Lei Jun: Xiaomi’s First Car Involves 3,400 Engineers and R&D Costs Exceed 10 Billion Yuan

On December 18th, during an interview on CCTV’s program ‘One On One’, Lei Jun, the founder of Xiaomi Group, discussed the experience and current situation of Xiaomi‘s automotive venture.

When the host mentioned that Musk had previously stated that it would be interesting competition if Xiaomi entered the electric vehicle market, Lei Jun’s response was that Xiaomi has many natural advantages in making cars because today’s smart electric vehicles are essentially an integration of the automotive industry and consumer electronics industry.

‘A chairman of a car company told me that smart electric vehicles are essentially large smartphones with four wheels, indicating the high level of integration between these two industries.’ Therefore, he believes that Xiaomi‘s entry into the automotive industry poses challenges but overall manageable difficulty.

Lei Jun claimed three years ago that he thought building cars was a ‘quite difficult’ task and had enough awe for it. Therefore, he established the principle of ‘adhering to the norm while surprising,’ which means fully respecting the rules of the automotive industry, using mature technologies in the industry to ensure the first car is well-made, and then innovating based on this premise.

In addition, Lei Jun has also decided to adopt a strategy of ‘ten times the investment’. He gave an example that while traditional car companies typically invest 300 to 400 people and 1 billion to 2 billion yuan in funds to produce a car, Xiaomi‘s first car involved a total investment of over 3,400 engineers and research and development costs exceeding 10 billion yuan (approximatly $1.4 billion), which is ‘more than ten times the investment’.

‘After having such confidence, anyway, I did it with a determined attitude,’ said Lei Jun. However, he also expressed concerns about the sales of Xiaomi cars, fearing that ‘they might not be popular at first and no one would buy them’ and worrying that ‘everyone might want to buy them but have to wait for one or two years.’ There are various anxieties behind this.

Facing the current situation of overall macroeconomic pressure at home and abroad, is it too risky for Xiaomi to invest heavily in research and development? Lei Jun’s view is that the more investment is made in difficult circumstances, the easier it is to achieve results, and it also prepares for the recovery of the entire market.

The financial report shows that Xiaomi Group’s total revenue in the third quarter reached 70.9 billion yuan (approximatly $10 billion), a slight increase of 0.6% year-on-year. Despite the small growth rate, it signifies that Xiaomi has finally ended its six consecutive quarters of declining performance and returned to growth.

At present, the plan for mass production and release of Xiaomi‘s car in the first half of next year has not changed. The overall preparations before its launch have become more complete.

SEE ALSO: Xiaomi’s First Car Aims to Ship 300 Units in December, with Preparations Underway for the Exhibition Vehicles

On November 15th, the Ministry of Industry and Information Technology released the latest batch of announcements on road motor vehicle production enterprises and products. Two models of ‘Xiaomi brand’ battery electric sedans were included, which means that Xiaomi‘s preliminary work on its car has finally received official recognition in terms of procedures.

According to public information, Xiaomi‘s first car model has two power battery versions: one is equipped with a lithium iron phosphate battery from FinDreams and the other is equipped with a ternary lithium battery from CATL. The models are available in both single-motor and dual-motor configurations. Among them, the ternary lithium battery version adopts an 800V high-voltage platform. In terms of battery capacity and range, the FinDreams lithium iron phosphate battery version has a capacity of 73.6 kWh and a range of 628km/668km; while the CATL ternary lithium battery version has a capacity of 101 kWh and a range of 800km/750km.