Author | Wang Xiaojun
Editor | Zhou Zhiyu
The traffic myth of Xiaomi and Lei Jun continues.
On the first anniversary of the Xiaomi car's debut, Lei Jun announced that the Xiaomi SU7 has delivered a total of 130,000 new cars in the past nine months. This delivery speed surpasses all previous new car-making forces.
However, Lei Jun has even bigger plans. Over the past six months, he has been continuously increasing his investment in the large model track. Recently, Lei Jun even recruited Luo Fuli, one of the key developers of the DeepSeek open-source large model DeepSeek-V2, with an annual salary in the millions. It is reported that Luo Fuli will lead the Xiaomi AI large model team.
With the automotive sector achieving phased results and Lei Jun aggressively pushing AI large models, Xiaomi's stock price has exceeded HKD 34 per share, approaching its historical high. Since the beginning of this year, Xiaomi's Hong Kong stock has risen more than 120%, leading the Hang Seng Technology Index constituents.
In the future, if breakthroughs can be made in the AI large model battle, Xiaomi could further open up its valuation space, aligning itself with Tesla. This means that Lei Jun is also expected to create miracles again, and his dream of a trillion-dollar market value is just the beginning.
Of course, for Xiaomi, maintaining financial balance while burning money in both the automotive and AI businesses will require trade-offs. This will be a tough battle.
<h2>Miracle</h2>
In the past year, if we were to rank new cars by traffic, the Xiaomi SU7 would be second, and no one would dare claim the first position.
Since its debut on December 28 last year, the Xiaomi SU7 and Lei Jun himself have been at the top of the traffic charts, able to trend on social media with even the slightest movement.
Lei Jun has also been very successful in the influencer space. Before the launch of the Xiaomi SU7, Lei Jun was already considered a high-profile entrepreneur with a large fan base. However, this year, his followers have increased to a new level. For example, on the Douyin platform, Lei Jun's follower count has risen from over 6 million at the beginning of the year to over 36 million now, surpassing many professional influencers who rely on traffic.
This year, Lei Jun also collaborated with Richard Yu, Executive Director and Chairman of Huawei's Intelligent Automotive Solutions BU, to push many automotive executives out of their comfort zones, making live-streaming tests of their own cars a daily routine.
Xiaomi's rise to the top cannot be separated from the support of the entire internet.
From a product perspective, this car has been frequently validated by the market, with appealing aesthetics and quality assurance.
Previously, a car owner from Henan, along with his family, drove the Xiaomi SU7 down a steep slope of 20 to 30 meters, and after flipping over, they were stopped by trees; although the car was totaled, the family was unharmed, suffering only minor injuries. In no time, the product strength of the Xiaomi SU7 was praised across the internet.
The success of the Xiaomi SU7 is also inseparable from Lei Jun's mature supply chain management. Initially, Lei Jun did not have such high sales expectations for this car, starting from an initial plan of 70,000 units, then setting annual targets of 100,000, 120,000, and now 130,000 units, with Xiaomi's supply chain continuously following up. It can be said that the miracle of the Xiaomi SU7 was created together with supply chain enterprises.
Looking back at the success secrets of the Xiaomi SU7, it can be said that there were no shortcomings in product, marketing, supply chain, and other aspects, resulting in a product that can withstand the test
With the support of the Xiaomi SU7, Xiaomi delivered its strongest performance ever in the third quarter.
In this quarter, Xiaomi's revenue reached 92.51 billion yuan, a year-on-year increase of 30.5%, setting a new historical high; the adjusted net profit was 6.3 billion yuan, a year-on-year increase of 4.4%. By the end of the third quarter, Xiaomi Group's cash reserves amounted to 151.6 billion yuan, also a historical high, with adjusted operating cash flow of 9.6 billion yuan.
Additionally, Xiaomi's automotive business was disclosed separately in the third quarter. The automotive business achieved revenue of 9.5 billion yuan, accounting for 10.3%. It is worth mentioning that the gross profit margin for automobiles reached 17.1%, which is relatively high compared to many predecessors in the automotive industry.
However, the industry's more intense elimination competition is still ongoing. After the Xiaomi SU7, it plans to launch its second model next year, and with the addition of subsequent models, the test on production capacity will be greater. Lei Jun will also need to work harder to continue boosting Xiaomi's sales.
Only by crossing the threshold of scale can Xiaomi advance into the final stage with a stronger posture.
<h2>Disruption</h2>
