Xiaomi’s Bold Entry into the Electric Car Market: The SU7 Unveiled
In Beijing, Xiaomi announced on Thursday its entry into the electric car market with the SU7, priced significantly below Tesla’s Model 3 in China. Xiaomi CEO Lei Jun revealed that the standard version of the SU7 would retail for 215,900 yuan ($30,408), conceding that this pricing strategy would result in selling each car at a loss. By comparison, Tesla’s Model 3 begins at 245,900 yuan in China.
Lei asserted that the standard version of the SU7 surpassed the Model 3 in over 90% of its specifications, with only two areas where Xiaomi may need three to five years to match Tesla. Additionally, he highlighted that the SU7 boasts a minimum driving range of 700 kilometers (approximately 435 miles), exceeding the Model 3’s 606 kilometers. Xiaomi reported receiving orders for over 50,000 cars within the first 27 minutes of sales launch at 10 p.m. Beijing time on Thursday.
Lei indicated that deliveries would commence by the end of April. He also mentioned that Xiaomi’s car factory, with all “key” processes fully automated, has the capability to produce an SU7 every 76 seconds. It’s uncertain if the factory is functioning at maximum capacity.
Earlier this week, the Xiaomi CEO stated on social media that the SU7 would stand out as the top sedan priced “under 500,000 yuan” ($69,328).
Competitive Landscape of China’s Electric Car Market
Entering a highly competitive market in China, the car faces stiff competition as companies introduce numerous new models and slash prices to remain competitive. Chinese telecommunications giant Huawei, for instance, has collaborated with traditional automakers, notably launching the Aito brand, whose vehicles are frequently showcased in Huawei smartphone showrooms.
According to data from industry website Autohome, Tesla’s Model 3 leads as the best-selling new energy sedan in China, boasting a driving range of at least 600 kilometres (372 miles) and a price tag under 500,000 yuan. The Han sedan from BYD is priced starting at 169,800 yuan, as reported by Autohome.
According to the data provided, Nio’s ET5 is priced starting at 298,000 yuan, whereas Xpeng’s P7 starts at 209,900 yuan. Additionally, Geely-owned Zeekr’s 007 sedan is priced starting at 209,900 yuan, according to Autohome.
Revolutionizing China’s Electric Vehicle Market
The surge in sales of new energy vehicles, encompassing battery-only powered cars, has been notable in China, now constituting approximately one-third of new passenger cars sold, as stated by the China Passenger Car Association. At the Xiaomi SU7 launch, leaders from rival electric car startups Nio, Xpeng, and Li Auto attended.
Xiaomi CEO Lei showcased various accessories for the SU7, such as an in-car refrigerator and smartphone holder, available for free with purchases before April’s end. The SU7 supports Apple CarPlay and iPad integration.
Lei also announced driver-assist technology for highways and cities, to be fully available in China by August. While Tesla’s Autopilot is available for highway driving in China, “Full Self Driving” for city streets is yet to be released.
Despite previously expressing Xiaomi’s intention to compete with Porsche, Lei acknowledged at a car tech event in December that the SU7 still had a way to go before reaching that premium level. However, he unveiled plans for a “Max” version of the SU7 aimed at rivaling Porsche’s Taycan, priced at 299,900 yuan.
Xiaomi’s SU7: Driving the Future of Connectivity
The SU7 is part of Xiaomi’s new “Human x Car x Home” strategy, focused on creating a connected ecosystem with its HyperOS operating system. While Xiaomi primarily earns revenue from smartphones, around 30% comes from appliances and other consumer products.
Despite its reputation for affordability, Xiaomi has been pursuing a premiumization strategy since 2020, targeting approximately 20 million users in that price segment who might be interested in the SU7.
According to Xiaomi’s President Lu Weibing, the SU7 will debut in China first, with any international launch likely taking two to three years.
The car was unveiled at the Mobile World Congress in Barcelona in late February, following an initial reveal in Beijing in December.
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