Source: Giant Tide
Edit | Yang Xuran
With only one and a half months left until 2024, Xiaomi finally obtained its own “birth permit.”
On November 15, the Ministry of Industry and Information Technology issued the 377th batch of “Road Motor Vehicle Manufacturers and Products Notice”. Two Xiaomi brand electric cars were clearly on the list. This indicates that Lei Junkou's vision for the mass production and launch of Xiaomi in the first half of 2024 will soon be realized.
From the first mobile phone for young people, to the first stock, to the first car, Xiaomi has captured a large number of fans with its unique extreme cost performance ratio and internet thinking, and has also helped Xiaomi become a domestic brand in the consumer electronics field today.
The name of Xiaomi's first car is SU7, which is positioned as a C-class sedan. Currently, the controversy mainly focuses on pricing. Some car critics believe that with such a high configuration, the price may reach 300,000 +, but there are also those who think that this is not in line with Xiaomi's habits. There should be a “surprise” pricing, and it is very likely to fall between 200,000 and 300,000.
The reason for this is not difficult to understand: as a pioneering work, the SU7 will set the tone for Xiaomi and start a name for itself. If the pricing is too high, it means ignoring the user's basic market and brand tone.
Looking at the new car-building forces, each major manufacturer has its own focus. NIO's service, ideal household use, and Xiaopeng's intelligence. Judging from the target customer base and product style positioning, Xiaomi and Xiaopeng are likely to be very close.
On Xiaopeng's side, the G6, which had just fallen in price, fought a turnaround battle and released the best quarterly earnings report in history. The industry predicts that after the SU7, Xiaomi will also launch popular models with affordable prices. Both parties focus on the ultimate sense of technology, intelligent driving, and high cost performance.
Xiaopeng is bound to face Xiaomi's impact on its basic market. In the highly internal NEV industry, face-to-face confrontation is always unavoidable — even old acquaintances, old friends, and shareholders like Lei Jun and He Xiaopeng will eventually enter the “octagonal cage” of the market and have a close fight.
Xiaomi Radical: Aiming for the first camp
“I am willing to bet on all the achievements and reputation I have accumulated in my life to fight for Xiaomi.”
After three years of intense preparations, the “last battle” in Lei Jun's life finally began. The Xiaomi car began to be called out, and the Ministry of Industry and Information Technology's announcement unraveled its mystery.
This car, called the SU7, is manufactured by BAIC off-road and has the “Beijing Xiaomi” logo on the back. The production site is Xiaomi's Yizhuang production base.
The exterior design and body size of the SU7 are quite similar to the Porsche Taycan. Xiaomi internally calls it a “C-class ecological technology sedan”. Other models of the same class include the NIO ET7, Avita 12, and Zhijie S7.
In terms of power, a ternary lithium battery from the Ningde era was selected, and there is also a version of lithium iron phosphate from BYD Fredi. According to rumors, Xiaomi almost came up with the top configuration in its first battle. It may be equipped with an 800V high-voltage fast charger and uses the newly launched Surge OS to achieve the interconnection of mobile phones/cars/smart hardware.
Judging from public information, this car may be divided into standard, Pro, and Max versions. Consider that this is a nearly 5-meter-long sedan with a wheelbase of 3 meters, plus features such as fast charging technology and an intelligent driving system developed by Xiaomi itself.
Some car critics think that the pricing may be bottomed out at 300,000, and the top model is estimated to reach 400,000. This price is seriously inconsistent with Xiaomi's image of focusing on cost performance since its inception. Many rice fans have called it “we can't afford it.”
Of course, some analysts believe that the price of the SU7 may come as a surprise. After all, the users who can pay for Xiaomi's first car will probably still be the die-hard fans of the Xiaomi phone. If the price is too high, not only will rice noodles be discouraged, but other consumer groups will also be very hesitant.
You need to know that the Xiaomi 14 series, which has just been launched, is the best case. The latest surging OS+ Qualcomm Snapdragon 8Gen3+ Leica video has a lower price than the previous generation, and is also significantly lower than the flagship models of Apple and Huawei, setting a number of mobile phone sales records.
Therefore, some car critics believe that the final price should be between 250,000 and 300,000, especially in light of Lei Jun's aggressive sales plan, the possibility is even higher.
Sales volume has always been of particular importance to Lei Jun. According to his previous plan, “the first model plans to sell 100,000 vehicles in the first year, deliver 900,000 vehicles over the next three years, and enter the first camp in 2024.” A year ago, he also wrote “Aim to be in the top five in the world in 15-20 years.” In other words, based on the expected target of 100,000 vehicles next year, Xiaomi will sell 400,000 vehicles every year from 2025-2026.
