No chance of buying a Xiaomi car for 200,000 RMB?

Author: Zhou Zhiyu

Editor: Zhang Xiaoling

A Weibo post paying tribute to new energy vehicle companies was edited six times, and the press conference saw the rare sight of someone wearing a sharp suit.

At the December 28th technology release conference, the humorous style remained unchanged, and XIAOMI-WR founder Lei Jun showed an unusual seriousness.

He listed the formula for drag coefficient and explained the mechanical qualities of XIAOMI-W cars one by one. Lei Jun hoped that through his explanation, the audience would understand how XIAOMI-W builds cars. At the same time, he showed his awe for the automotive industry as a former "outsider" and demonstrated that after three years of immersing himself in car manufacturing, he is no longer a layman in the automotive circle.

Finally, after 1003 days of announcing the establishment of XIAOMI-W's car manufacturing, Lei Jun officially unveiled the first model, the SU7. Lei Jun stated that XIAOMI-W's goal is to rival Porsche and Tesla.

Of course, Lei Jun left the outside world in suspense. How much will the first model be priced at? It needs to be priced in a way that allows XIAOMI-W to fully utilize its production capacity, become a hit, and not keep customers waiting for too long. This greatly tests Lei Jun's pricing wisdom.

With the entry of players like XIAOMI-W, the long-established structure of the automotive market will undergo a thorough reshaping. This will also be the final battle for the Chinese automotive market.

After the official release of the XIAOMI-W SU7, Lei Jun stated that he will continue to make good cars with 15 to 20 years of effort. In the future, XIAOMI-W cars will become one of the representatives of China's automotive industry going global and one of the top automotive giants in the world.

This dream journey has already begun.

Surpassing

By setting the theme of the press conference as "Leap," Lei Jun's ambition is evident.

His confidence comes from XIAOMI-W's leading position in several key technologies for manufacturing new energy vehicles, thanks to its partnership with top-tier suppliers.

During the press conference, Lei Jun introduced the progress of XIAOMI-W cars in electric drive, batteries, large-scale casting, intelligent driving, and intelligent cabins. Without violating advertising laws, Lei Jun used almost every adjective to describe them.

His goal is clear: XIAOMI-W is extremely determined in the core technologies of automobiles. Regardless of how much time it takes or what cost it incurs, XIAOMI-W must achieve industry-leading levels in key core technology areas.

The first batch of SU7 models will be equipped with the V6/V6s super motor with a maximum speed of 21,000 RPM, and the V8s, the third motor independently developed and produced by XIAOMI-W, with a speed of up to 27,200 RPM. It is expected to be mass-produced and installed in cars by 2025. This will also break the ceiling of global motor speed and become the world's top motor. Furthermore, the next-generation motor under research has achieved a maximum speed of 35,000 RPM.

Currently, among the models that have been mass-produced, only a few models from Tesla and Zhi Ji have motor speeds exceeding 20,000 RPM. The recently launched Jike 001 FR pure electric supercar, with a starting price of 769,000 yuan, has a maximum speed of only 20,620 RPM.XIAOMI-W has developed a new super 800V silicon carbide high-voltage platform for batteries, with a maximum voltage of 871V. The platform has a maximum capacity of 150kWh and a range of over 1200 kilometers.

As a native car manufacturer in the northern region, XIAOMI-W understands the pain points of using electric vehicles in cold weather. By introducing two thermal management technologies, XIAOMI-W aims to become the king of winter range for electric vehicles, according to Lei Jun.

In terms of integrated die-casting technology, XIAOMI-W has independently developed a 9100-ton die-casting cluster, surpassing Tesla's Shanghai factory's 6000 tons and Tesla's US factory's 9000 tons.

With a maximum acceleration of 2.78 seconds per 100 kilometers, surpassing the million-dollar luxury car Porsche Taycan Turbo, and a drag coefficient of 0.195, the lowest among mass-produced vehicles worldwide, these mechanical qualities demonstrate that the XIAOMI-W SU7 is a high-performance sports sedan with impressive performance.

With the release of these hardware specifications, the industry can make a preliminary judgment on the positioning of XIAOMI-W's first model. The price, since XIAOMI-W's debut on the Ministry of Industry and Information Technology's website, has been the biggest suspense for the outside world.

The pricing of the first model will determine XIAOMI-W's brand tone for a long time to come. Once labeled as "cost-effective" or targeting the mid-to-low-end market, it will be difficult to make a breakthrough into the high-end market. Lei Jun, who has finally established a foothold in the high-end smartphone market with XIAOMI-W, is well aware of this.

Several automotive analysts and industry insiders believe that XIAOMI-W, with its supply chain capabilities, should offer a cost-effective base version priced below 200,000 yuan, while raising the price through the smart driving version.

Automotive analyst Zhu Yulong bluntly stated that in terms of configuration, the SU7 gives consumers a feeling of value worth 300,000 yuan, but pricing still needs some time. Insiders close to XIAOMI-W also stated that pricing is still under discussion and it is not an easy decision to make.

Insiders familiar with XIAOMI-WR stated that more detailed information, including pre-sale prices, will be disclosed at the product launch event, which is expected to take place in the first quarter of next year.

