As always, there is intense interest in Xiaomi's foray into the automotive industry. And now, there's been another development.
The price of the new car has reportedly been leaked, with mass production expected in the first half of 2024.
Since announcing its entry into the automotive industry, Xiaomi has revealed very little information about its first vehicle...
With updates on factory progress, manufacturing certifications, and leadership changes, speculation is inevitable. Will Lei Jun’s speech next month reveal any major news?
When it comes to car manufacturing, Xiaomi is a newcomer. Under the spotlight, they’re moving quickly—but without rushing.
A tour of the Xiaomi Auto factory reveals it is nearing completion. Never entering a battle unprepared—is Xiaomi truly just a hair’s breadth away from mass production?
The First Battle for Survival in the Auto Industry
From the outset, Xiaomi chose the path of building cars entirely on its own.
Simply put, this is extremely costly. Having entered the market late, trading money for time is the only option.
Insiders indicate that the automotive plant is currently undergoing equipment debugging and trial production. Since investment levels vary, the debugging speed differs for each automaker, with the fastest taking at least six months.
This means Xiaomi’s car-making project is about to become a reality…
Before visiting the factory, let’s take a look at the timeline of Xiaomi’s automotive venture.
In March 2021, Xiaomi officially announced its entry into the automotive industry. The company plans to invest $10 billion over the next 10 years, with an initial investment of 10 billion yuan.
In July of the same year, Xiaomi’s autonomous driving division began recruiting staff. In September, Xiaomi Automobile Co., Ltd. was officially registered with a registered capital of 10 billion yuan.
On November 27 of the same year, the Beijing Economic-Technological Development Area Administrative Committee signed a cooperation agreement with Xiaomi, announcing that Xiaomi Automobile would be based in the Beijing Economic-Technological Development Area.
In early 2022, the Beijing Municipal People’s Congress released the “Work Report of the Beijing Municipal People’s Government,” which mentioned plans to facilitate the commencement of construction for Xiaomi Auto.
Subsequently, in March, Xiaomi announced its first mass-production vehicle, which is scheduled to enter mass production in the first half of 2024.
In August, Xiaomi Group disclosed progress on the R&D of its autonomous driving technology and unveiled a road-test vehicle equipped with the technology.
At the end of the year, Lu Weibing, former head of the Redmi brand and President of Xiaomi China, was appointed President of Xiaomi Group, succeeding the retired former President Wang Xiang.
Xiaomi did not participate in this year’s Shanghai Auto Show. However, Lei Jun attended as a visitor, stopping by the booths of numerous automakers including NIO, Xpeng, Zeekr, HiPhi, and the “BBA” (BMW, Mercedes-Benz, and Audi). Many joked that the only thing missing was him using a tape measure to check the dimensions of the vehicles.
Previously, he personally led a team to visit the headquarters of automakers such as SAIC-GM-Wuling and Great Wall Motors to tour production lines and experience these brands’ products.
These moves are not only aimed at fulfilling the promise of building cars, but also at learning as they go and preparing for the future.
Investment and Site Selection Cannot Be Rushed
This June, Xiaomi Auto saw significant new developments. Judging by this progress, the company is moving forward with its plans in an orderly manner.
According to the previous plan, the Xiaomi Auto factory will be built in two phases:
Phase One, covering nearly 720,000 square meters, began construction in April 2022 and is scheduled for completion in June 2023.
Phase Two is scheduled to begin construction in 2024 and be completed in 2025. Phase One includes four production facilities with an annual production capacity of 150,000 vehicles.
Stepping inside the factory, the exterior is already complete, while inside, equipment is being tested and fine-tuned in full swing—a clear sign that production is imminent.
It is worth noting that a 15-minute drive away lies the Beijing Mercedes-Benz front-wheel-drive vehicle and engine production base. Reportedly, this area serves as Beijing’s high-level autonomous driving demonstration zone, which might just be the perfect setting for Xiaomi’s automotive debut.
As a state-of-the-art smart vehicle factory, it features a full production process encompassing stamping, welding, painting, and battery assembly.
