With a new department in charge, Lei Jun is ready to bet once again

Author | Zhou Zhiyu

Editor | Zhang Xiaoling

Since the car accident in Chengdu in October, a storm has swept through Xiaomi Automotive, forcing Lei Jun to reassess and adjust the company's organizational structure.

At the end of October, Xiaomi Automotive announced an organizational restructuring. This round of adjustments established a brand new first-level department—the Architecture Department. This department is personally led by Xiaomi Group founder Lei Jun. Insiders confirmed this change to Wall Street News.

In the industry, forward-looking technological considerations are often undertaken by second-level departments, led by technical heads. Xiaomi's move elevates the Architecture Department to the core of the company's strategy, ensuring its absolute authority and resource mobilization capability within the company, allowing it to set technological directions 3 to 5 years in advance, independent of specific product development cycles.

The new department is responsible for the strategic thinking of the next-generation technology architecture for smart electric vehicles. Its members include some heads of R&D departments and core personnel. A key personnel change is that Cui Qiang, the former head of vehicle R&D, has entered the Architecture Department, with his previous position taken over by Wang Zhensuo, the former head of electric power.

Behind this adjustment is also a reflection of Xiaomi Automotive's journey from the initial launch of new cars receiving "immense wealth" to now facing market skepticism.

From March in Anhui to October in Chengdu, two widely publicized serious traffic accidents have led the public to scrutinize Xiaomi under a "magnifying glass." With the immense halo of the founder's IP and the successive popularity of two products, Xiaomi is attempting to re-anchor its safety coordinates in the red ocean market through organizational restructuring.

Architecture has become a key element in Xiaomi's transformation.

Xiaomi Automotive has achieved phenomenal success, largely due to the market's immense trust in founder Lei Jun's personal brand. In the first nine months of this year, Xiaomi Automotive delivered a total of 266,722 vehicles, with a target of delivering 350,000 vehicles by 2025.

However, this highly personalized brand bundling model has turned into a heavy liability in times of crisis.

Whether it was the inability to open the door and battery explosion after the Xiaomi SU7 collision in the Anhui accident, or the inability to open the door during the rescue attempt in the Chengdu accident involving the Xiaomi SU7 Ultra, the core controversies of these accidents have struck at the most sensitive safety nerves of users in the era of new energy vehicles.

These two accidents have somewhat affected consumer perceptions of Xiaomi Automotive. Four days after the Chengdu accident, Lei Jun devoted a significant portion of a speech to criticizing "internet water armies," rather than soothing public safety anxieties, a move criticized by the outside world as avoiding the main issue and shifting focus.

In the smartphone field, defects are an inconvenience; in the automotive industry, defects can threaten lives. There exists an implicit social contract between automobile manufacturers and the public, requiring companies to maintain absolute transparency and honesty when it comes to safety issues.

The most direct impact of the accidents is that models like the Xiaomi YU7 have encountered a cooling market in the second-hand market, with their order transfer prices dropping from over 10,000 yuan earlier to around 2,000 yuan on second-hand platforms. Some used car dealers have stated that compared to before "October 1st," the transfer cycle for second-hand Xiaomi cars has significantly lengthened Li Yanwei, an expert member of the China Automobile Circulation Association, also stated to Wall Street News that the two incidents are the trigger points for Xiaomi's current situation in the used car market.

How to repair Xiaomi's current reputation is a pressing issue that Lei Jun needs to address.

Li Yanwei pointed out that Xiaomi should take technical measures regarding safety to make consumers feel more at ease when using Xiaomi cars. Not responding will only exacerbate users' suspicions and public attention.

At a critical juncture in Xiaomi's development, Lei Jun personally leading the core business has become a familiar script. Whether it was taking over the struggling mobile phone department in 2016 or serving as the president of the China region in 2019, he always chooses to stand on the front line when the company faces severe challenges.

This time, personally leading the structure department is also sending the strongest signal to both internal and external parties: defining the next-generation technical architecture is currently the highest priority strategic task for Xiaomi cars.

As the foundation and "operating system" of modern car companies, architecture fundamentally determines the cost, efficiency, speed of car manufacturing, as well as the intelligence level and safety baseline of the final product. Tesla's ability to crush traditional car companies in the new energy sector is also due to its innovative architecture, which has given it a technological edge.

Having achieved initial success in the new energy market, Xiaomi, now caught in a storm, also needs to find breakthrough points.

For Xiaomi cars, establishing the structure department is just the beginning of reconstruction.

Looking globally, the competition in electric vehicles has converged. Tesla's deep vertical integration capabilities in software and core chips, along with BYD's strong hardware control in the three-electric system and vehicle manufacturing, constitute its core barriers. In the safety-first automotive industry, without a solid underlying technical architecture as support, it is difficult to go the distance.

Xiaomi's new structure department needs to build the next-generation car based on its new architecture—its mission goes far beyond just becoming a good car. It must become a powerful symbol, proving to the market and consumers Xiaomi's new commitment to safety and engineering quality, which will be the primary, and possibly the only effective tool for Xiaomi to rebuild trust.

This crisis also forces Xiaomi to re-examine its successful "cost-performance ratio" philosophy. In the consumer electronics field, functionality and configuration can talk about "cost-performance ratio"; however, in the automotive world, the most important "configuration" is safety, which leaves no room for compromise.

In the century-old automotive industry, there has never been a shortage of challengers who gained fame through marketing, but only those who hold absolute respect for manufacturing and safety can thrive in the long run.

If safety cannot be truly ingrained, then Lei Jun's final battle, along with the boast of being "among the top five globally," will likely be nothing more than "a moon in the water," a fleeting dream.

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