Chinanews client, Beijing, April 1st (Reporter Zhang Xu) Sometimes, rumors are unfulfilled predictions.

Xiaomi has completely denied building a car for five years, but on March 30, with an announcement, the dust settled: Lei Jun finally got on the car.

　　Because he admired Jobs, Lei Jun founded Xiaomi, named "Rebs".

Now that he is going to build a car, he will inevitably have to compete with Musk. "Resker" is rising again?

What is the chance of success for Xiaomi to build a car, and what will be the appearance of "the first car of young people"?

Everything is still unknown, but Lei Jun is really "Stud" this time.

Xiaomi announced to build a car.

Deny that it will come true in five years

　　Xiaomi has always denied Sanlian's attitude towards making cars.

　　In 2015, Lei Jun publicly stated that he would not consider building cars within three to five years.

In June 2020, Xiaomi officially said that "We are serious about making cars", and the result was a remote control car.

At the end of 2020, there were rumors that Xiaomi was about to release the "Young People's First Car" produced by BYD. Xu Jieyun, deputy director of the General Office of Xiaomi Group (previously general manager of Xiaomi's public relations department), categorically denied: "Everyone who says Xiaomi wants to build a car , It's all fake news."

Xu Jieyun denied building a car twice.

Weibo screenshot

　　However, as soon as the five-year period passed, Xiaomi's response became "ambiguous" when it came to building a car.

In February 2021, when news of car making was announced, the share price of Xiaomi Group once rose by 12%, and finally closed up 6.42% to 30.65 Hong Kong dollars, and the company's market value increased by more than 50 billion Hong Kong dollars.

　　It is not difficult to see that the market has been expecting Xiaomi to build cars for too long.

And why does Xiaomi build a car?

　　At the end of 2020, Lei Jun said at the Xiaomi 11 press conference that Xiaomi’s stock price has been below the issue price for two years. “It’s shameful to say it. This is what I have been super depressed in the past two years.”

　　Xiaomi's mobile phone business faces a ceiling, and there is no new business story to tell, and it will not be able to stimulate investors to buy stocks.

Lei Jun once said, "Standing on the vent, pigs can fly." Looking at the world, which field is the most popular right now?

It is a smart car represented by Tesla.

　　When Xiaomi was valued at US$4 billion, the market value of Tesla was US$3 billion. When the market value of Tesla exceeded US$20 billion in 2013, Lei Jun’s evaluation of this was “extraordinary.” In 2020, Tesla’s share price An increase of 1000%, the tens of billions of dollars that year, went all the way to trillions of dollars.

　　In 2020, even Lei Jun or Xiaomi invested in Weilai and Xiaopeng Motors are heading towards a market value of 100 billion U.S. dollars, while Xiaomi’s share price broke through 30.85 Hong Kong dollars on December 23, 2020. club.

　　Not to mention the Tesla, who was holding one of his heads back then, even the younger brother went away. Lei Jun can bear it, but Xiaomi's board of directors can't bear it.

　　In January of this year, the decision of Xiaomi's board of directors to request research and build cars passed to Lei Jun's eyes.

Lei Jun said, "No matter how unwilling I am, on January 15th, we began to conduct serious investigations."

　　75 days, 85 industry visits and communication, in-depth exchanges with more than 200 automotive industry veterans, 4 internal management discussions, and 2 formal board meetings-Xiaomi finally chose to join the "car".

　　How significant is the significance of building a car?

Lei Jun said: "This will be the last major entrepreneurial project in my life" "I am willing to bet on the reputation of all my life"...

The picture comes from Xiaomi Weibo.

　　However, in the capital market, on March 31, the share price of Xiaomi Group opened higher and lowered, with the highest increase of more than 5%, and then fell all the way, and even turned green for a time. As of press time, the share price of Xiaomi Group rose 0% to 25.6 Hong Kong dollars.

From "Rebs" to "Reske"

　　Lei Jun may be one of the first domestic entrepreneurs who foresee the future of the smart car industry.

Not only took the lead in testing Tesla, but also specially visited Musk when he participated in the Global Mobile Internet Conference in October 2013.

