“There is not much time left for Xiaomi to build a car”

  The story of the first generation of car-making forces is still vivid in my mind. From the establishment of the brand to the birth of the first car, the heart-wrenching plot twists and turns, and after several struggles, it finally managed to gain a firm foothold. The second wave of car-making forces will then appear. Whether it is a technology company or a traditional company, it seems that they all believe in an old and inspirational logic in car building: if you pay, you will be rewarded.
  After Baidu, the most intensively arranged car-building operation is Xiaomi. In the past few days, there have been media reports that the construction of the Xiaomi auto factory has started. In March, Xiaomi acquired a plot of land in Yizhuang New Town, Beijing Economic and Technological Development Zone, and not far from the factory is the manufacturing base of BAIC Blue Valley.
  Since Lei Jun’s high-profile announcement of his last venture in life, Xiaomi’s response in the field of car manufacturing has continued, and public information has been reported more than once. Lei Jun has visited Changan, SAIC, Wuling, Great Wall, FAW and other car companies, and also visited Important suppliers such as Bosch and CATL.
  In terms of investment, a total of more than 50 companies in the automotive industry chain have been invested, covering many core technology fields of the industry chain such as intelligent driving, vehicle chips, power batteries, and complete vehicles. It is reported that Xiaomi Auto is expected to achieve mass production in the first half of 2024. Today, there are still two years left before the target time, but this is not a very sufficient number.
“Rice noodles” really can wait two years?

  Lei Jun’s obsession with building cars started with Tesla.
  In 2013, when Tesla was still struggling in the niche circle, on the verge of life and death, Lei Jun not only became Tesla’s first car owner, but also visited Musk in Silicon Valley many times. Musk is Tesla’s best powder-absorbing weapon. His unpretentiousness and ingenuity show the sturdiness of technology to the fullest.
  Interestingly, looking at the entire car-making circle, relying on fans is undoubtedly the secret weapon of the industry.
  Overlooking the major social platforms, the dark battle between car owners and car owners is even worse than fans maintaining show idols. The chief executive group believes that apart from Tesla, other car-making forces do not understand technology; Wei Jiajun has a high self-esteem in China, and BBA is far behind; “PPT rubbish”.
  New energy vehicles once ruthlessly stepped on traditional car companies with their huge fan group of car owners. Previously, “Internet Weekly” & eNet Research Institute released a list of new energy vehicles, and the rankings of Weilai and Xiaopeng surpassed most traditional car companies. Although the concept of “fans” has long been madly demonized by the outside world, and this group seems to be incompatible with the high-tech auto industry, the magical scene still happened.
  Compared with the crazy rewards in the Internet celebrity world and the brainless support in the entertainment industry, there are many stories of making cars and generating electricity. Taking Weilai as an example, Beijing’s “Wei Family Army” is notoriously loyal. A Weilai car owner announced that he would give up his 500,000 yuan lease contract, give his billboard to Weilai for free, and contract to turn on the lights for 5 times a night. hourly electricity bill.
  The only one who can beat Wei Jiajun is the “Chief Executive Group”. In 2013, Tesla’s overcharge construction was always hindered due to the inconsistency of charging standards with domestic standards. In order to support Tesla, some car owners paid 110,000 yuan to buy 20 charging piles, selected suitable locations in 16 cities across the country, and donated a charging pile every 300 kilometers to provide Tesla owners with free charging services.
  Today, the first batch of car-making forces at home and abroad have become a foregone conclusion to follow and form a group. Competition and review are also staged from time to time, and the fan economy is even more fundamental. For Xiaomi, which has just started, what does this turbulent river and lake mean?