This plan is really aggressive. Yu Chengdong, who called out the target for annual sales of 300,000 vehicles last time, was given a hard education by reality. In the end, he had to admit, “300,000 vehicles are difficult to achieve; it is already a miracle to be able to sell 100,000 to 200,000 units in the first year.”
Wei Xiaoli delivered 122,500 vehicles, 120,700 vehicles, and 133,200 vehicles respectively in 2022. Their average age is 8.5 years old. Moreover, competition in the current NEV market is extremely cruel, and new models will be introduced in a month or two.
Looking at it now, breaking into the first camp and selling 400,000 vehicles a year is a guaranteed figure. However, in addition to facing Wei Xiaoli and various new forces, Xiaomi also faces two super heavyweight rivals, BYD and Tesla.
Faced with such ambitions, there is almost no room for trial and error in Xiaomi today, which further means that aggressive pricing will be inevitable.
Xiaopeng's Sinking: Ultimate Price for Volume
“Price” played a critical role.
Worries and good news followed one after another. He Xiaopeng's heart should have been seven to eight, and uneasy recently. He had a heated argument with Yu Chengdong, and finally “laughed and feud”, sparked an internal anti-corruption storm, and was also sent a joint letter from 1,500 P7 owners requesting replacement of cars and chips...
Fortunately, on November 15, Xiaopeng's third-quarter earnings report exceeded expectations. Delivery volume for the third quarter exceeded 40,000 vehicles, including over 20,000 vehicles in October, and revenue returned to an all-time high.
Xiaopeng has now raised its fourth quarter performance guidelines. The expected delivery volume is 59500-63500 units, and the expected revenue is 127-13.6 billion yuan, breaking a record high.
In the first half of this year, Xiaopeng was in a very dangerous situation. Sales volume entered a downward channel, and stock prices fell to an all-time low. The transformation occurred with the launch of the new G6. Due to the high configuration and price drop, sales instantly bottomed out and rebounded.
Price played a critical role in this. The Xiaopeng G6 is the first model based on the Fuyao architecture. Full-scene advanced driver assistance+ Xnet deep vision network sensing system+31 lidar + 508 tops high computing power dual ORIN-X chip+800V silicon carbide fast charging... With this configuration, the price reached around 200,000.
The price reduction method worked quite well. Of the 20,000 new cars delivered by Xiaopeng in October, the G6 model sold 8,741, and one model contributed over 40% of sales.
The old models are also taking medicine according to the formula. The starting price of the new 550 version of the Xiaopeng P7i fell to 223,900 yuan. Together with the G9, the “facelift+lower starting price” strategy seizes market share.
In October, Xiaopeng said that the P7 series ranked first in sales of the “25-350,000 class pure electric mid-size sedan” with sales volume of 4,250 units; the Xiaopeng G9 topped the “medium to large pure electric SUV sales list” for four consecutive weeks, with cumulative sales volume of 4,593 units.
“Sales volume and scale are paramount.” Under the ultimate price-for-volume strategy, “We are willing to sacrifice short-term prices to prepare for medium to long-term victory.” He Xiaopeng made the right gamble this time.
Wang Fengying, the former CEO of Great Wall Motor Company, raised spiritual questions before joining Xiaopeng: Xiaopeng lacked a clear core product and could not accurately answer “who am I”; product pricing covered 150,000 to 400,000 yuan, which was too broad; and the intelligent characteristics were not obvious enough, creating no brand barriers or sense of difference.
After Wang Fengying took office, drastic reforms were initiated against Xiaopeng. Prices were lowered, and a clear distinction was made between ideals and ideals. In particular, the launch of G6 and the price reduction of G9 directly clarified Xiaopeng's “who am I” question.
Now, after a brutal internal battle, car industry entrepreneurs have generally come to terms with the truth: before they are profitable, sales volume is an important reference indicator supporting the stock prices and valuations of new forces, and is the line of life and death for car companies. The inability to generate revenue through product sales means that investors' confidence has plummeted, and after cash flow is exhausted, it will only go bankrupt like Weimar.
Moreover, the automobile itself is an industry where the scale effect is very obvious. As sales volume increases, marginal manufacturing costs gradually decrease, profit becomes easier. Tesla and BYD are the best examples. The current common practice is to first create a trend of popularity through one or two models, then use this as a foundation to launch different models such as SUVs, MPVs, and off-road models.
