Many people don't understand Dreame's cross-industry move into car manufacturing. On August 28, Dreame Technology officially announced its entry into car manufacturing. According to the plan, Dreame's goal is to create the "world's fastest car." Its first product is positioned as an intelligent ultra-luxury pure electric vehicle, benchmarking the Bugatti Veyron, and is expected to debut in 2027. In the domestic market, an ordinary Bugatti Veyron sells for approximately 25 million yuan, while its high-performance version exceeds 35 million yuan.

Before the official announcement, Dreame's car manufacturing project team had already assembled nearly a thousand-person R&D and production team, which continues to expand. Media reports indicate that Dreame's car manufacturing team has achieved breakthrough progress in areas such as motors, AI interaction, and intelligent cockpits required for automotive products.

**Dreame's Car Manufacturing Is Undoubtedly a Risky Venture**

In 2024, there were reports that Dreame Technology launched a car manufacturing project, with the first model being an extended-range SUV, entering the high-end niche market not completely monopolized by Li Auto and AITO. However, according to Dreame Technology founder and CEO Yu Hao's public letter, Dreame's car manufacturing is not a hasty decision or following trends, but rather turning the car manufacturing business plan he wrote at Tsinghua University's Sky Factory in 2013 into reality. This becomes a story of fulfilling a "12-year car manufacturing dream."

In January this year, Dreame Technology's car manufacturing entity "Starry Sky Plan (Shanghai) Automotive Technology Co., Ltd." was established, with most employees coming from the traditional automotive industry, and the factory planned in Shanghai Lingang. However, Dreame officials have not explained the car manufacturing qualification issue. There's speculation that Dreame might "borrow a shell" by acquiring the previously troubled Neta Auto to obtain a car manufacturing "license."

Currently, Dreame is receiving increasing scrutiny from the outside world. If expanding from vacuum robots to major appliances, drones, and embodied robots represents a "parallel migration" of Dreame's core technology, then car manufacturing is undoubtedly a bigger adventure. Many netizens are also surprised how a vacuum robot company could be associated with the Bugatti Veyron.

Car manufacturing is not easy. XPeng Motors Chairman He Xiaopeng recently lamented the hardships of car manufacturing in a conversation with Luo Yonghao. He joked that if you want to harm a friend, advise him to go into car manufacturing. The automotive industry is both capital-intensive and technology-intensive, with extremely high entry barriers. The upfront investment involving R&D, production, supply chain management, quality control, and market sales requires hundreds of billions of yuan.

Taking R&D as an example, Zuosi Automotive Research published rankings of Chinese automakers' R&D expenses in 2024, with BYD leading the entire industry at 53.19 billion yuan. Among new energy vehicle startups, NIO and Li Auto ranked fourth and fifth respectively, but their R&D expenses were as high as 13.04 billion yuan and 11.07 billion yuan respectively. Additionally, Tesla's R&D expenses were $4.54 billion (approximately 32.687 billion yuan).

He Xiaopeng also said that China's automotive industry elimination process has about 5 more years, and currently no one dares to say they have secured a "ticket." After multiple rounds of elimination, traditional automakers are actively transforming to survive, while star car manufacturing players like WM Motor and Neta have successively fallen, making car manufacturing seem like a game only large companies can "afford to play."

Dreame also recognizes this point, mentioning in the public letter that car manufacturing is a "do-or-die" expedition. However, Dreame doesn't believe that entering car manufacturing at this time has no chance of winning. From publicly released information, Dreame's opportunities can be summarized in four aspects: core accumulation, business internationalization, organizational culture innovation, and China's mature intelligent vehicle supply chain.

For example, at the technical level, by the end of 2024, Dreame Technology has cumulatively applied for 6,379 patents globally, with 45% being invention patents, covering core intelligent vehicle areas such as sensor fusion, motor control, and human-machine interaction.

From an industry perspective, China has the world's most complete automotive industry chain, especially in the new energy vehicle field. From batteries and motors to electronic control systems, it has formed strong supporting capabilities. Data shows that China has over 100,000 automotive parts companies, achieving coverage of 1,500 types of components, building a complete industrial chain from upstream parts to midstream first/second-tier suppliers, and downstream to vehicle manufacturers and mobility service providers. This undoubtedly provides strong industrial support for new entrants.