  Lei Jun has always been a typical representative of true temperament in China’s Internet field. According to public information, Lei Jun’s entire network of fans has exceeded 100 million as early as August 2020, and Mi Fans all over the major social networks are always holding high the banner of “born for fever”.
  The loyalty of Mi Fan can be regarded as a major brand legend in the Internet industry, second only to Guo Fan. Before the official announcement of entering the car manufacturing industry, Xiaomi once conducted a survey. 92% of users said they would buy Xiaomi cars. The support rate of the topic “Xiaomi builds a car” eventually stabilized at more than 60%. Lei Jun’s personal charisma coupled with the ubiquitous huge rice noodle group, Xiaomi’s first step in building a car seems to have landed steadily.
  The fan economy is one of Xiaomi’s biggest strengths in car-making, but now it seems that it is more and more like a “spiritual victory” for car-making.
  First of all, although Xiaomi made a fortune in the fan economy, it is different from when Xiaomi entered the smart phone field when the fan economy was blank. Almost all smart car brands are good sickles of the fan economy. The fan effect has gradually been ruined by the car manufacturing circle. Xiaopeng’s battery life problem has been torn up, Weilai’s battery has collapsed, and Tesla has been attacked for 8 times a year for price adjustments. Car owners can turn fans into black in minutes. For the tram brand, love Love and dislike, often in an instant, the space that can make Xiaomi play more and more cramped.
  Whether Mi Fan can firmly support Xiaomi Auto after two years often depends on Xiaomi’s greatest competitiveness: the ultimate cost-effectiveness. But this advantage is easy to fail in the car-making circle, and it also faces huge variables.
  To put it simply, the demand for rice noodles with cars and rice noodles without cars is destined to be conflicting two years later. For Xiaomi, who has just entered the automotive circle, it is difficult to focus on three kinds of vehicles with uncertain positioning at the same time.
  Can Mi Fans who already own a car buy a car with the ultimate cost-effectiveness in two years? Or would you rather buy a car that’s a little better than your current car? If this part of the fans with strong purchasing power is the mainstay, then the brand tonality with the ultimate cost-effectiveness will inevitably be abandoned. However, in this field, the current car-making forces such as Weilai Ideal have gained a firm foothold. Two years later, Xiaomi’s What are the odds?
  As for Mi Fans who don’t have a car now, if they can buy a car in two years, will they buy a car with the ultimate cost-effectiveness, or a Xiaomi car that is not so cost-effective, but with a slightly higher positioning? The answer is also very clear, it must be the pursuit of the ultimate cost-effectiveness, but there are many competitors in this field.
  In the car-making circle surrounded by wolves, how should the two be chosen?
  According to public data, there are currently more than 100 companies in the “new car” field. As early as August 2021, the penetration rate of domestic new energy vehicle production has reached 20.62%. How to intervene in the crowded tram pattern is a life-and-death question worthy of Xiaomi’s thinking.
“Pricing” is not easy, Mr. Lei sighed

  In April last year, Lei Jun launched a round of vehicle pricing votes to fans on Weibo. In the early years of Xiaomi’s mobile phone business, the price-performance ratio was used to kill the Quartet. When it was time to build a car, it still could not escape the original stereotype of the brand. In the end, the models below 100,000 yuan accounted for the highest proportion of votes.
  Will Xiaomi cater to mainstream voices and make a low-end car below 100,000?

  The low profit of low-end cars is an indisputable fact. Wuling Hongguang Mini EV will sell 426,500 units in 2021, and the total sales volume of Great Wall Euler will reach 135,000. However, when it comes to revenue and profit, they can only be silent. Also axed the best-selling model. From 2019 to 2021, Leapmotor’s losses will reach 901 million, 1.100 billion and 2.845 billion respectively. The loss of 4.8 billion in three years, on average, is to lose a Leaprun T03 for every car sold.
  Rao is Lei Jun shouting that Xiaomi is not short of money to build a car, and it can’t afford such a huge loss. More importantly, whether Xiaomi is really not short of money, long-term investment in the field of car building still needs careful consideration. What cannot be ignored is the lack of success in smartphone shipments. Worldwide mobile phone shipments grew rapidly from 2008 to 2016, from 150 million units to 1.47 billion units, with a CAGR of 33%. IDC predicts that by 2025 Global mobile phone shipments are only 1.5 billion units, with a CAGR of only 3.7%.
  On March 22, Xiaomi released its 2021 annual financial report. In 2021, Q4 revenue increased by 21.4% year-on-year to 85.575 billion yuan, and net profit was 2.443 billion yuan, a sharp drop of 72.2% year-on-year. Specifically, after briefly surpassing Apple in the second quarter of last year, Xiaomi has been overtaken by Apple for two consecutive quarters, with a market share of only about 12%.
  As for the domestic market, Xiaomi continued to be surpassed by Glory. It was squeezed out of the top three for two consecutive quarters and ranked fourth. Its market share only increased by 1% year-on-year and 2% month-on-month. The basic market is unstable, and the follow-up blood transfusion capacity of the car manufacturing business will be greatly reduced. Secondly, Xiaomi’s cash reserves are also decreasing. As early as 2019, Xiaomi’s cash reserves were about 35.54 billion yuan, and by the third quarter of 2020, it will be reduced to 30.26 billion yuan. Yuan.
  At the end of 2021, Xiaomi’s cash and cash equivalents fell sharply from 54.75 billion yuan in the previous year to 23.51 billion yuan, the lowest point at the end of the year since its listing. The speed of burning money in the car circle is obvious to all.
  There will only be more and less. According to the forecast of relevant agencies, it is expected that by 2025, the cost of electronic components on each car will rise to about 7,000 US dollars, accounting for more than 35% of the total vehicle cost; it is estimated that by 2030, the entire car The industry’s annual R&D spending alone can reach $46 billion in software.
  Lei Jun’s lavishness doesn’t seem to change anything, and Xiaomi may also realize that car manufacturing cannot continue to replicate the cost-effective route of mobile phones. During this time, there was news that the first Xiaomi car was positioned in the middle and high-end, with a price range of 100,000-300,000. . Bypassing the low-end minefield, it was a group of demons dancing head-on.
  According to data from the China Passenger Car Association, models in the price range of 80,000-250,000 yuan will account for more than 70% of the sales of my country’s new energy vehicle market in 2021, which means that Xiaomi will be caught in a melee at the beginning. In the past, Xiaomi was determined to be the “first mobile phone for young people”. Today, the first car for young people has become a surprise that the majority of Mi fans are eagerly waiting for.
  How will Xiaomi car be priced? Judging from the number of 70% of Xiaomi’s young active users, 18-29 years old are the main audience for the brand. Although various consumer markets describe young people’s spending power in hype, according to the “Car Purchase Intention Survey of Post-00s in the Z Era”, in the survey of car purchase intentions with a total number of 2,859 participants, 52.1% still pay attention to price. , accounting for more than half.
  Lei Jun himself may not have thought that one day Xiaomi will worry about pricing.
Can you really bypass the “three powers”?

