Xiaomi to make a car red and black: an ultimate test of Lei Jun wisdom

Xiaomi (HK: 01810) responded to the car rumor yesterday (February 22), said: “No Terms”. But this is not important. In the heart of Sima Zhao, I recognized that I left later.

Millet is a car, actually has its own gene. Ten years of mobile phones and IoT industries touch, so that they have accumulated rich supply chain management experience and industrial design comparative advantage, and grow a certain brand reputation; plus “old big brother” Qualcomm in advanced process chip Level support, which constitutes its basic dish to enter the smart car.

But it also also wants to see that the car is different from the mobile phone, and the key elements of the two are different. Especially the time is more unfavorable: the car expectation is too much – when the Xiaomi production cars have come, it is facing Tesla, which is delivered by 1 million years, and the new power of 100,000 years delivered. In 2022-2023, the traditional host factory completed in full swing; coupled with the same period of millet business, it is necessary to communicate technology (5G no chance, mainly refer to 6G), three major dimensions such as artificial intelligence technology and chip design and manufacturing. Following the missing, these “Putting Grotto” major matters describe the Taishan tablet top will form a very large disturbance of the millet.

Therefore, the millet has a car, from the path choice must be pragmatic and “smart”.

In this reason, we tend to believe that the key to the success of Xiaomi’s product is whether it can be “cutting the era” – the most expected business model is “20,000 US dollars selling price, it looks worth 40,000 The smart car of the dollar, that is, transcending its Chinese colleague, with the most extreme way to Shitla.

The specific logic is expanded below.

01

Carnome

1) Supply Chain Management

There are many incisions in nature of mobile phones and products. Sarrency: Mobile = Integrated SOC and other parts components + Optimize open source Android; product = integrated three-power system + self-research / joining automatic driving ecology.

15 years ago, I have a burning friend, I have a mobile phone for 10 years ago. I have a new energy in 5 years ago. It is not the case.

Throwing the automatic driving without talking, millet is a genetically genetically available. At the beginning of the founding, no one believes that Xiaomi can succeed, starting from 0 to the supply chain to be desperate, in this case, Xiaoma is squeezing away from Huawei, the neck, becoming the third mobile phone company of 2020Q4 global share. Experiences and processes accumulated on the mobile phone supply chain can be said to be millet genes, this core competence is directly adapted.

Based on the automatic driving car industrial chain, it can be divided into:

1, perception: various radar and camera and other sensors;

2, decision-making: algorithm, calculation, high-precision map, car network, etc.

3, execute: Bosch, Germany continent, etc. Traditional Tier1 supplier.

Therefore, with the most basic elements, Xiaomi has a car, the main system to integrate, and the core supplier that may involve, simple list:

Three power system. Battery, Ningde Times, Guoxuan University; BMS, winning electronics, joint electronic; electric machine, refining electronic, square motor; electric control, Bosch, Huichuan Technology.

Perceive system. Visual chips, mobileye; camera, winning electronics; millimeter Prada, Bosch.

Chassis system. Air spring suspension, Germany continent; front brake disc, Brebo; post-damper disk, panoff brake; EPS, Tyssenk Fuku.

Car body inside and outside. Wi brushware, Bosch; tire, multiplier, sunroof, Weibats.

Figure 1: New energy car three-power supply chain, source: wind, wind security

In this figure, Xiaomi is currently in the China’s manufacturing industry several, and it will be the most core advantage of its car.

2) Industrial design

What is an industrial design, is it important for the car?

Industrial Design is a design activity that uses the process of strategically solving problems to products, systems, services and experiences. It is the “soul” of modern manufacturing, the earliest is the birth car industry:

For example, the “Art and Collection” of General Motors is responsible for car shape design and has been successful. This forces Ford to stop the T-vehicle of “Tolerit” to produce a new T-vehicle.

Figure 2: Industrial Design, Ford and General Motors, Source: Network

Data show that product design costs account for about 10% of the product cost, but it determines 70% -80% of the product manufacturing cost. In the quality accident of the product, about 50% is caused by poor design.

The success of the Xiaomi three major segments, the success of the consumer product business, inseparable from the success of the ecological chain, inseparable from its good industrial design capabilities. Xiaomi is the first 1 year to complete the International Four Digital Design Awards (2017 IF, Best of The Best, Good Design Best 100, IDEA).

Liu De, the joint founder of Xiaomi’s competent industrial design, also known as the peach plums in the industry. Before joining Xiaomi, he founded the Department of Industrial Design, Beijing University of Science and Technology, and founded a company’s design industry (his own original words). According to our “Country Investigation”, there are many students who do industrially designed to join millet.

