news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Text｜"Chinese Entrepreneurs" reporter Zhao Dongshan

Editor: Ma Jiying

Source of header image｜Interviewee

Recently, Lei Jun likes the new name given to him by netizens - "Director Lei".

After 14 years of entrepreneurship, Lei Jun and Xiaomi are increasingly involved in the manufacturing process, from smartphones to smart homes to smart cars. However, automobile production is complex and the supply chain is long, which means that Lei Jun has to make more difficult management decisions. On the evening of July 19, Lei Jun recalled his journey of car manufacturing for the first time in his personal speech in 2024.

Lei Jun recalled that in the three years since he started making cars, he has test-driven more than 170 cars and recorded more than 200,000 words of test-driving notes and materials. He also read many biographies of auto tycoons and even re-watched all the racing movies he had watched in the past. After watching them, he had a lot of feelings. He foundFerrari、PorscheThe reason why it did so well is that the founders were all racing drivers.

Therefore, Lei Jun set himself a "small goal":Can I become one of the best car owners in China? Can I drive a racing car?In order to learn racing well, Lei Jun bought a seven-axis simulator and practiced secretly at home, which was very hard. After many crashes and runs off the track, he finally got his racing license and demonstrated his driving skills at the speech.Xiaomi SU7Drifting scene.

Lei Jun also mentioned that when he first announced that he would build a car, several VCs gave himXiaomi MotorsThe price was set at 10 billion US dollars. But he finally refused, thinking that the car manufacturing cycle was very long, and if you took other people's money, it would be almost impossible to keep the same ideas as others for a long time. In the end, Lei Jun decided that Xiaomi should be fully funded by himself, pay all the money, and bear all the risks by himself.

Two or three months before the launch of Xiaomi SU7, Lei Jun invited 23 friends in the automotive industry to hold a small communication meeting and asked for their suggestions. The result was beyond his expectation - most people were not optimistic.Everyone thinks that it would be a blessing if this car could sell 3,000 units per month.

Lei Jun was also very uncertain. When he had to determine the annual production capacity of Xiaomi Auto in February this year, he was very conflicted. "If I set too much, I was worried that I couldn't sell it. If I set too little, I was worried that it wouldn't be enough to sell, and everyone accused me of hunger marketing," Lei Jun recalled.

Many people suggested that Lei Jun set the annual production capacity at 30,000 vehicles. In the end, Lei Jun set it at 76,000 vehicles. This means that excluding the ramp-up time, monthly sales must reach 10,000 vehicles. In the field of pure electric cars, there is only one car with monthly sales of 10,000 vehicles, which isTeslaofModel 3。

What Lei Jun did not expect was that after the release of SU7 on the evening of March 28, the number of pre-orders exceeded 10,000 in 4 minutes and 50,000 in 27 minutes. In May this year, Xiaomi Motors readjusted its delivery target: to deliver 100,000 vehicles at least this year and strive for 120,000 vehicles. Lei Jun revealed in his speech,Xiaomi SU7's annual delivery target of 100,000 units is expected to be completed ahead of schedule in November.

In 2024, competition in the new energy vehicle market is extremely fierce. In addition to the fierce price war, delivery guarantee has also become the key to competition among major automakers. For the new entrant Xiaomi Auto, while user orders are pouring in, production capacity pressure also follows.

Delivery pressure

The Xiaomi Automobile Factory in Majuqiao, Yizhuang, Beijing, became busy less than two months after it started operation. Starting from June 2024, the "double shift mode" was opened here, and the daily production time increased from 8 hours to 16 hours.

Before 8 a.m., workers entered the Xiaomi Auto Factory from the factory dormitory near Louxinzhuang. "In the past month, the number of workers at the Xiaomi Auto Factory has surged from more than 1,000 to more than 2,000," an insider at the Xiaomi Auto Factory told China Entrepreneur.

The factory park is divided into six workshops, including die-casting, body, painting, and battery. The exterior of each workshop is marked with eye-catching bright orange and numbers. In the body workshop, more than 400 robots, with more than 400 high-precision cameras, shuttle between the factory corridors, transporting various parts and raw materials, playing music while walking, and cooperating with the workers' work.

The increase in orders has led to rising delivery pressure on Xiaomi Auto.