The production lines in the main workshop are managed by China Automotive Engineering, which is likely one of the top choices among production line integrators for new automotive startups.
The smart manufacturing industrial base is divided into Buildings 1 through 4—covering stamping, welding, painting, and assembly, as well as battery production—along with a testing building. The relevant facilities passed inspection on June 12.
At the very least, compared to other new entrants in the automotive industry, Xiaomi possesses extensive experience in product manufacturing and supply chain management.
Generally speaking, the first model from new automotive startups is an SUV. Looking at Xiaomi, its first vehicle is likely to be a pure-electric sedan, which is expected to make its official debut by the end of the year.
In the automotive manufacturing sector, from experienced personnel to mainstream production lines, quality and craftsmanship are paramount; the final verdict will be revealed once the project is fully operational.
However, to manufacture new energy vehicles, a production license is required as the “entry ticket.”
Recently, the revocation of Borgward’s passenger vehicle production license effectively debunked rumors that “Xiaomi would inherit Borgward’s automotive production qualifications.”
However, some have suggested that Xiaomi’s automotive venture will not rely on the consolidation of existing licenses but will instead secure approval for a new automotive production license.
Although the Ministry of Industry and Information Technology has not halted applications for new energy vehicle production licenses, no automaker has obtained such a license in recent years.
However, good news has followed.
The Ministry of Finance, the State Taxation Administration, and the Ministry of Industry and Information Technology have jointly issued the "Announcement on Extending and Optimizing the Vehicle Purchase Tax Exemption Policy for New Energy Vehicles."
For Xiaomi, there is a possibility of catching the “last train” of the new energy vehicle purchase tax reduction policy.
Recruiting Top Talent
Since the official announcement in 2021, Lei Jun has been desperately seeking talent in the automotive sector, launching various creative recruitment campaigns.
This is certainly a sound strategy: letting professionals handle professional tasks.
He once posted a recruitment notice on Weibo, urgently seeking 500 autonomous driving experts, which immediately drove up industry salaries.
Later, the company recruited Li Tianyuan, former exterior designer for BMW’s i brand; Zhou Gang, former deputy general manager of SAIC-GM-Wuling Sales Company; Yu Liguo, former president of BAIC Arcfox; and Hu Zhengnan, former director of Geely Research Institute, all of whom now hold key positions at Xiaomi Auto.
Beyond senior executives, as of March 31, 2023, Xiaomi Group had 16,458 R&D personnel, accounting for over 50% of its total workforce, with the Xiaomi Auto R&D team alone exceeding 2,300 members.
Taking autonomous driving as an example, Xiaomi has invested 3.3 billion yuan in R&D for its first phase. By last August, the dedicated autonomous driving team had grown to over 500 members. The goal is to join the top tier of the autonomous driving industry by 2024.
The reason for poaching executives is clear: Lei Jun aims to find talent with expertise in both vehicle manufacturing and sales to serve as his deputies, working together to build the Xiaomi Auto brand and its products.
As Xiaomi enters the automotive sector, its investments in the industry have continued to grow, evolving from financial investments to strategic and equity investments.
Its investment focus has shifted toward the upstream and downstream segments of the new energy vehicle supply chain, targeting core areas such as autonomous driving, chips, and batteries to build a “Xiaomi ecosystem” within the automotive sector.
To ensure supply, stabilize production, and reduce costs within the supply chain, it is necessary to establish high-quality and deep relationships with suppliers at every stage.
For now, building the Xiaomi Auto ecosystem and supply chain through investments is the fastest way to achieve this goal.
It must be said that, from laying out the full new energy vehicle industry chain to the revelation of Xiaomi Auto’s pricing, the company may well achieve its goal of launching in 2024. However, securing a competitive edge in the new energy vehicle market still presents significant challenges.
It has been eight years since the "internet-based car-making" trend began, and the journey has not been as smooth as anticipated. Those who jumped in early have either been washed up on the shore or are still swimming naked without a swimsuit...