A series of unexpected performances from Xiaomi's automotive sector is directly reflected in the capital market.
Since the beginning of this year, Xiaomi's stock price has been climbing steadily, rising from HKD 15.6 per share at the opening of the first trading day of the year to HKD 34.45 per share at the close on the second-to-last trading day of the year, an increase of 121%. Xiaomi has also become the company with the highest growth among the top ten internet companies by market capitalization this year.
As a result, Xiaomi's market capitalization reached HKD 864.5 billion, moving towards the goal of a trillion HKD market value.
Having achieved success in its first foray into car manufacturing, Lei Jun's ambitions do not stop there.
Lei Jun has always hoped that the market would position Xiaomi as an internet technology company rather than a traditional hardware company. However, since its IPO in 2018, Xiaomi's main revenue and profits have come from mobile phones, home appliances, and IoT businesses, rather than internet services. The price-to-earnings ratio (PE) has mostly hovered around 14 to 30 times.
Even though car manufacturing has provided a certain degree of uplift to its overall market value, the market has basically given valuations based on the price-to-sales ratio (PS) plus a certain premium.
After years of painstaking efforts to build a &#34;full ecosystem of people, cars, and homes,&#34; Lei Jun also needs to find a breakthrough for Xiaomi to break free from past constraints. The key to this is AI.
In recent days, with the news that Luo Fuli, one of the key developers of the open-source large model DeepSeek-V2, was poached by Lei Jun, Xiaomi's aggressive push into large models has become a hot topic of discussion in the industry.
Previously, Lei Jun revealed that Xiaomi began laying out AI as early as July 2016 and established a dedicated large model team in April 2023. Recently, it was reported that Xiaomi currently possesses computing resources of 6,500 GPUs and plans to build a large-scale GPU cluster. On November 12, Xiaomi's second-generation large model MiLM2 was officially unveiled.
Lei Jun is not only developing large models himself but has also invested in several large model companies through Shunwei Capital, such as Zhipu, Dark Side of the Moon, Baichuan Intelligent, MiniMax, and others. When recruiting talent, Lei Jun has approached several executives from AI companies; however, compared to the financially robust ByteDance, Xiaomi still needs to put in more effort in talent acquisition
Since the beginning of this year, various smartphone manufacturers and many automotive companies have identified AI as one of their key focus areas moving forward.
Recently, after the MEGA incident, Li Xiang, CEO of Li Auto, who had not appeared in the public eye for months, made a rare live broadcast to discuss AI trends and positioned Li Auto as an AI company.
For large companies, &#34;disrupting&#34; with large models means empowering existing businesses with AI large models to achieve greater growth; the same goes for Xiaomi, as its hardware devices will provide a platform for its aggressively pursued AI large models, making them more competitive.
Compared to these competitors, Xiaomi, as a company with a comprehensive layout in smartphones, IoT, and automotive hardware, has its own hardware advantages in entering the large model space. Whether it can leverage this foundation to enhance product experiences with AI will be key for Xiaomi to leave its competitors far behind in the next stage.
This is also crucial for breaking through in the current AI large model industry, finding specific paths for commercial monetization in software and hardware applications.
If Xiaomi can make breakthroughs in AI large models, it could become one of the most dazzling tech giants in the global market, just like Tesla. The surge in Tesla's stock price this year is also due to its breakthroughs in the AI field, rather than based on the valuation of a car manufacturing company.
All along, the diligent Lei Jun has stood at the forefront but has not been the one at the center of the storm reaping the most rewards; now, after creating miracles in the automotive sector, can Lei Jun, by doubling down on large models, lead Xiaomi to achieve this critical leap? This is bound to stir excitement

XIACY

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- Xiaomi's SU7 has achieved remarkable success, delivering 130,000 units in nine months, surpassing competitors in the electric vehicle market.  
- CEO Lei Jun's strategic focus on AI, including hiring key developers for their AI model team, aims to enhance Xiaomi's valuation and market position, potentially rivaling Tesla.  
- Despite financial challenges in balancing investments in both automotive and AI sectors, Xiaomi's stock has surged over 120% this year, reflecting strong market confidence in its growth trajectory.

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