On the evening of the 27th, Xiaomi held a grand launch event for its Xiaomi 15 Ultra and Xiaomi SU7 Ultra in Beijing, captivating both Xiaomi fans and onlookers. At the event, Xiaomi unveiled a myriad of high-end products, including the 'Night God'-nicknamed 15 Ultra phone and the Xiaomi SU7 Ultra car, marking a significant push into the 'full ecosystem of people, cars, and homes'.

Just prior to the launch, Xiaomi Group's share price performance was noteworthy, surging over 4% intraday, propelling the company's market value past the HK$1.4 trillion mark. This also saw a spike in Lei Jun's personal wealth, earning him the nickname 'Leibusi' in China, though Lei Jun swiftly dismissed the moniker. While Xiaomi's share price retreated later in the day, and 'Leibusi's' status as the richest man fleetingly passed, this did not dampen the public's curiosity and anticipation for 'Leibusi' and his Xiaomi endeavors.

A year ago, Xiaomi SU7 was a newcomer in the automotive industry. Now, the SU7 series has evolved to the Ultra version, showcasing an astonishing pace of innovation. This year, Xiaomi has further ambitions, officially entering the prestigious Nurburgring market, a significant stage in the automotive world.

Concurrently, Xiaomi phones have been advancing rapidly, successfully penetrating the high-end market with the 'Night God', shattering the perception of Xiaomi being merely 'economical'. These strategic deployments have sparked debates among Xiaomi's critics and fans alike, questioning whether Xiaomi's foray into car manufacturing is merely 'a dream of Leibusi' or the dawn of a new era.

I. Why Enter Car Manufacturing

1. Vision of a Full Ecosystem of People, Cars, and Homes

Despite Xiaomi's successful phone business, why venture into car manufacturing? Even now, Xiaomi phones rank among the top in sales.

Put simply, Lei Jun harbors a dream to realize Xiaomi's high-end strategy. In 2023, Xiaomi officially upgraded its group strategy to focus on the 'full ecosystem of people, cars, and homes', a path to differentiation through a combination of software and hardware.

This is Xiaomi's grand plan for car manufacturing and Lei Jun's final major entrepreneurial project.

Moreover, amidst the rapid development of the technology industry, the interconnection of all things is inevitable, and the integration of smart homes, smart cars, and smart devices is a natural progression. Xiaomi, with its deep roots in the AIoT field and a rich intelligent hardware ecosystem, boasts over 100 million monthly active users on the Mijia App, demonstrating a robust user base and ecological potential. Failing to harness these resources would be uneconomical, necessitating an efficient utilization strategy to achieve high-end goals.

Thus, cross-border car manufacturing becomes a crucial step for Xiaomi to complete the closed loop of its 'full ecosystem of people, cars, and homes'. However, due to the challenge of reversing the 'low-price' perception of its mobile phone business, netizens have been joking, urging Xiaomi to produce a 99,000 yuan car since the announcement of its automotive venture. Committed to high-end positioning, Xiaomi refuses to fall back into the low-price trap.

2. Xiaomi's High-End Positioning

Long considered the epitome of cost-effectiveness, Xiaomi also aspires to high-end positioning. This journey has spanned five years.

In the global high-end market, traditional luxury brands and emerging tech giants dominate, with Apple and Huawei consistently occupying the top two spots in high-end mobile phone market share. For Xiaomi to secure a slice of this market, a breakthrough in high-end positioning is imperative.

Therefore, Xiaomi must be bold and take decisive steps. Its first electric car is positioned as high-end, benchmarking Tesla and aiming at Porsche; the second car takes an even bolder step, aiming to redefine luxury in China.

It's no surprise that last night's 'Xiaomi Night' launched high-end products like the Xiaomi 15 Ultra and SU7 Ultra. This not only significantly elevated Xiaomi's brand image but also increased its brand value.

The SU7 Ultra's unveiling surprised many. Lei Jun stated that SU7 benchmarks the Model 3, leading to speculation that Xiaomi's second car would be an SUV. However, it turned out to be a million-yuan luxury performance car.

Market data reveals that the launch of Xiaomi SU7 Ultra caused a stir. Its pre-sale price dropped from 814,900 yuan to 529,900 yuan, a reduction of 285,000 yuan, akin to a 'diving' price cut! This price reduction had a substantial impact; within just 2 hours, order volume surpassed 10,000 units, soaring like a rocket. This significantly enhanced the product's cost-effectiveness perception and posed a considerable threat to traditional luxury brands, signaling a potential 'reshuffle of the high-end market' for Xiaomi.

Beyond price, Xiaomi's technological innovation is also impressive. With a three-motor system of 1548 horsepower, SU7 Ultra achieves a 0-100 km/h acceleration of 1.98 seconds, making it the fastest four-door mass-produced car globally. This speed offers an exhilarating driving experience. The launch of these high-end products not only elevated Xiaomi's brand image but also increased its profit margins, solidifying its high-end positioning journey while intensifying pressure on competitors.

II. Dual-Engine Strategy of Phones and Cars Escorting Xiaomi's High-End Journey

1. Car Manufacturing is Hot, Phone Business is Cold

Despite Xiaomi's electric car success, its strategy remains the 'phone + car' dual-engine approach, with both sectors driving growth. Currently, electric cars and mobile phones are at the forefront of technology, but market dynamics inevitably lead to one being hotter than the other. Therefore, the dual-engine strategy not only boosts Xiaomi's high-end positioning but also provides a stable dual insurance policy.

