Author | Wang Xiaojuan

Editor | Zhou Zhiyu

The traffic myth of Xiaomi and Lei Jun continues.

On the first anniversary of the debut of Xiaomi, Lei Jun announced that the Xiaomi SU7 has delivered a total of 0.13 million new cars over the past 9 months. This speed of delivery has surpassed all previous new car builders.

However, Lei Jun has bigger plans. Over the past six months, he has continued to upgrade the big model track. Recently, Lei Jun even recruited Luo Fuli, one of the key developers of DeepSeek's big open source model DeepSeek, with an annual salary of 10 million. According to reports, Luo Fuli will lead the Xiaomi AI Big Model Team.

Vehicle construction achieved phased results. Combined with Lei Jun's attack on the AI model, Xiaomi's stock price exceeded HK$34 per share, which is close to the highest level in history. Since this year, Xiaomi's Hong Kong stock has risen by more than 120%, leading the way for Hang Seng Technology's constituent stocks.

Next, if it can achieve a breakthrough in the AI big model battle, Xiaomi can also further open up room for imagination in terms of valuation and match Tesla. This means that Lei Jun is also expected to create another miracle, and his dream market capitalization of trillion dollars is just the beginning.

Of course, for Xiaomi, how to maintain financial balance when both the automobile and AI businesses are burning money also requires making trade-offs. It's going to be a tough battle.

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In the past year, if new cars were to be ranked according to traffic, if the Xiaomi SU7 were to be called second, no one dared to call it first.

Since its debut on December 28 last year, the Xiaomi SU7 and Lei Jun themselves have always been at the top of the traffic. Basically, it only takes a little bit of hustle and bustle to become popular.

Lei Jun is also very successful in becoming an influencer. Before the release of the Xiaomi SU7, Lei Jun was already considered an entrepreneur with a high number of fans. However, this year, Lei Jun's fans reached the next level. Taking the Douyin platform as an example, Lei Jun's number of fans has risen from more than 6 million at the beginning of the year to over 36 million today, surpassing the number of professional influencers who rely on traffic.

This year, Lei Jun also joined Yu Chengdong, executive director of Huawei and chairman of Smart Car Solution BU, to push many car owners out of the mountain and make live streaming testing of their cars by car riders a daily routine.

Xiaomi can become a top class, and the support of the entire network is indispensable.

In terms of product strength, this car has been frequently verified by the market. The appearance is online, and the quality has passed the standards.

Some time ago, a car owner and family in Henan drove a Xiaomi SU7 down a steep slope of 20 to 30 meters and were blocked by trees; although the car had been scrapped, none of the family members were in danger of life and only suffered minor injuries. For a while, the product power of the Xiaomi SU7 was praised by the entire network.

The success of the Xiaomi SU7 is also inseparable from Lei Jun's mature supply chain management. At first, Lei Jun's sales expectations for this car were not that high. From the 0.07 million vehicle planned at the earliest, to the annual target of 0.1 million vehicles and 0.12 million vehicles, to today's 0.13 million vehicles, Xiaomi's supply chain continues to follow suit. It can be said that the miracle of the Xiaomi SU7 was created together with supply chain companies.

The secret to success in resuming the Xiaomi SU7 today should be said to be that all aspects of the product, marketing, supply chain, etc. have not fallen out of the chain, and the results have stood the test.

With the help of the Xiaomi SU7, Xiaomi also handed over the strongest performance in history in the third quarter.

In the quarter, Xiaomi's revenue was 92.51 billion yuan, up 30.5% year on year, a record high; adjusted net profit was 6.3 billion yuan, up 4.4% year on year. By the end of the third quarter, the Xiaomi Group's cash reserves were 151.6 billion yuan, also a record high. Adjusted operating cash flow was 9.6 billion yuan.

In addition, Xiaomi's automobile business was also separately disclosed in the third quarter. Among them, the automotive business achieved revenue of 9.5 billion, accounting for 10.3%. It is worth mentioning that the gross margin of automobiles reached 17.1%. Compared with many of its predecessors in the automobile industry, this gross margin level is also relatively high.