It can be said that industrial design is also one of the other core capabilities of Xiaomi.

3) “Old Big Brother”

We mentioned that smart auto stencils (8%), smart cockpit (8%), smart cockpit (8%), smart cabin (8%), smart cabin (8%), intelligent cockpit (8%) Net (2%), intelligent electric (33%), and car service (30%) five major segments. Among them, the intelligent hardware giant Qualcomm is an important player. The layout time in Qualcomm in the automotive field was 18 years. It revealed at the 2020 CES meeting. As of the end of 2019, the world had more than 100 million cars using high-pass automotive products and solutions. The layout in the automotive field is mainly concentrated in four areas: 1 car network (remote information processing and C-V2X); 2 smart cockpit digital platform; 3ADAS and automatic driving; 4 cloud equipment management.

Figure 3: Qualcomm in the car field, source: CITIC Securities

The public knows that Xiaomi mobile phone and Qualcomm work closely, and is proud of “Snapdragon SOC True · First Hair”.

This millet, even if it still can’t see any specific content in the field of automobile intelligence, it is unable to solve the ultimate proposition of the automatic driving of this new energy car; but with Qualcomm’s intimate cooperation, it can effectively smooth this. The short board provides strong support.

4) Brand Cognition

Undoubtedly, Xiaomi’s brand has formed a market awareness. A “poisonous spicy car assessment” short video in a few days ago, although some ridiculous ingredients are not reasonable:

Who is the most fear of millet? The status of the first Tesla, the number one price butcher is in jeopardy; the second road tiger, the quality of the most unreliable car, the crown of the car; the top 3 Toyota, the first title of the car, the trolley, the title will not be guaranteed.

I hope that it will inherit the spirit of Xiaomi mobile phones? The first car is hit, let Wuling know that who is the first car of young people, who is the king of the price ratio; second into India, weigh the Indian market like Xiaomi mobile phone, for the country to glory; The money earned back into the real estate and makes the first suite of young people soon.

Then it doesn’t inherit the spirit of Xiaomi, for fever, after all, the electric car is most afraid of burning, so it is recommended to change a slogan, are you ok.

Whether it is a good cognition or bad cognition, the two words of Xiaomi’s “car” look out, there will be a certain proportion of people to pay, this is the advantage of many new power.

In general, Xiaomi is not accidentally accidental, its “gene” and core ability, showing feasibility: 1 is the supply chain management; 2 industrial design; 3 “old big brother” high-pass; 4 brand recognition know.

02

Three major

The basic disk is indeed, but there is also a need to solve many difficulties during the small rice.

[1] no good time

Xiaomi was established in 2010. At that time, the iPhone3GS released in 2009 solved some problems in the first two generations, and the real start is hot, and Xiaomi, which is established in the “smartphone + mobile Internet” era, is the first toad.

Unlike the mobile phone, the timing of the millet is a lot behind:

Tesla can be said to be Apple in the field of electric vehicles. The first quantitative car MODEL S began delivery in June 2012. After three years (2015) China’s new power flocked, six years later (2018) The new power of the car will be delivered.

Xiaomi, in 2021, the underfather is still “still half-faced”, causing the car platform, really mass production, and at least 2023 afterwards.

What is the new energy market in 2023:

Tesla year delivery is more than 1 million.

The three giants of the car, the ideal car, Xiaopeng Auto, the annual delivery, may exceed 100,000.

Traditional host plants strive to become the top players in the market, don’t talk about “car Nokia”, the mass and BMW 2020Q1-Q3 global electric vehicle share is 6%, and the second echelon of 10 million in BYD is delivered, only Tesla 18% city share is unique.

Figure 4: Global electric vehicle delivery, source: Gaiu

When it is said that the competitive environment of the millet is a lot of competitive environment when the mobile phone is comparable. Strong hand is like Lin, you are like a child.

In addition, it is also important to see that the technical maturity curve of new energy vehicles has been taken to the fourth stage (1 science and technology born, 2 oversized foam, 3 foaming low valley, 4 steadily climbing high The high altitude period generated by the highlights and 5 substances).

The so-called “extremely advanced in extreme conservative” – ​​the big direction is not clear, and the risk is uncontrollable, and Xiaomi’s decision-making restraint is cautious. On the other hand, his promotion will be very rapid – in fact already missed the best time, the best time is 2019, the new force of the car is not yet done, that is the third stage of gold-like low valley, either mergers The future of the new forces, either integrates the traditional host factory, or the excellent talents of the network of Luo Yapos industry directly.

At first, the competitive environment in the millet is not friendly.

[2] money is not in place

In addition to the fierce competition visible in the naked eye, another big problem for the millet is a financial problem.

