Transcript of Lei Jun's interview: "Reduced the price by 30,000 yuan the day before the launch event"

21.59 million yuan, Xiaomi SU7 starting price announced. This puzzle that has been the most curious since Xiaomi announced its entry into the car-making industry has finally been revealed.

After the price was announced, "Xiaomi SU7 price" and "Lei Jun Thunder God" surged to the top two hot searches on Weibo. Some netizens sighed that not only car enthusiasts and car model enthusiasts, but even gaming groups, anime groups, and other WeChat communities were watching the Xiaomi SU7 launch event.

Video blogger Jianghu Observation found that Xiao Ai speakers crashed because of the Xiaomi SU7 launch event. "Lei Jun mentioned Xiao Ai several times in his speech... Many people's Xiao Ai was awakened, but because too many devices were awakened, the server crashed."

Just 4 minutes after the release of Xiaomi SU7, over 10,000 units were pre-ordered; 7 minutes, over 20,000 units; 27 minutes, over 50,000 units.

"My colleague told me that 100,000 people joined the wish list in the first minute." Xiaomi founder Lei Jun said in a media interview after the launch event that the most difficult decision during pricing was the breakeven point. The breakeven point for Tesla Model 3 is 223,000 yuan, Xiaomi originally wanted to set it at 239,000 yuan, with the top configuration priced at 350,000 yuan.

"We started discussing yesterday (March 27) at 7 o'clock, I said can we make it 30,000 cheaper than Tesla."

Xiaomi SU7 was born into the competitive field of new energy vehicles.

The price range of 200,000 to 300,000 yuan is the most focused by consumers and the most fiercely competitive price range for new energy vehicle brands. Every brand is constantly innovating, trying to seize the high ground in the market with faster speed, higher efficiency, more advanced technology, and more favorable prices.

At the beginning of 2024, the price war in the automotive industry escalated, with large models "massively" entering the market, and automotive industry leaders frequently exchanging barbs over smart driving technology.

BYD used the "Honour Edition" to reduce the prices of multiple models by another 20,000 to 30,000 yuan, with the price of the BYD Han EV dropping to 180,000 yuan. Li Auto's L7 and L8 Air versions were reduced by 18,000 yuan, Nio indirectly reduced prices with the Baas solution. Since March, about 20 models have successively announced price reductions.

The automotive industry is a large-scale industry, and Tesla and BYD, two companies that initiated price wars in 2022 and 2024 respectively, are reducing costs and increasing efficiency through economies of scale. Taking BYD as an example, under the influence of the price war in 2023, the gross profit margin of the automotive sector did not decrease but increased to 23%.

Now, most car companies on the market have initially completed "building high walls and accumulating grain". Lei Jun wants Xiaomi SU7 to be in the top three of luxury electric sedans, meaning that selling 5,000 units per month will be the passing line for Xiaomi SU7.

According to driving data, in February this year, the top three in sales of luxury electric sedans priced above 200,000 yuan were Tesla Model 3, BYD Han EV, and ZEEKR 007, with sales of 8,000 units, 6,000 units, and 4,000 units respectivelyCurrently, Xiaomi SU7 not only competes directly with Tesla Model 3, BYD Han EV, ZEEKR 001, ZEEKR 007, XPeng P7 and other established players, but also needs to stay vigilant at all times to guard against being "encircled" by many sub-brands of various car companies and new series.

For example, Geely Auto launched the "Galaxy" series last year, focusing on the price range of 150,000 to 300,000 yuan, and will introduce 7 models within the next two years. Another example is Nio's long-awaited second brand "Ledao", positioned in the 200,000 to 300,000 yuan household market, expected to be announced in mid-May, with the first model to be launched in the third quarter of this year and delivered in the fourth quarter.

Every future product launch event could change the competitive landscape, and every technological innovation could trigger a reshuffling of the market.

The following is the content of Lei Jun's media interview, compiled by "Deep Web" based on public information released by Weibo car blogger Chang Yan and others:

1. About Pricing: Xiaomi SU7 is 30,000 yuan cheaper than Tesla Model 3

For Xiaomi, the real dilemma is our breakeven point. The breakeven point for Model 3 is 223,000 yuan, and Tesla is really worth learning from.

Originally, we were considering pricing it at 239,000 yuan, but later found that it became a nationwide pricing movement. We started discussing it yesterday at 7 o'clock. I said, can we make it 30,000 yuan cheaper than Tesla? If not, we can put a car in front of Tesla's door for everyone to see. Of course, we won't do that.

In the end, we are 30,000 yuan lower than the global benchmark Model 3, starting with a 30,000 yuan reduction as a gesture of respect.

The top configuration was initially priced at 350,000 yuan. 350,000 yuan is also a loss, but everyone said that the first year's production capacity is limited, so we lowered it first. This car is so good, everyone will definitely buy it with determination.

2. About Price Wars: Xiaomi has enough cash reserves to deal with competition in the next five years

Xiaomi has enough cash reserves to deal with any fierce competition in the next five years. If possible, Xiaomi will further accumulate cash.

