and development of smart cars. Li Yanhong’s approach is to do almost all the core areas related to cars, from vehicle manufacturing to bicycle coordination to vehicle-road coordination.
On the evening of August 14th, Jidu Automobile, a car-making project of Baidu, officially "renamed" the Extreme Yue brand. The first model of the original Jidu automobile, "Jidu ROBO-01", was renamed as "Extreme Yue 01" and entered the public announcement of the latest batch of new automobile products of the Ministry of Industry and Information Technology. It can be understood that the Extreme Yue 01 has obtained the qualification for marketing.
The concentration has become extremely high, and Baidu has changed from a major shareholder who takes the lead in building a car to a technology provider who participates in building a car. This means that the founder of Baidu, Li Yanhong, has given up building a car. According to the Financial Times’ report in early August, Baidu’s final abandonment of building its own car through concentration is also related to the fact that it has never been qualified. In addition, Baidu seems to have focused its business on the big AI model.
Ali, on the other hand, held a heavy position in Tucki, and later took a stake in Zhiji Automobile jointly built by SAIC and Zhangjiang Hi-Tech, accounting for 18% of the shares. The automatic driving of Dharma Institute was transferred to the novice.
At that time, cross-border car-building became a common practice. Didi, Baidu, Meituan, Qihoo 360, OPPO, Gree, Skyworth, LeTV, Evergrande and Baoneng all made cars, and some companies chose to provide services as suppliers, such as Tencent and Huawei.
Nowadays, times have changed, and only Xiaomi is still on the road, which has become the last hope of big manufacturers.
"Cost-effective" has become a Red Sea competition.
"At present, Xiaomi is facing a lot of pressure. The high-end mobile phone business has not broken through, and the pressure on inventory and cash flow is quite high. For Xiaomi, there is an urgent need for explosive products to drain, so everything is put on the car-making business," an insider of Xiaomi told Deep Net.
Xiaomi’s second-quarter financial report shows that in terms of R&D expenditure, Xiaomi’s R&D expenditure reached RMB 4.6 billion in the second quarter, a year-on-year increase.
21.0%, maintained a year-on-year growth for nine consecutive quarters, and R&D personnel accounted for nearly 52%. The compound annual growth rate of R&D investment in the past six years (2017-2022) is as high as 38.4%. It is estimated that the total R&D investment of Xiaomi will exceed RMB 20 billion in 2023.
Regardless of the R&D strength and investment level, Xiaomi Company has been working hard in the hardware industry for so many years. Xiaomi Automobile has little problem in design, R&D and production, but the competition pattern of new energy vehicles is becoming increasingly fierce, which is very different from the environment when Xiaomi Automobile first proposed to build a car.
First, the mobile phone industry has encountered a down cycle. The financial report shows that Xiaomi’s smartphone business revenue in the quarter was 36.6 billion yuan, a year-on-year decrease of 13.4%. Xiaomi Group’s smartphone business revenue in the second quarter of 2023 was 36.6 billion yuan, down 13.4% from 42.3 billion yuan in the same period of last year, mainly due to the decrease in smartphone shipments; Global smartphone shipments were 32.9 million units, down 15.8% from 39.1 million units in the same period last year.
In addition, the external environment of Xiaomi automobile has changed. In 2021, the pattern of new energy vehicles in China is still unclear. In 2022, after BYD announced in March that it would stop producing fuel vehicles, the sales of new energy vehicles rose suddenly, exceeding 100,000 vehicles/month, leaving behind all new car-making forces including Tesla China. In the first half of 2023, BYD ranked first in global and domestic new energy sales, accounting for 37.4% of China market share.
"The automobile industry is entering the Warring States period, and resources are accelerating to focus on the head enterprises."Liu Feilei, secretary of the board of directors of Guangzhou Automobile Ai ‘an, said that in 2023, the price war in the automobile market will become fierce, and the market competition will enter the "knockout stage". In the future, 3-5 first-class head enterprises will be formed.
In 2022, the top five brands in the new energy vehicle market accounted for 50.1% of the market sales, and it is estimated that the top five brands will account for 80% of the sales in 2030.
On the day when Lei Jun released his 2023 annual speech, Tesla announced another price reduction promotion. Later, new forces including Ideal and Weilai had to continue to follow up. Even though the G6, a new explosion model, was launched in the first half of the year, Tucki’s financial report for the new quarter was still negative for two consecutive quarters, with increasing losses.
In the market range of about 200,000, the fight for new energy vehicles has become a river of blood. For Xiaomi Automobile, it just looks beautiful to continue its high cost performance in the field of mobile phones, because the core competitiveness of most new domestic car-making forces on the market is "super high cost performance".
The underlying supporting capacity of price competitiveness is large-scale production, and Xiaomi Automobile, which has just started, is in a great disadvantage compared with BYD and other enterprises.
Recently, overseas media reported that Xiaomi Automobile will only keep a profit margin of 1%, which is obtained from software rather than hardware. Whether the internet thinking can help Lei Jun break the game can only be tested by time.