Dreame defines these advantages as the automotive industry's "Apple opportunity." It stated in the public letter: "We are called 'China's Apple' by many people." What Dreame wants to do is use the right products, right strategy, and right pace to push Chinese intelligent manufacturing toward the world's high-end market. "We are not '0 to 1' adventurers, but standing on the shoulders of Chinese manufacturing giants. Countless Chinese companies have used ten years of blood and sweat to forge the world's most mature electric vehicle supply chain and technology ecosystem."

**Want to "Recreate Another Xiaomi"?**

This tone is very familiar - it's Lei Jun and Xiaomi cars. Dreame emerged from Xiaomi's ecosystem chain, and after growing stronger, began to downplay its Xiaomi traces. Now it's crossing over to the new energy vehicle track again. This inevitably leads to similar evaluations that Dreame wants to "recreate another Xiaomi."

Perhaps Lei Jun and Xiaomi cars are the most representative of what Dreame calls "Chinese manufacturing giants." I also see that Dreame's car manufacturing can find projections in Lei Jun in many places. For instance, their similar understanding of current new energy vehicles. In "Xiaomi's Entrepreneurial Thinking," Lei Jun explained Xiaomi's reason for entering the automotive sector: "The threshold for car manufacturing has significantly lowered, with 30,000 components highly modularized. Over the past 10 years, automotive power battery manufacturing costs have dropped by 80%, with at least another 50% reduction space in the future."

The essence of electric vehicles has become "consumer electronics" products. Dreame believes that cars are gradually becoming the "next-generation super intelligent terminal," a key carrier for integrating electrification, intelligence, and digitalization technologies, and also a strategic high ground for technology companies to achieve ecosystem leaps.

Yu Hao once described Dreame Technology's business model to "China Entrepreneur": "In the future, it will be a broad robotics company. Of course, robots don't necessarily have to look like humans, but they have sensing, processing, and execution functions. We want to continuously do well in the robot's heart and brain. The heart is a high-speed motor providing power, and the brain is image-based perception, recognition, planning, and control. With heart and brain, we can expand into one field after another."

In other words, Dreame dares to benchmark the Bugatti Veyron because the underlying logic is "technological homogeneity" - high-speed digital motors, AI algorithms, and robot sensing and control three core technologies exactly correspond to electric drive systems, intelligent cockpits, and autonomous driving three major automotive modules.

At the same time, like Xiaomi, before car manufacturing, Dreame has relatively large industry advantages in its core business. Xiaomi-W (01810) ranks among the top in several sectors including smartphones and AIoT products. Dreame Technology claims it has become the "absolute leader" in the cleaning field with products like vacuum robots, ranking first in markets in over 20 countries and regions.

The difference between them is that Xiaomi's scale is large enough, at the hundred-billion level. Dreame's base is much smaller, but also at the ten-billion level. According to multiple media reports, Dreame Technology, which has not yet gone public, had revenue of approximately 15 billion yuan last year, though this information has not been confirmed by the company.

This will also become a major practical obstacle for Yu Hao's car manufacturing: Is this money enough for car manufacturing? Where will the funding come from?

Dreame also has its own calculations. It believes that car manufacturing is more about capital efficiency than capital scale. To achieve capital efficiency, the prerequisite is to make the right products. "Every product can precisely match market demand, and 20 billion to 50 billion yuan is enough to support it."

Following this logic, Dreame doesn't need to invest hundreds of billions of yuan for this purpose.

Another key point is that Dreame might enhance its brand value through car manufacturing. High-end positioning has been a core strategy that Lei Jun has been pushing for Xiaomi in recent years. One of its strategies is to comprehensively benchmark Apple, from hardware and software to user experience, almost pixel-perfect replication of Apple.

