Photo Credit: Xiaomi
Chinese smartphone manufacturer Xiaomi has entered the electric vehicle (EV) market by launching its first EV and accepting orders. At the launch event, Xiaomi's CEO Lei Jun announced that the standard SU7 model will be priced at 215,900 yuan ($29,872; £23,663), while the Max version will cost 299,900 yuan. The company received more than 50,000 orders within the first 27 minutes of sales. Xiaomi's entry into the EV market comes amid a slowdown in sales growth globally, resulting in a price war.
The move sees Xiaomi competing with EV rivals like Tesla and BYD. The starting price in China for Tesla's Model 3 is 245,900 yuan. Mr Lei also stated that the SU7 would have a minimum range of 700 km (435 miles), beating Tesla Model 3's range of 567 km.
Xiaomi hopes that the SU7's shared operating system with its phones, laptops, and other devices will appeal to its existing customers. Xiaomi is the third-largest seller of smartphones worldwide, with a market share of about 12%, according to research firm Counterpoint. The SU7, which Xiaomi has been teasing since last year, has drawn comparisons to Porsche's Taycan and Panamera sports car models. It will be manufactured by a unit of state-owned car manufacturer BAIC Group at a plant in Beijing with an annual production capacity of up to 200,000 vehicles.
"The Chinese EV market is very mature and creates a very stable ecosystem for the EV manufacturers," said Abhishek Murali from research firm Rystad Energy. "For example, the battery supply chain is very strong, and the charging network in the country is also growing to meet the growing EV feed."
Xiaomi has invested $10bn (£7.9bn) in its vehicle business over the next ten years. Xiaomi's entry into the car market reflects its confidence "in the relevancy of their brand" in China, said Bill Russo, founder, and CEO of Automobility. In contrast, last month, iPhone maker Apple reportedly canceled its plans to build an EV.
The launch of Xiaomi's first car comes as a price war in China's EV market has been intensifying. Tesla has cut the cost of its cars in China by thousands of dollars in recent months as local rivals, such as the world's top-selling EV maker BYD, have slashed prices. However, the Chinese government has been trying to curb the flood of new players and has approved only a few new prospective entrants.
Meanwhile, governments around the world are pushing back against imports of foreign-made EVs. Beijing has initiated dispute settlement proceedings against the US at the World Trade Organization to contest "discriminatory subsidies" under the US Inflation Reduction Act. In contrast, the European Union has launched an investigation into whether Chinese government subsidies have helped the country's EV makers undercut European-made models.Amidist all these TESLA itself has had a decrease in sales, will the Xiaomi EV affect it more?