However, the industry's more intense knockout competition continues. After the Xiaomi SU7, it also plans to release a second model next year. With the addition of subsequent models, the production capacity test will be even greater. Lei Jun will also have to work harder so that Xiaomi's sales can continue to increase.

Only by crossing the scale barrier can Xiaomi advance to the end with a stronger attitude.

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Xiaomi's series of performances that exceeded expectations were intuitively reflected in the capital market.

Since this year, Xiaomi's stock price has also been rising steadily, from HK$15.6 per share at the opening of the first trading day at the beginning of the year to HK$34.45 per share at the close of the penultimate trading day at the end of the year. The increase reached 121%. Xiaomi also became the company with the strongest increase in market capitalization this year.

At this point, Xiaomi's market capitalization has reached HK$864.5 billion, moving towards the target of a trillion HKD market capitalization.

The first battle of car building was successful, but Lei Jun's ambition did not stop there.

Lei Jun has always wanted the market to position Xiaomi as an Internet technology company rather than a traditional hardware company. However, since its launch in 2018, Xiaomi's main revenue and profits have come from mobile phones, home appliances, and IoT businesses rather than internet services. The price-earnings ratio (PE) also hovers around 14 to 30 times for most of the time.

Even though the overall market value of car construction has increased to a certain extent, the market basically estimates the market value based on the market sales ratio (PS) plus a certain premium.

After years of painstaking management, we have built a “whole ecosystem of people and cars,” and Lei Jun also wanted to find a gripper for Xiaomi to break through past restrictions. The key to this is AI.

In recent days, with news that Luo Fuli, one of the key developers of DeepSeek's big open source model DeepSEEK-v2, has been cornered by Lei Jun, Xiaomi's onslaught on the big model has become a hot topic of industry discussion.

Earlier, Lei Jun revealed that Xiaomi first began deploying AI in July 2016 and set up a dedicated big model team in April 2023. Recently, it was revealed that Xiaomi currently has 6,500 GPU computing power resources and plans to build a 10,000 card GPU cluster. Meanwhile, on November 12, Xiaomi's second-generation big model MiLM2 was officially unveiled.

Lei Jun not only made big models himself, but also invested in many large model companies through Shunwei Capital, such as Zhi Spectrum, Dark Side of the Moon, Baichuan Intelligence, and MiniMax. When recruiting talents, Lei Jun was in contact with many AI company executives, but compared to Byte, which is extremely rich, Xiaomi still needs to work hard in terms of talent reserves.

Since this year, various mobile phone manufacturers and many car manufacturers have used AI as one of the next driving forces.

Recently, after the MEGA crisis, Li Xiang, CEO of Ideal Auto, who had not appeared in the public eye for several months, had a rare live broadcast to talk about AI trends and set the ideal as an AI company.

For big manufacturers, the big model of “disrupting the game” is all about empowering the AI big model to bring greater growth; the same is true for Xiaomi. The same is true of Xiaomi. Xiaomi's hardware equipment will make its aggressive AI model useful and more competitive.

Compared to these friends and merchants, Xiaomi, as a company with a comprehensive layout of mobile phones, IoT, and automobile hardware, has its own hardware advantages. Whether AI can give products a better experience on this basis will be the key for Xiaomi to leave its competitors far behind in the next stage.

This is also the key to breaking the current AI model industry. In terms of software and hardware applications, it is necessary to find a specific path for commercial monetization.

If it breaks through the AI model, Xiaomi can become one of the brightest tech giants in the global market, just like Tesla. Since this year, Tesla's stock price has skyrocketed, also because it has made a breakthrough in the field of AI, rather than based on the valuation of a car builder.

The hardworking Lei Jun has always been on the cusp, but it hasn't always been the one at the center of the storm to reap the most dividends; now, after creating a miracle in the car, can Lei Jun, who has increased the size model, take Xiaomi to achieve this critical dragon gate leap? This is bound to be exciting.