(1) Growth Potential of the Automobile Market

The new energy vehicle market is experiencing explosive growth. Taking Xiaomi SU7 in 2024 as an example, since its launch on March 28, sales have continuously risen, with deliveries exceeding 10,000 units for five consecutive months. In October, deliveries surpassed 20,000 units, and in November, the annual delivery target of 100,000 units was achieved ahead of schedule. These data underscore the strong demand in the new energy vehicle market, offering Xiaomi vast growth potential. The pre-sale performance of Xiaomi SU7 Ultra is also noteworthy. After the pre-sale price dropped from 814,900 yuan to 529,900 yuan, order volume exceeded 10,000 units within 2 hours. This reflects not only high consumer recognition of the Xiaomi brand but also the strong appeal of the new energy vehicle market.

(2) Saturation of the Mobile Phone Market

At the launch event, Lei Jun announced the phone business's performance, which has consistently ranked among the top three global mobile phone market shares for 15 months and returned to the top two in the domestic market in January 2025, indicating Xiaomi's mid-to-low-end phone fundamentals remain stable in the short term.

However, the high-end mobile phone market share was not disclosed, suggesting Xiaomi's momentum in this segment is insufficient.

According to Q3 2024 data from Canalys, in the Chinese mainland market, the high-end smartphone (above 600 USD) market share ranking is Apple (52%), Huawei (33%), Honor (5%), Xiaomi (3%), and vivo (3%). The data reveals that Xiaomi still has a long way to go compared to Apple and Huawei. Thus, in the high-end market, Xiaomi is still playing catch-up.

The launch of the Xiaomi Ultra Night God series may be Xiaomi's masterpiece, but changing the perception of being economical overnight is challenging. We eagerly await its subsequent performance.

2. Coordinating Effect of the Dual-Engine Strategy

Xiaomi chose the 'phone + car' dual-engine strategy aiming for the synergistic effect of '1+1>2', clearly aimed at boosting its high-end positioning.

On one hand, phones and cars mutually drive traffic, leveraging Xiaomi's vast user base and brand influence to promote automotive product market penetration. For instance, Xiaomi SU7's market performance benefits from the conversion of Xiaomi mobile phone users, who serve as a 'potential treasure trove' for automotive products, consistently generating orders.

On the other hand, the dual focus on high-end phones and high-end cars significantly enhances Xiaomi's overall brand image. For example, the retro camera design of Xiaomi 15 Ultra and the high-performance of Xiaomi SU7 Ultra are like two shining stars, jointly reinforcing Xiaomi's brand image of 'technology for all'. This brand synergy not only deepens users' recognition of the Xiaomi brand but also gives Xiaomi a unique advantage in the high-end market competition, jointly propelling the advancement of Xiaomi's closed loop of the 'full ecosystem of people, cars, and homes'.

III. A Car Manufacturing Dream

1. Xiaomi's High-End Challenges

Despite technological progress, Xiaomi faces challenges on its high-end journey.

Firstly, core automotive technologies like autonomous driving and battery technology require substantial investments in manpower, material resources, and finances. While Xiaomi's self-developed CTB integrated battery technology excels in performance, its R&D and production costs are high. It's a double-edged sword, bringing both technological advantages and cost pressures. Achieving cost reduction and efficiency enhancement is a formidable task.

Secondly, cultivating user perception of Xiaomi's high-end positioning in the automotive field cannot be achieved overnight. While SU7 Ultra's performance and design meet high-end standards, consumers' perception of traditional luxury brands is deeply ingrained. At the same price point, more consumers might lean towards Tesla rather than Xiaomi, questioning the latter's credentials.

To change this perception, Xiaomi needs to gradually build its brand and market promotion. This is a 'cognitive battle' requiring substantial effort and marketing investment.

Moreover, market competition is fierce. Facing rivals like Tesla and NIO, Xiaomi must differentiate itself to attract consumers. For instance, Xiaomi SU7 Ultra successfully appeals to performance enthusiasts through its high-performance motors and race-level configurations. However, Xiaomi must continue innovating in areas like intelligent driving and intelligent cockpits to meet the increasing demands of high-end users. Thus, on this high-end path, Xiaomi faces both opportunities and challenges.

2. Xiaomi's High-End Outlook

Technological innovation is the core driving force for Xiaomi's future. The company will undoubtedly increase R&D investments to build core technological competitiveness.

For example, Xiaomi's self-developed super motor V8s boasts a speed of up to 27,200 rpm, setting a new record for global mass-produced motors. This technology is groundbreaking. Furthermore, Xiaomi plans to launch more high-performance models, like the Nurburgring limited edition SU7 Ultra priced at 814,900 yuan, to further bolster its brand influence in the high-end market.

Improving user experience is also a priority for Xiaomi. Through intelligent cockpits and autonomous driving technology, Xiaomi aims to provide users with more convenient and intelligent travel experiences. For instance, Xiaomi SU7 Ultra is equipped with an advanced intelligent driving system supporting L3-level autonomous driving functions, enhancing driving ease. Additionally, Xiaomi will achieve deep integration of mobile phones, cars, and smart homes through ecological fusion, creating a 'full ecosystem of people, cars, and homes' to make users' lives smarter, more convenient, and more appealing.

In summary, although Xiaomi's car manufacturing journey presents many challenges, with continuous investments in technology, brand, and user experience, it stands a strong chance of securing a place in the high-end automotive market.

This car manufacturing dream may seem far-fetched, but it could very well be the dawn of a new era for Xiaomi. Xiaomi's Technology Night might truly evolve into a continuous 'Technology Spring Festival Gala'.