At the launch event, Lei Jun stated that the price of the SU7 should not be mentioned as 99,000 yuan or 149,000 yuan anymore. It is impossible, and we should still respect technology. However, some audience members still shouted, "199,000 yuan!"

This suspense will take some time to be revealed.

Subversion

XIAOMI-W's journey into car manufacturing has not been smooth.

Can a smartphone manufacturer make good cars? Will this put a strain on XIAOMI-W's financial resources? Since the announcement of XIAOMI-W's foray into car manufacturing, investors have not been very optimistic.

In terms of the timing of the announcement, XIAOMI-W had just experienced a round of foreign divestment. The expectation of higher smartphone prices and a more upscale brand had boosted XIAOMI-W's stock price, which had quadrupled in a year. However, this momentum was shattered. In addition, there were incidents such as the "WIFI Gate" of XIAOMI-W 11 and the impact of the pandemic on XIAOMI-W's new retail model.For Lei Jun, the beginning of 2021 was a difficult moment.

To enter the money-burning car-making business at this time, and even possibly end up with nothing. Lei Jun had to convince not only the executives, but also a group of investors, supply chain partners, and find like-minded people willing to join him in the car-making industry.

At the technology launch event, Lei Jun recalled his feelings on the night of the car-making announcement, half fire and half sea. "Car-making is really difficult. Looking ahead, there are too many unknowns and uncertainties."

However, Lei Jun's personal charm and the expectation of creating a Dream Car for young people attracted engineers from the automotive industry to come one after another. Lei Jun said that in a short period of time, XIAOMI-W received more than 20,000 resumes, gathering many elites from the automotive industry.

Even some automotive headhunters have said that many engineers are willing to take a pay cut of more than 5% to grow together with XIAOMI-W and realize their dreams with Lei Jun.

In the past 1,000 days, while maintaining unwavering progress in car-making, Lei Jun has also continued to improve XIAOMI-W's mobile phone and IoT businesses.

Whether it is XIAOMI-W's successful transformation into a high-end brand or the increase in cash reserves from CNY 108 billion at the beginning of 2021 to CNY 127.6 billion at the end of the third quarter of 2023, these are the "credentials" that Lei Jun has presented. Investors have also shifted from initial doubts to trusting Lei Jun and have begun to reassess XIAOMI-W's future expected sales and stock price.

Data shows that as of December 28th, XIAOMI-WR's stock price on the Hong Kong Stock Exchange has risen by 48.81%. Among the constituents of the Hang Seng Technology Index, it is one of the few companies that has seen its stock price rise throughout the year, second only to Ideal Auto and Lenovo Group.

However, judging from the stock price performance on the day of the launch event, XIAOMI-W's stock price fell slightly by 0.25%, with a small increase in trading volume. Some institutional investors analyzed that this indicates a divergence among investors regarding the current situation of XIAOMI-W, and the launch event did not provide content that exceeded investors' expectations.

Indeed, the core of this launch event revolves around XIAOMI-W's car-making itself, which can be seen as Lei Jun's phased summary of XIAOMI-W's car-making journey and the technological challenges faced. There was not much discussion about the market's expectations for intelligent driving and intelligent cabin performance.

For consumers, the improvement in car parameter configuration is difficult to distinguish in terms of daily user experience. However, the market has high expectations for the experience brought by intelligent driving, intelligent cabin, and the vast IoT ecosystem built by XIAOMI-W. This missing content is also one of the reasons why some investors have left.

According to Guojin Securities' statistics, since the launch of Xiaopeng G6 and Weilai M5 in the middle of the year, over 70% of the sales volume comes from the intelligent driving version, and consumers are willing to pay the price difference (at least CNY 20,000 higher than the non-intelligent driving version).

In the upcoming series of launch events, XIAOMI-W will also provide more explanations on intelligent driving, intelligent cabin, and vehicle connectivity. During the gap in the next few months, XIAOMI-W will further improve the user experience in these areas.Only in this way can XIAOMI-W Car achieve its wish and become the leading player in the intelligentization of the new energy vehicle market.

Once upon a time, Tesla ignited the calm new energy vehicle market, accelerating the electrification transformation of the global automotive industry. XIAOMI-W's vision, on the other hand, is to accelerate the intelligent transformation of the automotive industry as a technology company in the current integration of the automotive and consumer electronics industries.

Among the many technology companies, XIAOMI-W Car is one of the few that has ventured into the field of car manufacturing under its own brand. Its software ecosystem, Tier 1 hardware, extensive marketing channels, and audience have also made the market not dare to underestimate this "new force". However, in the fiercely competitive automotive market, can its intelligent driving capabilities be implemented as planned? Can it smoothly overcome the challenges in production capacity? On the road of car manufacturing, XIAOMI-W is still a newcomer.

Lei Jun's tribute to companies like BYD, NIO, and Huawei is also seen as paying homage to them. Before this, these companies were mentors, but now they have become competitors and fellow travelers in the journey to strengthen China's automotive industry.

XIAOMI-W Car has attracted tremendous attention even before its launch, with every small progress being closely watched. This also makes Lei Jun extremely cautious, wanting to take each step carefully. Now that the arrow is on the string, can Lei Jun create another legend in the automotive market after shaking up the smartphone market? This is something that everyone is looking forward to.