Chinese electronics company Xiaomi has recently announced its entry into China’s competitive electric vehicle market. With over 10 billion yuan ($1.4 billion) invested in its development, Xiaomi is set to rival established automakers such as Tesla and Porsche with its new car model, the Xiaomi SU7. CEO Lei Jun revealed that the vehicle is currently in trial production and will be available to the domestic market in the coming months. Boasting superior acceleration and other performance metrics compared to Porsche’s Taycan and Tesla’s Model S, the Xiaomi SU7 aims to establish itself as a leading player in the industry.
During a three-hour presentation, Lei Jun articulated Xiaomi’s ambitious goals, including becoming an industry leader in electric vehicles and autonomous driving. The design team behind the SU7 comprises former employees of renowned automakers BMW and Mercedes-Benz. With more than three years of development, Xiaomi plans to commence sales in 2024. This timeframe aligns with the growing popularity of electric vehicles in China and the increasing efforts of domestic automakers to differentiate their products through innovative and technology-driven offerings.
Notably, Xiaomi aims to leverage its expertise in smartphones and home appliances to create a “Human x Car x Home” smart ecosystem. The SU7 will integrate seamlessly with Xiaomi’s smartphones and internet-connected home appliances. Lei Jun emphasized the company’s commitment to ensuring data privacy across these devices. Moreover, Xiaomi intends to surpass U.S. safety standards for rear-end collisions, further enhancing the vehicle’s appeal in terms of safety. With compatibility with Apple products such as iPhones, iPads, CarPlay, and AirPlay, Xiaomi is positioning itself to appeal to a broad range of consumers.
The Ministry of Industry and Information Technology recently published a list of tax-exempt new energy vehicles, which included two Xiaomi SU7 models. These purely battery-powered vehicles boast an impressive driving range of 628 kilometers (390 miles) to 800 kilometers. The ministry identified a subsidiary of state-owned BAIC Group as the manufacturer for the Xiaomi SU7. Although the exact price has not been disclosed, Xiaomi has already started selling its flagship smartphone and smartwatch in the colors associated with the SU7 sedan, namely “aqua blue” and “olive oil green.” Lei Jun dismissed rumors of a 99,000 yuan or 140,000 yuan price tag, suggesting that the Xiaomi SU7 will offer premium features at a competitive price point.
Xiaomi’s foray into the electric vehicle market coincides with other domestic players’ recent product launches. Nio unveiled its ET9, priced at 800,000 yuan ($113,090), which will begin deliveries in the first quarter of 2025. Huawei’s Aito brand introduced its M9 SUV, starting at 469,800 yuan, with mass deliveries scheduled for late February 2024. Zeekr, backed by Geely, announced its 007 sedan, priced from 209,000 yuan, with deliveries set to begin on January 1. Furthermore, Xpeng, which Xiaomi invested in 2019, plans to launch its X9 vehicle on the same date. Xiaomi has expressed its admiration for competitors such as BYD, Nio, Xpeng, Li Auto, and Huawei, underscoring the intense competition within the Chinese electric vehicle market.
Despite the announcement of its expansion into the electric vehicle sector, Xiaomi’s shares closed slightly lower in Hong Kong trading. However, the company’s Hong Kong-traded shares have experienced significant growth of over 40% this year. Xiaomi achieved record sales of more than $3 billion during China’s Singles Day shopping festival. Furthermore, the company has allocated a substantial budget of 20 billion yuan ($2.8 billion) for research and development in 2023, a 25% increase compared to the previous year and more than double the amount spent in 2020. Xiaomi’s continued success in various industries positions the company well for its entry into the electric vehicle market.
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