[Fellow Investor Discusses Hot Topics] What does Xiaomi's entry into car manufacturing mean for Xiaomi?

Background of the Incident

On the afternoon of March 30, an announcement by Xiaomi Group put an end to the long-debated question of whether Xiaomi would enter the automobile manufacturing business. Xiaomi plans to establish a wholly-owned subsidiary responsible for its smart electric vehicle business. The initial investment will be RMB 10 billion, with an expected total investment of USD 10 billion over the next decade. Mr. Lei Jun, CEO of the group, will also serve as the CEO of the smart electric vehicle business.

During the press conference that evening, Lei Jun stated that he would personally lead the team, staking his achievements and reputation on this final major entrepreneurial endeavor, fighting for Xiaomi's automotive venture.

Market Impact

Following the confirmation of the car manufacturing rumors, Xiaomi Group’s Hong Kong stock price surged sharply in the final trading session on Tuesday. On Wednesday, Xiaomi opened more than 2% higher; related stocks experienced a wave of limit-up trading in the morning session; however, Xiaomi turned lower in the afternoon, closing with a slight gain of 0.59%.

What Fellow Investors Are Focused On

The news about “Xiaomi entering the car manufacturing business” has been repeatedly rumored and repeatedly denied, becoming somewhat of a “serial drama” within the investor community. Even before the official announcement, discussions were already rife in the community: the likelihood of Xiaomi entering car manufacturing, when Xiaomi would enter the market, and whether Xiaomi could succeed in car manufacturing?

Regarding Xiaomi’s entry into car manufacturing, nearly 80% of fellow investors in the community expressed optimism.

The rumors about Xiaomi entering the car manufacturing industry were confirmed yesterday, and the final outcome has now been revealed. As leading players enjoy the limelight and the race to淘汰加速 continues in this crowded field, Xiaomi Group has officially entered the competition. Fellow investors now have a new focal point for discussion: what does Xiaomi's announcement of entering the car manufacturing industry mean for the company?

Below, let’s take a look at the insightful perspectives shared by fellow investors!

@辉常观察：Entering the car manufacturing industry is an important step in completing its own ecosystem.

For every internet player, how to enrich and perfect their own ecosystem as much as possible is crucial to their lifecycle and future growth potential. Any internet company that has built a complete ecosystem can tell new stories across various fields and levels.

@问就是加仓up：This is a strategic move, but the stock price trend will still depend on the current fundamentals.

In fact, car manufacturing remains a distant endeavor, with progress potentially lagging behind Baidu. The allure of this story holds little appeal in the currently volatile and declining stock market, where the hype around new energy has nearly subsided. Therefore, one should not hold high expectations for its impact on the stock price, as this is merely a strategic initiative. The longer-term stock price movement will still depend on the performance of the company’s existing businesses.

@无双666：This is the best time for Xiaomi to expand into new growth areas and build a greater company.

The new energy vehicle represents not only a transformation in the powertrain system but also an intelligent revolution in automobiles. Xiaomi has years of accumulated experience in internet system development, and its transition to intelligent systems will face significantly less resistance compared to traditional automakers. This is one of Xiaomi's advantages in entering the automotive industry. New energy vehicles will become a new growth driver for Xiaomi and, given its existing ecosystem, are expected to progress even faster.

@悟空价投：Xiaomi’s grand vision is the Internet of Everything.

Some may ask: Xiaomi has already invested in XPeng, so why does it need to build its own cars? The fundamental reason is that smart vehicles represent a crucial future direction that could potentially transform people’s lifestyles and determine a company’s long-term strategic development. In such a critical area, it would be unwise to passively rely on external players. Unlike robotic vacuum cleaners, which have limited market potential and can simply be addressed through investments, smart vehicles represent the future — they are the "future." Mere investments cannot secure Xiaomi Group or Lei Jun’s position in this space. Xiaomi’s grand vision is the Internet of Everything, or IoT, where smart vehicles clearly play a vital role. Xiaomi’s entry into car manufacturing deserves strong support!

@新摘商业评论：It is both an opportunity and a risk.

If Xiaomi embarks on the highly capital-intensive business of car manufacturing, the financial pressure for a company that needs to fight on multiple fronts will multiply. Moreover, new EV makers like Nio, Li Auto, and XPeng have already secured their positions in the industry, while companies such as Alibaba, Huawei, and Baidu have gained an early lead in the “contract manufacturing” model. To break through, Xiaomi must possess formidable core competencies and differentiated offerings.

@财经琦观：If Xiaomi doesn’t start making cars now, it will be too late.

Xiaomi Group, which has been overly reliant on smartphones, is witnessing the gradual erosion of its foundational business. Growth in the smartphone sector has shifted from “market expansion” to “replacement demand,” with the overall market having transitioned from “capturing incremental gains” to “attracting existing users.” From the perspective of current investors, Xiaomi Group’s AIoT market strategy provides confidence for long-term stockholding. However, in reality, AIoT alone is insufficient. Xiaomi urgently needs a new narrative. The prospects for car manufacturing appear much brighter. Whether in terms of brand influence, per-unit profitability, or the future commercial potential of autonomous vehicles, the automotive segment is fully capable of shouldering the historic mission of “recreating Xiaomi.”

@深响：The transformation of the automotive industry has reached an explosive stage, and time waits for no one.

At this stage, the OEM model is indeed an opportunity for cross-industry players to break into car manufacturing. The first batch of new carmakers debated between choosing OEM or building their own factories. However, for cross-industry players like Xiaomi, Apple, and Baidu, with Tesla having already proven its profitability model and Nio, Li Auto, and XPeng being highly anticipated, opting to build their own factories would mean further delays in officially entering the market competition.

Note: The above insightful perspectives were selected based on comprehensive consideration of content page views and interaction volume. Fellow investors whose comments were selected will receive a “Featured Hot Comment” reward of 188 points. We welcome more fellow investors to follow community hot topics, participate, and share your insightful perspectives!

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