According to the news, Xiaomi will also develop an SUV model and an extended-range model next year. At the same time, the price band will be further lowered, similar to the product structure of Xiaomi and Redmi. By next year, as their new products continue to be launched, it is foreseeable that the battle between the two “kings” of Xiaomi and Xiaopeng will be triggered soon.
Inevably Killing: Target Users Are Too Similar
Buy trendy tech products at cheaper prices.
With the seven-character secret of “focus, perfection, reputation, and speed,” “Rebbs” swept through the entrepreneurial circle and became a popular star in that era.
Among these, “extreme” is the most critical. Xiaomi phones must not only cover the latest black technology, but also be cost-effective. This enabled Xiaomi to successfully break through in the era of copycat phones and eventually become a force in the world's consumer electronics field.
Xiaopeng now seems to be returning to the path of Xiaomi back then. At the final stage of the G6 press conference, when its price was announced, there was a wave of continuous exclamation from the audience. This is the same scene as when Lei Jun announced the pricing of a new product every time.
This also reflects from the side that potential consumers attach great importance to prices. In contrast, the sensitivity of fruit fans to prices has clearly become less sensitive, and consumers who buy apples pay more attention to product upgrades, as well as innovations in design, materials, and application.
The crowd portraits of Xiaomi and Xiaopeng also coincide. Xiaomi users are mainly young men who love games, pursue cost performance, and like to experiment with new technology; while Xiaopeng is positioned as a “young consumer group that pursues a sense of technology.”
They generally want to buy trendy technology products at cheaper prices, and they pay great attention to the “sense of the future.” Therefore, in addition to price, the competition at the level of intelligent driving will be the focus of this battle.
It is very likely that Xiaomi's first car will be equipped with the surging OS that has just been released, forming a complete ecosystem of operating systems for people and cars, forming a seamless connection with other Xiaomi products.
As for autonomous driving, Xiaomi and Xiaopeng both claim to be full-stack self-research. Xiaomi has formed an R&D team of over 500 people, with an initial investment of 3.3 billion yuan.
Xiaopeng, which has been established for nine years, has accumulated over 10 billion dollars over the past five years. Xiaopeng's support system has evolved to global intelligence. Over the next five years, more than 30 billion dollars will be invested to further advance research and development of the entire structure. Currently, the X-EEA3.0 electronic and electrical architecture, the xNGP intelligent driving assistance system, and the XMart OS in-vehicle intelligent system form the core intelligent display of Xiaopeng's Fuyao system.
Although Xiaopeng is not a mobile phone manufacturer, its vehicle system has been updated to the fifth-generation XOS Tianji system and will be equipped with a Qualcomm Snapdragon 8295 chip. He Xiaopeng said to the outside world that Xiaopeng wants Xiaopeng Motor to “maintain its technological lead for three years.”
Although many people think of cars as intelligent products like mobile phones, the usage scenarios of cars are much more complicated than mobile phones. Whether it's intelligent driving or vehicle systems, they need to be improved and iterated through feedback from car owners during actual driving. This is similar to the previous weekly update of Xiaomi MIUI.
Furthermore, by the end of 2023, it has been exactly five years since Xiaopeng's first mass-produced model, the G3. The rich experience it has accumulated and the various painful lessons it has experienced are all things Lei Jun cannot and cannot acquire in the short term.
If the price of the first CU7 is too high, or if Xiaopeng is unable to generate a differentiated competitive advantage, then Lei Jun's ups and downs are not impossible. After all, He Xiaopeng is no one else; he is an “old peng friend” who has caught his eye and has invested with real money.
Write it at the end
Automobiles are expensive and durable goods. Unlike consumer electronics such as mobile phones, automobiles are extremely complex industrial products, but at the same time, they are also a symbol of identity.
Bosses and employees, the rich and the working class all use iPhones, but they can't all buy Xiaomi cars. If Apple and Xiaomi were to exchange pricing, for the other party, it would be tantamount to self-destructing the Great Wall.
The demand pain points for rapidly changing mobile phones and expensive and low-frequency cars are very different — especially in terms of total car price. Of the more than 600 million monthly active Xiaomi users, many of them are unable to become Xiaomi car owners.
The penetration rate of new energy vehicles continues to rise, which means that the space left for Lei Jun is even more tight. However, for him, being a latecomer is already the norm in his entrepreneurial career, and it is also a rhythm he is good at coping with. Just like when Xiaomi was founded, Meizu was 7 years old.
Lei Jun has always believed that his success as a “latecomer” is a path that can be replicated. However, if he wants to follow this path of success again, he must first get through the hurdle of his old friend He Xiaopeng.
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