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Following the Tesla Q3 report and Elon Musk's goal to replace the combined value of Apple and Sauid Aramco, comes the CEO of Xiaomi with his own predictions. Lei Jun wants his company to join the world's largest automaker and sell 10 million electric cars a year with the global top 5 on his mind.
According to the Xiaomi CEO, the world's top five brands will have more than 80% market share and for Xiaomi to succeed, it has to be in that group. However, the entry ticket is priced at 10 million units per year. Lei Jun argues that a car is no longer a car, but a form of electronic goods with software and user experience at the core of their services.
Lei Jun went on to say that he saw cars evolve from mechanical goods to consumer electronics, he went on to say that electric cars are much more complicated than gasoline-powered vehicles, and that battery costs have fallen by 80 percent in the last decade alone, with cost reductions of 50 percent. further is still possible.
His opinion is an indirect response to some experts who think that Xiaomi is too late to race, with Tesla getting better 10 years down the road. But Lei Jun claims the race is just getting started and Xiaomi will have plenty of chances to catch up.
Can Xiaomi really make it work, can it be a successful EV manufacturer? Of course, there's no question about that. Can it sell 10 million cars every year? There's no reason why not, with a $10 billion development budget, the company is sure to put in a solid effort.
The first factory for the upcoming Xiaomi EV is being built in Yizhuang, China. Its production capacity is 300,000 units. The company wants to achieve mass production by 2024 with 150,000 cars produced in the first phase next year. But Xiaomi will need 30 such factories to get 10 million cars per year and even with its budget and speed - it will take a very long time.
The idea that cars are becoming more like electronics is not new, it has been tried before by several companies and failed. Even Tesla, despite its push into software and user experience, can't forget the pure pleasure of driving. While many of us enjoy our moments of autonomous driving, we tend to prefer to take control. Sure - we let the car do boring things like park itself and keep us safe, but we still love driving.
Then there is the car design. By comparing cars to consumer electronics, is the CEO trying to say that we are heading towards a uniform design, with slight differences? That's not going to happen, cars have always been an emotional part of our lives and forever will be. Yes, they are a means of transportation but we attach feelings and personalities to them, we call them names and tap them on the dashboard when they perform well. Or kick the tire when it breaks. We don't do that on our microwaves or TVs, do we? Although, we are connected to our phones...