With a sleek, high-tech sedan, Xiaomi, a well-known manufacturer of smart consumer goods in China, is entering the congested but rapidly growing market for electric vehicles in that nation.
After founder Lei Jun concluded a two-hour presentation on the SU7 automobile, the tech company started taking orders in China on Thursday night using an app. Lei Jun revealed the much anticipated pricing range: 215,900 yuan to 299,900 yuan, or roughly $30,000 to $40,000.
Xiaomi reported that in the first 27 minutes following the launch of sales at 10 p.m. Beijing time (1400 GMT), it had received 50,000 orders for the SU7.
China now has the largest market for electric vehicles worldwide thanks to government subsidies, and a plethora of new manufacturers are engaged in intense competition. The majority of the industry’s sales have been in the United States, Europe, and Asia, but Chinese automakers are attempting to enter other markets with more affordable models, which could pose a threat to US, Japanese, and European automakers.
Lei wasn’t afraid to take on that challenge, stating that Xiaomi, a Beijing-based company, wants to rank among the top five automakers in the world within the next 15 to 20 years. In a live-streamed presentation at a convention center, he informed the audience that making vehicles is difficult, but that success is cool.
According to Fitch Ratings, the proportion of EVs and hybrids in China’s vehicle sales is expected to increase from 36% in 2023 to 42% to 45% this year. However, the government stated in a report from December that the automakers’ short-term market share and profitability may be impacted by the competition.
According to Lei, Xiaomi would lose money if it sold the base model for 215,900 yuan, which is less expensive than the Tesla Model 3 in China. Although the top-of-the-line SU7 isn’t as good as the Porsche Taycan, he said it beat the Tesla in most areas.
He acknowledged that “there is still a long way to go before our car becomes a Porsche,” but added that “we will eventually surpass Porsche one day” if Xiaomi continues to work hard for the next five to ten years.
Xiaomi, which is well-known for its reasonably priced smartphones, smart TVs, and other gadgets, wants to take use of this technology by integrating its automobiles with its phones and household appliances to create what it refers to as a “Human x Car x Home” ecosystem.
Lei first touted the SU7’s extended range and great performance before showcasing some of its clever features, such the ability to communicate with a delivery person from the automobile when their doorbell rings at home. He mentioned that both Xiaomi and Apple phones would work with the system, giving a nod to the iPhone’s widespread appeal.
According to Tu Le, the head of the consultancy Sino Auto Insights, Xiaomi is attempting to close the loop by include transportation in a range of products that are already incorporated into the personal and professional life of its clients.
“The holy grail for tech companies is being able to seamlessly be a continuous part of someone’s life,” he replied via email. “It’s unlikely that you know anyone in Beijing who doesn’t own a Xiaomi device, whether it’s a tablet, computer, TV, phone, or air purifier.”
As a startup in the auto industry, the business is speculating that it can create a car that consumers will be interested in, he added. In light of the slowing Chinese economy and the continuous competition over EV prices, he estimated that it would take a year or two to determine if Xiaomi could successfully adjust and learn from its mistakes.
Le stated, “They have an advantage because they are a technology company, but they also need to learn how to be a tech company that builds cars, so they need to reconcile that with drinking through a fire hose.”
The financial research firm CreditSights predicted that Xiaomi’s EV subsidiary would sell 60,000 cars in its first year and turn a profit in the following two due to significant marketing and promotion expenses.
Chinese manufacturers encounter political obstacles while attempting to grow overseas.
To find out if Chinese subsidies give made-in-China electric vehicles an unfair competitive advantage abroad, the European Union is looking into the matter. Last month, the United States initiated a probe into connected cars built in China that it claims have the potential to collect private data about their drivers.
President Joe Biden declared, “China is determined to dominate the future of the auto market, including by using unfair practices,” upon the announcement of the U.S. probe. “China’s policies could put our national security at danger by flooding our market with its automobiles. That is not going to occur under my supervision.
This week, China retaliated by submitting a protest to the World Trade Organization, claiming that American subsidies for electric vehicles unfairly target Chinese goods.
Due to suspected ties to China’s military, the U.S. Defense Department placed Xiaomi on a blacklist in 2021. However, after the business refuted the allegations and filed a lawsuit against the government, the list was withdrawn a few months later.