"Rebs" raised a question at the time: Why did Tesla survive and develop rapidly, and is still known as the "Apple of the automotive industry"?

　　However, a detailed analysis will find that although Tesla and Apple have the same high-end brand image, they have been on the way to reduce prices and do not pursue high profit margins like Apple.

Data map: Tesla founder Musk is giving a speech.

Photo by Zhang Hengwei

　　For example, since October 2019, Model 3 has been reduced in price five times, from 355,000 yuan to 249,900 yuan today, and Model Y also fell to 270,000 yuan at the beginning of this year.

A research report by Tianfeng Securities pointed out that “if you consider the further increase in Tesla’s localization and the continued decline in battery prices, the entry level of Model Y may fall to less than 250,000 yuan.”

　　From the perspective of gross profit margin, BYD's first half of 2020 is 23.9%, ideally 19.8%, Weilai's second quarter of 2020 is 8.4%, and Tesla's gross profit margin is close to 30%.

In the foreseeable future, Tesla may further reduce the space for competitors through price cuts.

Data map: In 2019, the first batch of domestic Tesla was officially delivered to the site.

Photo by Cao Lei

　　Whose strategy is more like Tesla?

In fact, it is Xiaomi itself.

After ten years of hard work in the mobile phone industry, Xiaomi relied on a strategy of "low price and high matching". In the era of flagship mobile phones at 4,000 to 5,000 yuan, the price of 1999 yuan was used to gain a foothold.

　　Some people speculated that “As the first new energy vehicle for young people, Xiaomi may sell for 99,000”.

Although it may not be such a low price, in order to retain fans, Xiaomi's mass-produced models will most likely take the cost-effective route.

　　Ping An Securities Research Report also believes that in the past, Xiaomi led by Lei Jun has gained successful experience in the mobile phone and smart home industries, which is expected to be replicated in car manufacturing.

It is expected that Xiaomi will launch highly cost-effective models mainly for the price range below 200,000 yuan.

　　Some insiders pointed out that Xiaomi can use the increasingly mature smart car industry chain and the unique features of the Xiaomi ecosystem to retain users.

After the gradual increase in production capacity, there is also an opportunity to reduce prices to gain market share and obtain more profits from Internet services-just like Lei Jun most admired Musk did.

Data map: New energy vehicle production line.

Photo by China News Agency reporter Zhang Bin

Is it enough to spend $10 billion to build a car in 10 years?

　　Although Lei Jun said in 2015 that he would not build a car in three to five years.

However, the layout in the field of smart cars has never been idle. He adopted a three-step strategy of "investment, collaboration, and research and development".

　　When he decided to invest in a car manufacturing company, Lei Jun met more than 20 entrepreneurs back and forth, and learned that Li Bin had paid 1 billion yuan to build a car out of his own pocket, and decided to become an investor in NIO.

　　Shunwei Capital and Xiaomi Group under the name of Lei Jun participated in the A1 and C rounds of Xpeng Motors respectively.

Lei Jun visited the new base of Xpeng Motors in Guangzhou and conducted a test drive on Xpeng's mass-produced G3. He Xiaopeng sat in the co-pilot to explain it.

On the day that Xiaopeng Motors went public, Lei Jun not only went with him, but also gave He Xiaopeng a kilogram of gold bricks to encourage him to continue working hard.

Cars displayed in Xiaopeng Experience Store.

Photo by Chinanews reporter Zhang Xu

　　Xiaomi also actively participates in the automotive IoT ecosystem through its various products.

At present, Xiaomi watches can be used as smart remotes for NIO owners, Xiaomi phones can act as car keys for Xiaopeng and BYD, and Weimar EX5 can control up to 20 types of Xiaomi smart home devices in 8 categories.

　　After watching the forerunner wading through the water of the smart car, Lei Jun finally exerted his strength.

"Xiaomi will invest 10 billion U.S. dollars in the next ten years, the first investment of 10 billion yuan."

　　Why was the first investment as high as 10 billion yuan?

