Xiaomi Automobile was launched in April. What are the advantages?

In the last rumor about Xiaomi making cars, although Xiaomi did not admit the rumored plan, it seems that everyone knows what is going on. On the morning of March 19, 36Kr got exclusive news that the rumor about Xiaomi making cars reappeared: Xiaomi's plan to make cars will be announced as early as April.

36Kr's report added more details, such as Xiaomi's automotive business will be led by veteran Wang Chuan, "brand positioning is similar to Xiaopeng", "technical focus is on smart driving hardware technology, including chips and lidar", etc. Xiaomi's attitude towards this series of rumors is the same as last time, still noncommittal. But not denying the rumors proves that the rumors themselves do have a certain degree of authenticity.

According to these news, we believe that there is no doubt that Xiaomi is making cars. Sources said that the project will be officially launched as early as next month, so the official announcement is not far away. In fact, there is nothing wrong with technology companies openly admitting to making cars. Judging from the wave of car manufacturing and the cross-border actions of technology companies in recent years, more or less participating in the wave of car manufacturing has become a compulsory course for technology companies.
The only thing worth discussing is, can Xiaomi make a good car?

What conditions are needed to build a good car?

Although everyone thinks that the threshold for making Internet cars is lower than that for traditional fuel cars, Lei Jun's friend He Xiaopeng, the founder of Xiaopeng Motors, said, "Making cars is a deep pit, and the difficulty of making cars is 100 times that of starting an Internet business." The automobile industry is known as the "pearl" of the manufacturing industry. The length of the supply chain and the number of upstream and downstream industries involved are unmatched in the consumer field, and it is far from comparable to smartphones or other digital electronic products.

He Xiaopeng once explained, "A car has nearly 30,000 parts. If the probability of error of each part is 1%, that is, the reliability rate is 99%, and a car is assembled with 20,000 to 30,000 parts, then this car will basically have problems every week." It is conceivable that the primary issue facing technology companies is not how to highlight technological competitiveness, but how to build good cars.

At present, a more feasible way is to cooperate with traditional car brands like Baidu, and complete the task of car manufacturing by taking what they need and complementing each other's strengths and weaknesses. In fact, the most important thing in the automotive industry is "qualification", followed by technical reserves. For technology companies, they may be able to spend money to buy a variety of technologies to equip their products, but the qualifications and core technologies for car manufacturing are hard to come by.

As strong as Apple is with ample funds and advanced technological capabilities, when rumors of its car-making business come out, it is always inevitably linked to traditional car companies (first Hyundai, then Daimler Group). In fact, the path Xiaomi is taking is not much different.

However, if Xiaomi wants to make its automotive business at least as high as brands like Xiaopeng, Weilai and Ideal, it will definitely need to invest in building factories in the future, and the investment will not be small. Take Xiaopeng as an example. In 2017, Xiaopeng invested in a production base, and the first and second phases cost 10 billion yuan. He Xiaopeng himself said, "20 billion yuan is not enough."

In addition to money and qualifications, if Xiaomi wants to make a pure electric vehicle, it will also face challenges such as battery and electronic control safety. Battery capacity is directly related to the core competitiveness of pure electric vehicles, while electronic control safety is related to product reputation and consumer trust. In comparison, other intelligent technologies and even motor technology are secondary.

If we look at it from another angle, then at least we can say that Xiaomi's car-making is not without advantages. As long as it is willing to invest and has the support of the supply chain, it will be no problem to build a car that can be driven. The next thing to look at is the ability to tell stories in terms of intelligence.

Will Xiaomi Auto’s advantage be its price?

Xiaomi has been closely associated with "cost-effectiveness" since its inception. It can be said that cost-effectiveness is at least one of the most important factors for Xiaomi's products to stand firm and even become the top in the industry. After all, cars are relatively expensive consumer goods, and their popularity cannot reach the level of consumer electronics. The biggest expectation of most netizens for Xiaomi's participation in car manufacturing is to be able to launch cost-effective models so that consumers with limited budgets can also afford cars.