As early as April 3, at the first Xiaomi car delivery ceremony, Lei Jun said that within just a few days of the Xiaomi SU7 going on sale, more than 100,000 people placed orders, and the number of locked orders has exceeded 40,000. "The number of orders for Xiaomi SU7 is 3 to 5 times higher than expected."

Previously, according to the data on the Xiaomi Auto APP, the Xiaomi SU7 standard version is expected to be delivered in 29 to 32 weeks after the order is locked, the Xiaomi SU7 Pro is expected to be delivered in 30 to 33 weeks after the order is locked, and the Xiaomi SU7 Max is expected to be delivered in 33 to 36 weeks after the order is locked.

At the end of 2023, Lei Jun said in an interview with CCTV:I am particularly worried that if it doesn't become popular right from the start, no one will buy it. What I am even more worried about is that if everyone comes to buy it, they will have to wait for a year or two, and they will definitely be criticized.It’s actually a lot of anxiety.”

At Xiaomi's first quarter financial performance meeting on May 23, 2024, Xiaomi Group President Lu Weibing introduced that Xiaomi's automobile factory is confident of delivering 10,000 units in June, ensuring that more than 100,000 units will be delivered in 2024, and challenging the annual target of 120,000 units.

On July 2, according to data released by the Passenger Car Market Information Joint Branch of the China Automobile Dealers Association, Xiaomi Auto’s wholesale sales in June were 11,603 units.Xpeng MotorsThe sales volume was 10,668 units, slightly lower than Xiaomi;Ideal AutoThe sales volume of Tesla in China was 71,007 units,BYDThe sales volume was 340,211 units.

Lei Jun once said that the Xiaomi Automobile Factory can produce 40 Xiaomi SU7s per hour, and a new car can roll off the production line every 76 seconds. Based on this calculation, after starting double-shift production, the full monthly production capacity of the Xiaomi Automobile Factory is expected to increase to nearly 20,000 vehicles.

Starting from the first delivery on April 3, it took only 43 days for the delivery volume of Xiaomi SU7 to exceed 10,000. Lei Jun also wrote that this is a major milestone for Xiaomi.

The inevitable production hell

Every new entrant into the automotive field seems to go through a difficult period of ramping up production capacity, especially those cross-border challengers.

NIOIn the two months before its IPO in 2018, it received 17,000 ES8 orders with deposits paid, produced more than 1,300 ES8s, and delivered 481 ES8s, with a delivery rate of only 2.8%. At the time, Jiemian News reported that "NIO has raised more than 10 billion yuan in three years, but has not yet completed its production capacity ramp-up."

Seven years ago, Tesla also went through a difficult production hell phase. In July 2017, Model 3 officially started production and mass production plan was launched. Musk set a goal for Tesla factory to produce 5,000 Model 3 per week.He has done various calculations for the company and found that if the company cannot achieve this mass production speed, the company's funds will run out.

In order to achieve this mass production goal, from March 2017 to the end of June 2018, Musk stayed in the factory all day, from Tesla's battery production super factory in Nevada to the Fremont vehicle assembly plant, focusing on the work in the factory workshop, sleeping only 4 to 5 hours a day, and often sleeping on the floor in the factory.

Isaacson wrote in "Musk's Biography": "Musk pays most attention to a display screen in the factory, on which the operation of the entire assembly line station can be seen, and marked with red and green lights. Musk moves quickly in the factory like a bear, walking to every red light he sees, questioning the reason thoroughly." Musk requires employees to question every requirement and eliminate unnecessary links and settings.At his peak, he issued more than 100 orders a day at the factory, including dismantling "stupid" robotic automation devices.

Until late May 2018, Tesla's Fremont factory could only produce 3,500 Model 3s per week at most, 1,500 short of Musk's goal of 5,000. For this reason, Musk had to lead workers to build a temporary assembly line in the factory's old parking lot.

At 1:53 a.m. on July 1 of that year, when the black Model 3 with a banner reading “Car No. 5000” rolled off the assembly line, Musk sent a message to all Tesla employees: “We did it! … We created a brand new solution that broke the impossible … This marks that we have just become a real car company.”

Xiaomi cars on the road

Tesla has always been a role model for Xiaomi Auto.