Because He Xiaopeng once sighed: "Looking at other people's cars, I think 10 billion is an exaggeration. I just jumped in and discovered that 20 billion is not enough."

　　At the press conference, Lei Jun said that Xiaomi has a cash reserve of 108 billion yuan and sufficient ammunition.

This is using the "money capability" to tell everyone: Xiaomi will not repeat the old road that LeEco was dragged down by Jia Yueting's car.

Screenshot of Xiaomi's March 30 press conference.

　　The money problem is solved, how to build the car?

At present, technology companies mainly have three models for making cars. The first is a full-process self-research model, where production qualifications are obtained through purchase or application.

The second is independent research and development, commissioned by car companies, Weilai and Xiaopeng Automobile are both representatives.

The third is that technology companies provide software, car companies provide hardware, and cooperate in production. The cooperation between Baidu and Geely belongs to this type.

　　Automotive analyst Zhang Xiang told Chinanews that Xiaomi will most likely choose the third way to build cars.

"The profit of car manufacturing is not as high as that of the Internet business. Even for BMW, the current profit margin is only about 10%. Therefore, Xiaomi needs to give full play to its advantages in design and marketing, and entrust the low profit margin of car manufacturing to car companies. Do. Because of the overcapacity of car companies now, with the strength of Xiaomi, it is easy to find partners."

　　At the same time, Xiaomi has also set up a research and development team of more than 10,000 people, and has made an early layout in terms of automobile patents.

According to data from the innovation and intellectual property SAAS service provider Wisdom Bud, Xiaomi’s patent layout in the automotive field has been launched at least in 2013. The number of applications from 2015 to 2019 is 187, 186, 113, 82 and 70, respectively. In 2020 It is predicted that the number of applications (some patents are not published) is about 134.

The picture comes from Wisdom Bud.

　　According to the analysis of the patent value of Smart Buds, the value of Tesla patents in new energy vehicles is more than 200 million US dollars, the patents of Weilai Automobile are worth 18.64 million US dollars, and the value of Xiaomi related patents is more than 100 million US dollars.

　　All the conditions have been met. According to the development path of the new forces in the past, when the 10 billion yuan is spent, Xiaomi will have two or three car series. If the positioning is appropriate and the cost is well controlled, it will soon start to have positive cash. flow.

Can Xiaomi "remake Xiaomi"

　　Compared with Baidu, which also officially announced the production of cars this year, Xiaomi's ambitions seem not so big.

　　Li Yanhong said at the financial report meeting on February 18 that the company established by Baidu and Geely is now running smoothly.

At present, Baidu has hired a management team and is planning to register a brand for a new car. From the initial stage of research and development to the launch of electric cars, it will take about three years. In the future, Baidu will also cooperate with other car manufacturers.

Changsha Baidu Apollo self-driving taxi is open for operation (data map).

Photo by Yang Huafeng

　　Baidu’s smart car platform software Apollo has been built for more than three years. There are many cooperative car companies, but no car company has used the Apollo platform to mass-produce cars. This makes Baidu have to build cars in person like Google produces pixel series phones. To prove the strength of the Apollo platform for manufacturers.

　　In other words, it is not so much that Baidu wants to build cars, as it is to rebuild an Android system in the field of smart cars. Baidu itself is a service provider like Google.

Gold prospectors may not make money, and selling water will make money without losing money.

This idea is very clever, but Baidu is not the only clever person in this market.

　　For example, in September 2020, Geely released the Haohan architecture, which was officially defined as an operating system for smart cars.

At present, more than 16 new models of more than 7 brands have started research and development. In 2021, a number of new models from the Haohan architecture will be launched on the market one after another.

　　Today's smart car market is just like the smart phone market around 2010. There are countless players who want to be the next Apple, the next Google, or the next Xiaomi.

The difference is that the US$10 trillion smart car market far exceeds the US$500 billion smart phone industry. For entrepreneurs, this is a much broader ocean.

　　In this brand new track, "Whether Xiaomi can rebuild Xiaomi", everyone is waiting to see.

(Finish)