But being Apple is not easy, testing a company's product capability, technical capability, brand capability, and supply chain management capability. Xiaomi's upward march relying solely on smartphones and other products has been very difficult. Even in Xiaomi's self-defined high-end phone price segments, several digital flagship phones' performance has been unsatisfactory.

After Xiaomi SU7's debut, Lei Jun's new "person-car-home" narrative quickly supported Xiaomi's high-end strategy. Xiaomi President Lu Weibing stated boldly last year that Xiaomi SU7's success represents Xiaomi's product methodology and brand high-end methodology, with Xiaomi's high-end positioning achieving "tremendous phased success."

**Yu Hao Needs a "Dreame" with Stronger Brand Power**

With Xiaomi cars setting a precedent, Yu Hao has gained at least two insights: On one hand, Dreame's entry targets ultra-luxury cars from the start, focusing on explosive products. By combining user insights and technical insights to form a product, explosive products can change market patterns. This business model was reflected in previous information disclosures about the Starry Sky Plan, which reported that the plan focuses on technology empowerment and product definition, leveraging China's automotive ecosystem chain advantages to expand overseas markets.

Through this business model, Starry Sky Plan's overseas channels can quickly feedback demand, forming a closed loop of "demand insight - technology R&D - customized production - targeted sales."

Dreame's small calculation might be that the first automotive product doesn't need high volume, just needs to be built and sold, and Dreame's new car manufacturing story path will be proven. This is also a compromise approach for cost control and boundary management.

On the other hand, Dreame can also enhance its brand tier through car manufacturing, completing a brand renewal. Although Dreame holds an advantageous position in fields like vacuum robots, within the entire consumer electronics industry, the home cleaning track is still quite narrow. According to multiple market analysis reports, the global vacuum robot market size is approximately $9 billion, with growth rates of 10%-20%.

"China Entrepreneur" noted that Yu Hao aims to achieve 200 billion yuan in sales by 2030. With the current growth rate of the vacuum robot industry, this is probably difficult and requires other approaches.

Dreame's car manufacturing can further strengthen its high-end brand mindset, using "top-down" brand momentum to cover more product categories and drive sales of vacuum robots, robots, drones, and other products. In other words, Yu Hao needs a "Dreame" with stronger and more high-end brand power to substantiate the "Apple" label, which can support the commercial blueprint he describes.

It's worth noting that in public reports, Dreame seems to intentionally ignore Yu Hao's personal factors. Yu Hao's car manufacturing is also summarized in one sentence in the public letter: "We spent twelve years waiting for a 'timing' that belongs to Dreame."

The background is that Dreame Technology founder and CEO Yu Hao graduated from Tsinghua University's Aerospace Engineering major, is one of China's earliest quadcopter developers and inventor of three-rotor aircraft, and also founder of Tsinghua University's "Sky Factory."

One possible reason is that Dreame worries more controversy will focus on competitor Stone Technology, thinking Dreame's car manufacturing might follow the same path. In 2021, Stone Technology Chairman Chang Jing launched car manufacturing - Geek+ Auto. But Geek+ Auto has been "much thunder, little rain," with its products classified under "others" in multiple industry market reports.

This caused great dissatisfaction among investors and the market, believing that Stone Technology's stock price decline was partly attributed to the founder's "not focusing on the main business." However, such views ignore a basic fact: Chang Jing's car manufacturing was starting from scratch, more like his personal resume-building hobby. Geek+ Auto was more like repeating a traditional car manufacturing game without differentiated advantages, and the scope was too broad.

Dreame's car manufacturing is an external expansion of its existing commercial ecosystem, which is the external impression: Dreame is constantly crossing boundaries. It's precisely this difference that allows Yu Hao's car manufacturing to expand Dreame's brand and business framework.

For Dreame, how to handle the relationship between automotive business and the Dreame brand, as well as Yu Hao personally, will be an important topic for advancing this business going forward.

However, if referencing Lei Jun's explored car manufacturing methodology, Dreame boldly sticking to the main brand and Yu Hao's personal motivation to enrich a "car manufacturing" story, as long as it doesn't act capriciously, Dreame Auto might have the opportunity to become a new variable in domestic new energy vehicles.