In recent years, China’s electric vehicle (EV) sector has experienced rapid growth, driven initially by purchasing subsidies that ceased in late 2022. With numerous domestic automakers vying for dominance in a crowded market, Xiaomi, renowned for its affordable smartphones and home appliances, is entering the fray with its SU7 EV.
At a lavish launch event in Beijing, CEO Lei Jun unveiled the SU7, positioning it as a contender against Chinese automotive giant BYD and Elon Musk’s Tesla. Priced at 215,900 yuan ($29,868) for the basic model, the SU7 boasts a sleek design and sporty features, including “sound simulation” for a thrilling driving experience, karaoke equipment, and a mini-fridge.
Xiaomi aims to deliver “the best-looking, best-driving, and smartest car” under 500,000 yuan, targeting the fiercely competitive 200,000 to 250,000 yuan price range. Analysts view this segment as pivotal in China’s EV landscape, with Johnson Wan from Jefferies Financial Group Inc noting its significance to Bloomberg.
Lei Jun asserted at the launch that the SU7 rivals Tesla’s Model 3 and surpasses it in certain aspects, emphasizing Xiaomi’s commitment to delivering superior products. Leveraging its status as the world’s third-largest smartphone maker, Xiaomi draws on its experience in the consumer electronics sector to inform its EV strategy.
Lu Weibing, Xiaomi’s president, highlighted the company’s extensive user base, particularly among premium smartphone users, as a key factor in pricing the SU7 competitively. With approximately 20 million users of its premium smartphones, Xiaomi aims to capture this market overlap in its EV venture, signaling a strategic approach to market penetration and consumer engagement.
Xiaomi Challenges Tesla and Nio with Premium EV Launch in China
Abhishek Murali, senior electric vehicle analyst at Rystad Energy, highlighted Xiaomi’s strategic move into the premium segment as a means to differentiate itself from established brands like Tesla and Nio. By targeting affluent Chinese consumers with its SU7 EV, Xiaomi aims to mitigate the high manufacturing costs typically associated with EV startups.
The launch of the SU7 follows closely on the heels of BYD, the global leader in EV sales, announcing record annual profits. As BYD expands rapidly overseas, venturing into Southeast Asia, Latin America, and Europe, CEO Wang Chuanfu acknowledged the challenges faced by the automotive industry, particularly in the context of evolving promotional policies and market fluctuations.