The industry has already spent the bubble period and the low cereals, the capital of the car is regretted, and the capital of the car is full. Who will go to the millet, go to the Lei Jun’s personal charm? Create a car, it is not a play, two or three billion throwing into the water, there is a big bubble. From the perspective of more than 10 billion adjustment profits, the funds of Xiaomi will be more tense. It is impossible to measure the cash flow here, because the cash flow of the millet routine business is relatively poor, 2020 improved the reason is the internet financial business.

Figure 5: Financial business pushing up the cash flow in the millet, Source: Xiaomi 2020Q3 financial report notes

Previously, Baidu, the market reaction was not a problem, Baidu has money. Xiaomi is a car, the market may ask, how is the money? Lei Jun has always seen the behavior characteristics of profits in the short term, and the source of funds or sustainability is required.

With this, we can even show, with the market in this wave of Hong Kong stock market, Xiaomi stock price is close to 4 times. Such trend may indicate that it is not far from a large-scale orientation.

[3] multi-line combat

It must also be pointed out that Xiaomi is still a more embarrassing, and the essential reason for the performance of the car is, and the current consumption is extremely huge.

One must ensure that in the “special period” in Huawei, it is completed in the oversight of the smartphone battlefield;

Two, in order to establish a more long-term competitive advantage, today’s bloodbook investment in three major dimensions such as communication technology (6g), chip design development, and artificial intelligence technology, with a view to complement the short board as soon as possible, realize the high-end premium of the brand;

Three times, the current window period is the realization of the brand globalization of China – the specific logic is similar to the rise of Japanese brands such as Panasonic after World War II, which means that Xiaomi is in the “compassion” and bustfulness of the internationalization. It is not lost.

The three major battlefields and how to raise food and grass, and the small meters and Lei Jun are great wisdom tests. In invisible, these factors constitute a pressure that Xiaomi’s concrete consolidation of the carrier strategy.

03

Cutting era

Temporarily, let’s put down the specific reality, let’s continue to talk about competition.

After lagging behind the times, you must find a way to cut the era. The so-called cutting era is to cut the market as yourself and other lovers who.

Tesla cutting era: cool electric car, the only massive electric vehicle, smart factory.

蔚 来 (City value once height 680 billion yuan) cutting era: you buy it is not a car, you buy home.

Ideal (recently delivered the most fierce new forces) Cutting era: far from the electric car, the fuel car is starting faster than the fuel car (electric drive).

Apple “Apple Car” cutting era: Take history, I am the era.

What’s more, there is also a water smart black technology blessing: combing its patent layout to see advanced smart stadium, “carplay” is the core entertainment system, changing transparency, intelligent sunroof, attached to the smart glass attached to AR technology. , SIRI and action tracking technology bonding intelligent interactive system, multi-screen screen with eye recognition functions.

Figure 6: Apple’s 320-year-old smart sunroof related patents. Source: USPTO

That millet, how to cut the era of millet?

The most expectation is “The Extreme Value Rate”: A car that seems to be 40,000 US dollars only sells 20,000 US dollars. This is the experience of mobile phone success. With this cutting era, continue to make friends with users, the first Trolley.

Don’t look at the meaning of these 20,000 US dollars: in the traditional internal combustion engine car market, there is a “20,000 US dollar” standard line, that is, only the most abundant and safe driving experience service on the market is available in this price. Won the most wide consumer support.

According to this iron, in the history of the automotive industry in the past 100 years, we finally saw the rise of four major symbolic brands: Ford, General, Fengtai and the public. And Tesla, then follow this path, trying to be the fifth larger – the latest industrial symbol.

Figure 7: 4 major symbolic brands in the automotive industry in the past century. Source: Dongwu Securities

But this “extreme cost-effective” cutting era has some problems:

1) Competition, Tesla “Wolf is coming”

When you think that Tesla is only Model 3 price cut-up price butcher, just dropped to 270,000, it has dropped to 250,000, then you are Too Young, it has planned to upgrade from price butcher to price idiots.

Zhu Xiaoxi, president of Tesla, was expressed in the interview. It is developing a cheap version of Tesra, which is expected to be 160,000 yuan ($ 25,000). The rumet said that this model is expected to be the earliest of the Guangzhou Auto Show in November 2021. However, the news is just released, Tesla officially referred to that the news is rumor.

The time that the cheap version is issued may have doubts, but this thing is definitely not running. Since September 20020, Mask became this incident on the day of Tesla Battery, which plans to manufacture a pure electric car with a new battery with a new battery in the next three years.

