Xiaomi is optimistic about Xpeng Motors. Is Xiaomi not worried at all in the cold winter of the auto market?

Previously, Xiaopeng received $400 million in Series C financing, including investment from Xiaomi. Why did Xiaomi focus on Xiaopeng? In fact, this is also inevitable for the development of Xiaopeng Motors.

Although Xpeng had extremely difficult initial deliveries, its production capacity is not weak at all when its production line matures. According to data from the China Passenger Car Association, as of September 2019, Xpeng G3 sales were 12,829 units, much higher than those of first-tier new car companies such as NIO.

Considering that NIO has raised nearly 10 billion yuan more in financing than Xpeng, it is definitely a surprise that Xpeng can achieve such results.

It can be said that perhaps it was precisely thanks to the pursuit of products, refined operations and precise capital utilization efficiency that Xiaopeng avoided the "huge loss pit" of Weilai.

The most notable investor in Xiaopeng's financing this time comes from Xiaomi. On the one hand, Xiaomi certainly recognizes Xiaopeng's business model, and on the other hand, Xiaomi's ambition is also exposed.

In fact, Xiaomi and Xiaopeng had shown signs of friendship long before the financing.

On December 15, 2017, Lei Jun's Shunwei Capital participated in Xpeng Motors' Series A+ financing. On September 24, 2019, Xiaomi announced that the Xiaomi Mi 9 Pro 5G version can serve as the key for Xpeng's new car P7, which will be launched in Q2 2020.

As early as 2015, Xiaomi began to lay out IoT through a vigorous "chain building" campaign, hoping that IoT would become another driving force for Xiaomi besides mobile phones.

With the advent of 5G networks, IoT will flourish with greater vitality. According to the National Cable Television Association (NCTA), with the explosion of 5G networks, the number of IoT devices installed is expected to grow to more than 50 billion by 2020.

And with the development of 5G networks, self-driving cars may also become possible. Once cars enter the self-driving stage, the potential of the car "platform" may explode with infinite possibilities just like feature phones entering smartphones.

However, since the automobile industry is a high-threshold industry, entering the automobile industry simply by "building a chain" is nothing but nonsense. More importantly, IoT manufacturers seem to be gradually dissatisfied with Xiaomi's unique IoT share achieved by closing data, and gradually begin to surround Xiaomi.

Taking these two aspects into consideration, Xiaomi started to develop automotive products early in the early stages of its new power development, which also filled the last piece of its IoT puzzle.

It can be said that while Xiaomi is investing in Xiaopeng, it is also supplementing its own resources and capabilities. This is a mutually beneficial and win-win situation for Xiaopeng and Xiaomi.

Although at present, Xiaopeng can be regarded as "riding high on the spring breeze and seeing all the flowers in Chang'an in one day" among the new forces of the car company, but considering the industry, Xiaopeng still has two major problems to face, one is the product upgrade, and the other is the encirclement of Tesla Model 3.

Looking at Xiaopeng's products, the average price of its G series is only in the range of 140,000 to 200,000 yuan. Compared with a number of new car companies, it has a bit of the "Xiaomi high cost-effectiveness" flavor.

Although this is of great significance for improving its own market share, cars are different from mobile phones after all. Simply competing on cost-effectiveness is destined to mean that the ceiling will not be too high.

And due to price cost constraints, if Xiaopeng continues to stick to its "low-price strategy", it will be difficult to support corresponding products when facing the autonomous driving technology brought by the upcoming 5G network.

Therefore, Xiaopeng urgently needs to launch Xiaopeng P7 to prove its potential in the high-end market, and achieve technological breakthroughs through Xiaopeng P7 as soon as possible to form an unbreakable technological barrier.

But on the other hand, the Xiaopeng P7, which is priced at around 300,000 yuan, will inevitably encounter the Tesla Model 3, a new energy legend that has been tested by the market for a long time.

In comparison, the Xiaopeng P7 has a range of over 600 km, supports L3-level autonomous driving assistance system, accelerates from 0 to 100 km/h in 4 seconds, and is priced at around 300,000 yuan.

The domestic Tesla Model 3 long-range version has a range of 590 km. If you buy AP+FSD separately, it can accelerate from 0 to 100 meters in 3 seconds. The final price is about 400,000 yuan.

Although the Tesla Model 3 is more expensive, it has not yet been fully "localized". I believe that as the Tesla Model 3 is gradually "localized", its price will be further reduced. More importantly, with the gradual completion of Tesla's Shanghai Super Factory, its production capacity will be increased to 500,000 vehicles per year within two years, which is no less than a dimensionality reduction blow to Xiaopeng, which is "seeking progress in stability".

Therefore, although Xiaopeng has temporarily won the favor of the capital market and Xiaomi, a staunch ally, with its products, Xiaopeng still faces a lot of challenges in the external environment. The key to all this will be the Xiaopeng P7 delivered by Xiaopeng in Q2 2020. In the face of Tesla's layers of encirclement, can Xiaopeng continue to perform extremely stably? Can Lei Jun's lofty ideal of electric vehicles x IoT be realized? Everything will eventually return to the product itself.