The first electric car Xiaomi SU7 and the company's technologies are officially presented. But how much did it cost to develop the car? This was revealed directly by the co-founder of Xiaomi, Lei Jun.
Xiaomi SU7 employs up to 3400 engineers
Just a few days ago, the CEO of Xiaomi was a guest on the CCTV program "One On One". In it, he mainly discussed the topic of electromobility and its connection to Chinese society.
Today marks the 1000th day since we announced our entry into the EV industry. I'm excited to share that our journey is taking a major step with the Xiaomi EV technology launch, coming December 28th.
In the early days, the EV team and I had a marathon session for three days...
- Lei Jun (@leijun) December 25, 2023
And when the moderator asked him a question about Elon Musk saying that it would be an interesting competition if Xiaomi entered the electric vehicle market, Lei Jun countered that Xiaomi has a lot of natural advantages in making electric cars, given the fact that that today's smart vehicles are essentially a cross between the automotive industry and the consumer electronics industry.
"The chairman of an automobile company told me that smart electric vehicles are basically big smartphones with four wheels, which indicates a high level of integration between the two industries," Lei Jun told CCTV.
Investment at the level of 10 billion yuan
If we go back three years, during this period, Jun claimed that building cars is quite a difficult task and he had enough respect for the industry. He was committed to complying with the standards and at the same time wanted to surprise in terms of the use of advanced technologies in the automotive industry.
In addition, Lei Jun decided to accept the so-called "ten times the investment" strategy. As an example, he said that traditional car companies usually invest about 300-400 employees and 1-2 billion Chinese yuan as a fund to produce a vehicle.
Based on this assumption, the first vehicle from Xiaomi is being developed by more than 3400 engineers. And research and development costs amount to an incredible 10 billion yuan. For comparison, this sum amounts to approx. 1,3 billion euros. It thus represents more than ten times the investment and production fund compared to a traditional car company.
“After such trust, I did it with a determined attitude.” Lei Jun continued. However, he also expressed concern about the sale of Xiaomi electric cars, because "they may not be popular at first and no one will buy them." But, on the contrary, he also worried that "everyone might want to buy them, but they will have to wait one or two years (for delivery)."
The Chinese manufacturer broke the period of decline
Given the current situation of overall macroeconomic pressure in China as well as abroad, is it too risky for Xiaomi to invest heavily in research and development? Lei Jun is of the opinion that the larger the amount invested in difficult conditions, the easier it is to achieve the expected results. And along with that, the revival of the entire local market.
We also have information from the financial report. They revealed that Xiaomi Group's total revenue in the third quarter reached 70,9 billion yuan (about 10 billion US dollars), a slight year-on-year increase of 0,6%. Despite the small growth rate, this means that Xiaomi has finally ended six consecutive quarters of declining performance and returned to growth.
In addition, at present, the plan for the mass production and launch of sales of the Xiaomi car during the next year 2024 does not change. The overall preparations before its launch were completed with a press conference. We have mapped it for you in a separate article.
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