Xiaomi's Shockwave: A new round of price cuts in the automotive industry unfolds

Last week, the release of Xiaomi's SU7 was like a "barbarian" entering the automotive circle, bringing unprecedented traffic and popularity to car manufacturers, overturning the market. After BYD disrupted the A-level car track, Lei Jun dropped this "traffic bomb", igniting the second wave of price wars this year.

On April 1st, which should have been the day when various companies announced their sales figures, price reduction posters came one after another.

The "superstar" Aito's new M7 took the lead in reducing the price by 20,000 yuan, lowering the threshold to 229,800 yuan; XPeng G9 also reduced by 20,000, with a starting price of 243,900 yuan; ZEEKR 007 launched a rear-wheel drive version priced at 209,900 yuan with an additional 20,000 yuan optional package; Nio introduced a subsidy of 100 million yuan for oil car replacement; and Tesla, which raised prices against the trend, did so due to its own stock price and profit pressures, as an early announced "forcing order".

In fact, at the end of March before this, XPeng's all-electric sedan P7i had already taken the initiative to make concessions to the market, and Aito even broke its 300,000 yuan "price bottom line" and released the new Aito 12 starting at 265,800 yuan.

All these restless actions are from car manufacturers competing in the 200,000-300,000 yuan range with Xiaomi SU7.

On March 28th, Xiaomi SU7 officially debuted and revealed its final price range: 215,900-299,900 yuan. For a while, almost all social media platforms were discussing Xiaomi cars, and test drives at stores were even scheduled until the early morning. The day after the release, Xiaomi announced that all 150,000 units of this year's production capacity had been fully booked.

Hu Zhengnan, senior consultant of Xiaomi Automobile, sighed, "The production capacity for this year has been used up. We go back to the factory directly at night without sleeping, hold meetings overnight to find solutions, and can't even drink the celebration wine."

What Lei Jun has intervened in is the "must-win area" for domestic high-end new energy players. There are as many as 20-30 main selling models in this range, with layouts from Nio, Aito, IM Motors, ZEEKR, Aito, Aito, Li Auto, and others. There is indeed an attractive market space here.

A senior executive of a new force pointed out that the new energy sub-market above 200,000 is the fastest growing track, with a scale of 3.5 million units this year, including 900,000 pure increments. Li Xiang also predicts that by the end of this year, the concentration in this market segment will be higher than BBA, with the top three players accounting for 70% of the market share.

Clearly, as the marketing king who desires the Xiaomi brand to rise, Lei Jun is fully committed to capturing this important bridgehead, and Xiaomi has just entered a critical period formed by the Matthew effect in the market.

Lei Jun, who regards car-making as his last entrepreneurial endeavor in life, proposes to make Xiaomi Automobile one of the top five car companies globally through 15-20 years of effort.

However, for a newly established ambitious new force, the ambition is indeed significant. Looking at the data from 2023, the threshold for the global TOP5 club is over six million vehicles, and there are also brands like Li Auto, XPeng, and Richard Yu's "Four Realms" with similar ideas Whether they can become industry giants is not the point for now. What's more important is that they cannot afford to lose in the present, or lose at the starting line of becoming giants, otherwise they will face the cruel fate of being eliminated.

With years of marketing and technological experience, "Lei Jun" first helped Xiaomi capture the minds of users, which is what other competitors fear. After the launch event, Nio's chairman, Li Bin, bluntly told Lei Jun during a live broadcast that the pricing of the SU7 model made their own sub-brand "LeDao" very uncomfortable; ZEEKR also admitted in an interview that Xiaomi has the upper hand in marketing.

Clearly, Xiaomi's entry into the automotive industry has become a new disruptor, just focusing on the long-range version is enough to shake the pricing system of the entire new energy vehicle industry. This is the advantage of cross-border players, and it has brought new ideas to other competitors.

Currently, all players speeding on the track are trying to leverage their strengths against others' weaknesses, which is a normal performance in the early stages of elimination rounds. After showcasing their strengths, "shoring up weaknesses" becomes the top priority for the leading candidates, as they must quickly experiment and make improvements.

Because a new round of reshuffling will always be around, the ripples stirred up by Xiaomi may just be the beginning. More intense price wars, more battles of capabilities, are quietly brewing backstage at this moment