Is there anything more intense than a price war in the mobile phone industry? We have been fighting to the death from day one. We spent so much money on one car, while others made a dozen cars. I don't understand. Look at Tesla, 3Y, SX, Cybertruck, they have made these popular products in twenty years, but it doesn't affect their success.

(Whether consumers accept Xiaomi SU7) will be known in the next 24 hours, my colleague told me that 100,000 people joined the wish list in the first minute.

We have been in the mobile phone industry for so many years, we are aware of the cruelty. The price war is just one aspect, more importantly, it's the technology war and ecosystem war. As you can see, we have few competitors within 500,000 yuan, I am quite satisfied myself, I believe anyone who likes cars will like Xiaomi SU7.

3. About Competitiveness: Intelligence is Xiaomi's strength

All intelligence is variable, I think this is Xiaomi's strength, the difference between intelligent cockpit and intelligent driving is quite significant.

First, we make the system so smooth, we are one of the best. Second, it is so user-friendly, seamlessly integrated with our phones, which people who don't do this can't understandOur compatibility is very good because we have taken many detours in the past. Many manufacturers value these two aspects, but there are not many who truly excel in them, we have compared.

Of course, I think Nio, Huawei, and Xiaomi are a step above others, with Xiaomi being one of the best, because we came later and must do well.

That's why I paid tribute to them last year, because making cars is really not easy, they are really remarkable, you wouldn't know until you try.

Chip supply is our strength. We need to produce so many phones, TVs, and other things. In the first phase alone, we need millions of chips. We are the sixth largest chip purchaser globally, a major customer everywhere. Some friends from car companies also ask us to help expedite deliveries.

Today's smart cars are essentially cars plus electronics, and we have an advantage in electronics with Huawei.

Four, About Ecology: The ultimate understanding of ecology is full-house intelligence

My ultimate understanding of ecology is full-house intelligence, where the underlying software and chips are fully integrated, whether at home or in the car.

For example, a fragrance machine can also be used at home, many of our products are designed to be used in cars or at home, such as Xiaomi tablets, which can also be used in cars.

The ability of Xiaomi's full ecosystem is gradually being applied to cars, which is our greatest competitive advantage.

Five, About AI: In the future, all cars will be powered by AI.

Xiaomi started working on AI in 2016, when it released Xiao Ai. Last year, we upgraded our technology perspective, requiring AI in all applications.

In Xiaomi SU7, we combined large models, such as the cool features you see, but I couldn't figure out why we need to do document-to-image or document-to-video in the car.

The second is our parking assistance, where cameras may find it difficult to discern a precision of 5cm. Perception decision-making large model end-to-end, we are the first in the world to use it.

I think AI is revolutionary for smart driving. If you ask a supplier to do smart driving, they can't keep up. Now you see Huawei, Nio, all self-developing, for traditional car companies, they may have to spend a lot of money to do such things. In the future, all cars will be powered by AI.

Another example is using AI for large die-casting materials, previously people had to try one by one, now AI can quickly find 5-10 options, and then we find the right one, the effect is very good, many drugs are also developed this way.

Six, Xiaomi's car model has been overturned twice

The most frustrating thing was when we announced in 2021 that we would make cars, we spent a year designing them, very avant-garde, made two models, but everyone thought they were too avant-garde and worried they wouldn't be accepted, so we scrapped them all.

If we made a Cybertruck as our first car, you would definitely scold me. We positioned our direction to create products that can withstand the test of time.

Starting in 2022 (with the third model), we are moving quickly, and I am involved in every detail. I said the car must look good, it must be stunning. Some details may not look familiar at first glance, but after looking at them for a while, you will find them attractive. For example, many people think the rear of the car is not good-looking, because many photos are taken from a low angle, but not many people will crouch down to look at itNew energy vehicles are very popular, many cars are like SUVs, I think the SU7 is definitely among the best.

Seven, Apple and Huawei do not make cars, Xiaomi also breathes a sigh of relief

If I were Apple, I wouldn't give up. I think this is a project that cannot be abandoned, and it is not contradictory to AI. Of course, if they don't do it, we can also breathe a sigh of relief. Let Xiaomi be the first choice for Apple products, that is my goal now.

Eight, grateful for Beijing's support, looking to cooperate with Great Wall in the future

We are a Beijing-based company, and we are very grateful for Beijing's support. In February, we built a mobile phone factory in Changping, and in March, we built a car factory in Yizhuang. We chose to be next to Mercedes-Benz, and two-thirds of our suppliers are BBA's suppliers. This is driving industrial upgrading.

If the four car companies in Beijing unite, intelligent manufacturing in Beijing can be upgraded. There is also the integration of Beijing-Tianjin-Hebei, today Wei Jianjun (Chairman of Great Wall Motors) also came, and we also want to cooperate with Great Wall.

Author: Cheng Xiaoyi, Source: Tencent News on the Deep Web, Original Title: "Lei Jun Interview Transcript: 'Reduced the price by 30,000 the day before the launch event' | AI Light Years"