However, the Chinese auto market at this time is not lacking in cost-effective models. Among the independent auto brands, Great Wall, Geely, Changan and Chery have all laid out the entry-level market and added a large number of configurations to models below 100,000 yuan, making the entry-level models also have good cost-effectiveness.

For example, the 100,000 yuan Haval H6 not only has excellent overall performance of the three major components, but also has advanced configurations such as electric seats, keyless entry, and 360-degree panoramic imaging, and the technological experience is close to that of a Class B luxury car. In the field of new energy, the Xpeng G3, as a pure electric model with a maximum running speed of 520 km, has a maximum price of only 150,000 yuan, and the 100,000 yuan new energy market is also eyeing brands such as Trumpchi, Ora, and BYD. It is difficult for Xiaomi to distance itself from these brands in terms of driving experience, and it is unlikely to have a significant price advantage: the price of cost-effective models of domestic brands is already sincere enough.

In the case that the price is unlikely to be lower than other domestic brands, the only advantage of new entrants such as Xiaomi is probably "intelligence". One of the representative functions of intelligence is autonomous driving.

Unfortunately, we have not heard of Xiaomi's unique insights and accumulation in autonomous driving. Although some Xiaomi car patents have been leaked before, they are not related to autonomous driving. Baidu, which has been deeply engaged in autonomous driving for many years, has its own advantages in this regard. After the vehicles jointly launched with Geely are launched, the autonomous driving technology based on Apollo will inevitably become one of Jidu Auto's main selling points.

In addition, we know that the most critical core technology for electric vehicles is the "three-electric system" (battery, motor, and electronic control system), but the patents currently published by Xiaomi are basically related to smart cockpits and cannot constitute core competitiveness.

Perhaps Xiaomi's current idea is similar to Huawei's, that is, starting from the role of "supplier" of automobile brands, providing intelligent capabilities to traditional automobile companies through various cooperations, and improving the intelligence level of the whole vehicle. In addition, the linkage with Xiaomi mobile phones and bringing some interactive experience in the IoT field may also become some of Xiaomi's contributions in the process of car manufacturing, but overall, Xiaomi's road to car manufacturing is not as simple as we think.

However, Xiao Lei’s colleague also gave a very interesting point of view. If Xiaomi can bring its fast charging technology to the electric vehicle field and make charging of electric vehicles as fast as refueling, would this be considered a major innovation?

Internet car manufacturing, different industries are like different mountains

In the public's perception, it seems easy for technology companies to build cars. They have the technology, sufficient funds, understand the latest trends in technology and are good at seizing opportunities. However, at least in China, few of the leading technology companies are willing to build cars themselves, especially technology giants that started out as consumer electronics companies.

Vivo has never been involved in any rumors related to car manufacturing. Although OPPO has been rumored to have applied for some patents, Chen Mingyong's attitude is the same as Huawei's: interested but not sure whether to participate. Even though new car-making forces such as Weilai, Xiaopeng, and Ideal have achieved astonishing market valuations with a few models, the domestic mobile phone giants Xiaomi, Huami, and OV have a very ambiguous attitude towards car manufacturing.

There is nothing wrong with making cars, so why do the mobile phone technology giants avoid talking about it? The only explanation is that "the time has not come yet." From the perspective of the development trend of the global technology industry, it is an indisputable fact that technology giants are actively entering the field of automobile manufacturing, especially new energy and electric vehicles have changed the past game play, and to a certain extent, technology companies have the conditions to enter the automobile production and sales, but making cars is still a serious topic, and it is more likely to change the fundamental business model of a technology company.

For example, for Meizu and OPPO, if they do not rigorously announce that their mobile phone business is related to automobile manufacturing, it is likely to send the wrong message to the market and bring uncontrollable consequences.

In short, car manufacturing is indeed a trend, and technology companies of all sizes hope to integrate their own technologies into car manufacturing so that they can take advantage of the trend and share a piece of the pie. But how to do it and when to do it are ultimately a matter of opportunity. The success of Xiaomi Auto may be a matter of chance, but entering the market is definitely just a matter of time.