In January 2021, there were news, saying that Tesla is recruiting Director in China, and plans to open a “full-function studio” in Shanghai or Beijing, in order to design new models that meet local consumers, and will also grasp the new models of Chinese and foreign differences. This model will be designed and manufactured in China, but will be sold globally. For Tesla, this is an unprecedented, the Chinese factory only undertakes the manufacturing link of some models. Tesla is cheap version, it may be earlier than Xiaomi’s mass production car …

Figure 8: Mask also makes friends with young people, Source: Network

2) Cost, “Lert Law”

Whether you lose, Tesla is a low-cost model, which is a problem of Xiaomi. Not only is the amount of delivery and income, but also the cost of cash flow.

Prior to the cost problem, a theory of Popular Population, Wright’s Law.

In 1936, ThaodorEwright took the lead in proposing Lert Law, and a total of a product has doubled, and the cost will drop a constant percentage. In the field of automobiles, this rule is followed from 1900, and the yield is doubled, and the cost price dropped by 15%. Moore’s law is about time, while the Late Law is quantity and price, and it is also suitable for lithium batteries.

The smart factory is Tesla’s core advantage, its efficiency is higher than the traditional car companies. If the delivery of millet and Tesla cheap version is good, Based on Lert Law, Tesla’s gross profit margin will be higher, and it can sustain prices in business strategies.

3) Or cost, play “three three items in front of Guan Gong?

Maybe you will ask, how to make money on Testla? Know the “three items”, this is the business model of Xiaomi, or it can be the business model of Tesla:

All online experience line sales are not marketing with the product cost ratio, and the Mask is stronger, the traffic of Clubhouse and the dog coin can be seen.

Hardware (smart car) can not make money, make money through Internet business (unmanned driving value-added services), Tesla FSD automatic selling 64,000, and half-price EAP automatic driving (it’s automatic driving in front), except In addition, Tesla OTA (automotive system air upgrade) is also asking for money. At present, the new power of domestic cars can not afford this fees.

The fine thoughts, the “three items” on Tesla cheap version may play more than Xiaomi 6.

4) is still cost, from the legion to the soldier

BOM (Bill of Material) Material list joint procurement cost, has been a coup that Xiaomi and its ecological chain company defeat competitors.

From the creation of mobile phones to the car, the span is too large: a perceived layer (environmental perception and positioning) visual chip, front-looking camera, millimeter wave radar, laser radar; Bosch, German mainland, etc. Tier1 supplier supplied by Chassis and body parts Wait for BOM, there is nothing and possibilities for the ecological chain company.

Xiaomi has returned from the Legion to the Battle of the Battle, and there is another core ability to reduce costs.

04

No way

Of course, there is a basic disk, but there is no prominent comparative advantage, but for millet, there is no way to return the car. The logic is exactly the same as the apple, which has been in detail in the “Apple’s Car: A Surprise War”. Here, only invoking is no longer launched:

Traction Apple, the strength of the car in Xiaomi has three mains:

One is the smart electric vehicle industry, Tesla is getting more and more symbolized, Apple, Xiaomi can not intervene as soon as possible, it is likely to become a smartphone era, the role played by Xiaomi, even “Nokia” ;

Two in the new national market in China is also the most developed market in the electric vehicle industry. Huawei is dominant to use the car network operating system standard, Apple, Xiaomi is hoped in “carplay” or Internet of Things operating system. The ambition may pay the east;

Three – is also the most important, there is no production intelligent electric car, Apple, Xiaomi’s automatic driving is just the mirror in the mirror, the water is spent in the water (specific logic can be found: “Automatic Driving Cruel Final Administration: Tes La, Wei, Xiaopeng, Drip, who can become a history footage? “).

In any case, from Apple, to Baidu to make a car, then to Xiaomi to make a car, give us the core revelation is that, then, we will enter the “information + energy” mixed intelligent era:

You see, the past 10 years of invention patent evolution, the biggest achievement is that it is “increased” from a simple advanced intelligent hardware and software manufacturer.

In terms of the core advantages of the original intelligent operating system and smartphone, Apple has developed a large number of underlying technology-related underlying technology, making its information communication technologies have greatly enhanced significantly (“Huawei”, can also be said Huawei has been in “apple” in the past decade). The most direct illustration is: Apple has started the self-research plan of the baseband chip, and the baseband chip has a very high communication patent barrier.

Xiaomi is also trying to step by the apple to walk on the path of “Huawei”. If it is smooth, it is possible to show preliminary competitiveness during the 6G period.

So we can say that whether Apple Car or the ultimate birth of Xiaomi Car, all mean that the inherent smartphone industry players will enter the “information + energy” mixed intelligent manufacturing company. The above, the millet is definitely an ultimate test of Lei Jun’s wisdom. But this is the choice of the times, the Lei Jun has no retreat with his millet.

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