Chinese smartphone giant Xiaomi announced on Thursday its entry into the automotive market with the launch of its first car, the SU7, aiming to disrupt the electric vehicle segment dominated by Tesla.
Priced significantly lower than Tesla’s Model 3, the SU7 comes at 215,900 yuan ($30,408), a strategic move in the intensifying price competition within China’s electric car industry.
Xiaomi’s CEO, Lei Jun, acknowledged that the aggressive pricing meant selling each SU7 at a loss, emphasizing the company’s commitment to gaining a foothold in the market. In comparison, Tesla’s Model 3 starts at 245,900 yuan in China.
Highlighting the SU7’s competitive edge, Lei Jun claimed that it surpassed the Model 3 in over 90% of its specifications. However, he admitted that Xiaomi might take three to five years to bridge the gap in two specific aspects where Tesla currently leads.
Notably, the SU7 boasts a minimum driving range of 700 kilometers (approximately 435 miles), outperforming the Model 3’s 606 kilometers.
The launch generated significant interest, with orders surpassing 50,000 cars within 27 minutes of sales commencement at 10 p.m. Beijing time on Thursday. Deliveries are scheduled to begin by the end of April, according to Lei Jun.
Additionally, he touted the efficiency of Xiaomi’s car factory, claiming that it can produce an SU7 every 76 seconds. However, it remains unclear whether the factory is operating at full capacity.
Earlier this week, the Xiaomi CEO took to social media to proclaim that the SU7 would reign as the top sedan priced “under 500,000 yuan” ($69,328).
This declaration sets the stage for Xiaomi’s entry into a fiercely competitive automotive market in China, where companies are unleashing a barrage of new models and slashing prices to stay afloat.
Notably, Chinese telecommunications giant Huawei has forged partnerships with traditional automakers, introducing the Aito brand, whose vehicles often grace Huawei smartphone showrooms.
Tesla’s Model 3 holds the crown as the best-selling new energy sedan in China, boasting a minimum driving range of 600 kilometers (372 miles) and a price tag below 500,000 yuan, as per data from industry authority Autohome.
Xiaomi is eyeing a target of 20 million premium users for its new electric vehicle, according to the company’s president.
Among other players in the market, BYD’s Han sedan offers a competitive starting price of 169,800 yuan, Autohome reports.
Meanwhile, Nio’s ET5 kicks off at 298,000 yuan, while Xpeng’s P7 starts at 209,900 yuan. Additionally, Geely-owned Zeekr’s 007 sedan enters the fray with a starting price matching that of Xpeng, as indicated by Autohome’s data.
The surge in sales of new energy vehicles, encompassing battery-only powered cars, has been notable in China, constituting approximately one-third of all new passenger cars sold, according to figures from the China Passenger Car Association.
At the Xiaomi SU7 launch event, notable figures from rival electric car startups Nio, Xpeng, and Li Auto graced the stage as featured guests.
During the event, Lei introduced a range of accessories designed to enhance the SU7 experience, including an in-car refrigerator, a customized front window shade, and a smartphone holder.
Some of these accessories are offered complimentary with a car purchase made before the end of April, while others are available for separate purchases.
Highlighting the SU7’s technological prowess, Lei noted its support for Apple’s CarPlay and seamless integration with iPads. Additionally, he revealed advanced driver-assist features tailored for both highway and city driving, slated for full availability in China by August.
While Tesla’s Autopilot technology for highway driving is already accessible in China, the release of the company’s “Full Self-Driving” capability for urban streets remains pending.
Despite expressing Xiaomi’s aspiration to rival Porsche at a previous car tech event in December, Lei acknowledged that the SU7 has a journey ahead before reaching such premium levels.
However, he revealed plans for a “Max” version of the SU7, positioned as a competitor to Porsche’s Taycan, priced at 299,900 yuan.
The SU7 forms a crucial component of Xiaomi’s recently introduced “Human x Car x Home” strategy, aimed at constructing an ecosystem of interconnected devices operating on its new HyperOS platform. While the bulk of Xiaomi’s revenue stems from smartphone sales, approximately 30% originates from appliances and various other consumer products.
Despite Xiaomi’s reputation for offering affordable products, President Lu Weibing disclosed to CNBC earlier this year that the company has been executing a premiumization strategy since 2020.
He estimated a target audience of around 20 million users within that price segment who could potentially be interested in purchasing the SU7.
According to Lu, initial sales of the SU7 will be confined to the Chinese market, with any international launch anticipated to materialize no earlier than two to three years from now.
The company showcased the SU7 at the Mobile World Congress held in Barcelona in late February, following an earlier revelation of the vehicle’s exterior and technological features in Beijing in late December.
The SU7 forms a crucial component of Xiaomi’s recently revealed “Human x Car x Home” strategy, aimed at constructing an ecosystem of interconnected devices operating on its new HyperOS platform. While the bulk of Xiaomi’s revenue stems from smartphone sales, approximately 30% originates from appliances and various other consumer products.
Despite Xiaomi’s reputation for offering affordable products, President Lu Weibing disclosed to CNBC earlier this year that the company has been executing a premiumization strategy since 2020. He estimated a target audience of around 20 million users within that price segment who could potentially be interested in purchasing the SU7.
According to Lu, initial sales of the SU7 will be confined to the Chinese market, with any international launch anticipated to materialize no earlier than two to three years from now.
The company showcased the SU7 at the Mobile World Congress held in Barcelona in late February, following an earlier revelation of the vehicle’s exterior and technological features in Beijing in late December.