  In the second half of new energy vehicles, intelligence seems to be a foregone conclusion. Judging from the second wave of car companies entering the market one after another, such as intelligent driving, intelligent cockpit, intelligent network connection, intelligent electric, and car cloud services, any field may stimulate The excitement factor of Internet car building, but the original three-electrical technology, which is the most important for trams, has gradually been left behind.
  Taking Xiaomi as an example, Xiaomi’s layout in the intelligent track is far superior to the three-electric field, especially in the field of autonomous driving. According to incomplete statistics, there are more than ten companies related to autonomous driving in Xiaomi’s capital layout. Lei Jun posted on Weibo. Recruitment advertisements include 500 autonomous driving technicians. In terms of patents, Xiaomi has 446 patents related to autonomous driving.
  Coincidentally, on the 207th day of the establishment of Jidu Automobile, a joint venture between Baidu and Geely, the software team has cooperated with the Baidu Apollo team to develop intelligent cockpit and intelligent driving functions based on the simulated prototype car. It is reported that Baidu’s Baidu autonomous driving related patents More than 4,000 applications have been filed, and more than 7,800 patents related to Huawei’s autonomous driving have been filed.
  According to the statistics of Wisdom Buds, as of June 2021, 8,275 companies in my country have participated in autonomous driving patent applications, with a total of 40,682 patents, of which 14,018 are authorized patents. In comparison, Xiaomi has closed the gap. Not one and a half stars. A question that puzzles countless people, can the entry of the second wave of new car-making forces really avoid Sandian?
  First of all, the cost of Sandian in the whole vehicle remains high. The battery accounts for about 40% of the cost of the car, followed by the electric motor control, which accounts for 20-30%. It is normal for the second wave of car-making forces to flexibly avoid the important and ignore it in the early stage when the technology and experience are not yet mature. In addition, the new generation of young people’s worship of technology is beyond imagination. A field survey in colleges and universities shows that intelligence accounts for 54.1% of the most important indicators for car purchases.
  2025 is the key to the survival of autonomous driving companies. It is expected that by that time, my country’s PA and CA-level intelligent networked vehicles will account for more than 50% of the total car sales that year. The wave of intelligence has come with the flood of history. However, among the 53 models of ICVs currently on sale, there are more than 1,600 loopholes.
  This hot and cold, perhaps there is a lot of rationality in the blind carnival of capital, after all, the blank in this field is greater than the noise. Today, both Xiaomi, Huawei, and Baidu are scrambling to occupy the smart market of future cars. However, the general trend of intelligence does not mean that the car-making forces can bypass Sandian without reservation.
  At least at this stage, the three-electric system is still the focus of attention for new energy vehicles. In 2021, the State Administration for Market Regulation will receive 3,033 reports of new energy vehicle defect clues, accounting for 7% of the defect clues of automotive products, while power batteries, motors, Electronic control system problems accounted for 52.5% of new energy vehicle defect clues.
  The most basic problems have not yet been solved. Anxious to open the concept of intelligence and stepping on the rhythm of the times is to open an era. The difficulty of building a car can be imagined. In 2020, Byton Motors, Bojun Motors, and Salen Motors have successively reported bankruptcy.
  In the future, life and death will come unexpectedly. Just as JPMorgan Chase predicts, in the next one to two years, the industry CR5 may occupy more than 80% of the market share, and in 5-10 years, the global car manufacturers will be reduced to 10 main vehicles. enterprise. Time waits for no one, and the development cycle of a car from concept to SOP mass production is at least about 5 years.
  The time has dragged on for such a long time, and the car building circle is obviously forming a vicious shadow of long nights and dreams, but for Xiaomi, who is not waiting for me, impatient may not solve the problem.

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