After the Xiaomi Auto launch in March this year, Lei Jun said in an interview with media including China Entrepreneur: "Tesla's power consumption is much better than ours. I invested a lot of money to reach its level. Tesla is definitely worth learning from, at least for three to five years."

Lei Jun is a Tesla owner as well as a Porsche owner. He believes that these two brands, one representing electric cars and the other representing sports cars, are both benchmarks in the history of the automotive industry. "When Xiaomi decided to build a car, it must compete with the best car manufacturers in the world. If it doesn't even dare to compete, it will definitely not do well."

In terms of production capacity, Xiaomi Auto is also working hard to catch up with its peers such as Tesla.On March 19, 2024, the Xiaomi Auto Super Factory was officially unveiled. April 3 is the official delivery date of Xiaomi SU7, and the delivery centers in 29 cities across the country, including Beijing, Shanghai, Guangzhou, and Shenzhen, also started the first batch of deliveries simultaneously.

In order to increase production capacity and shorten delivery time, Xiaomi Automobile Factory is looking for room for efficiency improvement in all aspects. During the May Day holiday and early July in 2024, Xiaomi Automobile Factory carried out maintenance and renovation of factory equipment and production lines twice in preparation for increasing production capacity and delivery capabilities this year.

At the same time, a reporter from "China Entrepreneur" learned from Xiaomi Auto store staff that in order to improve the efficiency of matching orders with production, Xiaomi Auto will shorten the consumer's large order locking hesitation period from 7 days to 3 days starting from 0:00 on June 5, in order to reduce uncertainties and lock orders and arrange production as soon as possible.

Xiaomi Auto's plan to increase its production capacity is also placing higher demands on suppliers.Wall Street Journal previously reported that Xiaomi Auto is asking upstream suppliers to increase the supply of parts, with one type of parts increasing from approximately 10,000 sets per month to more than 18,000 sets recently.

China Entrepreneur learned that the Xiaomi SU7 standard version uses not only Fudi batteries but also Ningde batteries. The two are exactly the same in terms of driving range, 15-minute charging, and vehicle and three-electric system warranty. Standard version orders that start to be locked at 0:00 on May 25 will be randomly assigned to the Xiaomi SU7 standard version equipped with Fudi or Ningde batteries.

In addition to the above measures,Xiaomi's auto factory is also increasing its production capacity by expanding the factory area and adding production lines, and the second phase of the Xiaomi auto factory is also under construction.

The public information released by the Economic Development Zone on the "Comprehensive Planning Implementation Plan for Block 0106 in YZ00-0606 Block of Yizhuang New Town" shows that the location of Xiaomi Auto's Phase II factory has obtained industrial land approval. According to previous news, the factory is expected to start construction this year and be completed in 2025.

According to the above-mentioned planning scheme, Xiaomi Auto Phase II Factory is located in Fangxindian Village and Xiaozhangwan Village in Yizhuang New Town, with an annual planned production capacity of 150,000 vehicles. The reporter of "China Entrepreneur" learned from the field thatThis area has now entered the demolition phase.The archway of the iconic building "Fang Xindian" has been demolished.

On July 2, Xiaomi Motors’ official account released a letter to prospective Xiaomi SU7 owners, which mentioned that the delivery of the Xiaomi SU7 series will be further accelerated.After locking the order, the delivery cycle is expected to be shortened by up to 5 weeks.At the same time, Xiaomi Auto's sales and service network has been expanding. On June 30, Xiaomi Auto's official account announced that Xiaomi Auto added 17 new stores in June. Currently, 87 stores in 30 cities across the country have been opened.

More than three years ago, when Lei Jun stood at the crossroads of car manufacturing, he was very hesitant and entangled. At that time, Xiaomi was in a turbulent period, with both internal and external difficulties. Where did Xiaomi get the courage to build a car, and how did it break through the siege?

By chance, Lei Jun found the book "When the Stars Shine" on the bookshelf. A sentence in the book made him make the final decision.“A person’s belief in miracles is always the first prerequisite for a miracle to happen.”After more than three years of making cars, whenever Lei Jun encountered setbacks and hesitations, he would think of the moments when fate came and those moments when courage shined recorded in the book.