The official launch of Xiaomi’s much-anticipated first electric vehicle will intensify competition in the crowded Chinese EV market and inject new vitality into the EV sedan segment, experts said. Lei Jun, Founder and CEO of Xiaomi, reaffirmed the company's ambition to build cars comparable to those of global automakers Porsche and Tesla and to become one of the top five auto manufacturers in the world. He announced that the price of its SU7 sedans would range between CNY215,900 and CNY299,900. SU is short for “Speed Ultra”. Roy Lu, Shanghai-based automotive analyst, said Xiaomi’s entry in the EV market is expected to intensify competition in a market where established automakers, startups and tech companies are all vying to expand their presence. A price war is already ongoing in China’s EV market, which is the world’s largest.
Lei Jun, Xiaomi's Chairman, called the SU7 "the best-looking, best-driving and smartest car" costing under CNY500,000, and a “dream car.” Leaders of China's pioneering EV makers, including NIO, XPeng and Li Auto, were present at the launch. The Xiaomi CEO said the SU7, which has a 700-km battery life, is priced lower than the Tesla Model 3, but added that 90% of its specifications surpass the Tesla model. “I believe consumers will make their choices,” he said.
Xiaomi’s edge lies in its AI enabled internet of things (IoT) ecosystem, which might give it an upper hand amid the competition, Analyst Roy Lu said. That was fully on display at Xiaomi’s launch event in Beijing where Lei not only explained the details of car design and automated driving functions, but also unveiled more than 100 IoT items in Xiaomi’s car, such as tablets and refrigerators. The Beijing-based company is hoping that the SU7’s shared operating system with its phones, laptops and other devices will appeal to customers. Lei said Xiaomi plans to invest CNY24 billion in research and development this year, demonstrating a serious commitment to manufacturing cars, shortly after iPhone maker Apple shelved plans to make its own cars. The Xiaomi SU7 underwent comprehensive testing in 300 cities, covering a total road distance of 5.4 million kilometers, with 576 test vehicles deployed.
Lei said that over the past three years of manufacturing cars, his biggest realization was just how difficult it is, noting that even large companies like Apple have given up on it. According to Lei, consumers have already widely accepted electrification, and the key to winning the next stage of competition in EVs is to make cars as intelligent as possible, and that is Xiaomi’s edge, as it has been devoting resources to AI R&D since 2016. Shortly after the launch event, Xiaomi said it had received over 50,000 orders within the first 27 minutes.
No model has ever attracted more attention in China than the Xiaomi SU7. The launch event attracted more than 40 million views on Xiaomi Auto’s Weibo alone. Even guessing its price range had been a trending topic on China’s social media platforms for weeks in a row. Xiaomi's SU7 is the first vehicle from a phone maker and has some eye-catching features, including its acceleration, range, as well as its ecosystem that allows other Xiaomi products to work seamlessly with the car.
Zhang Yongwei, Vice President and Secretary General of China EV 100, a major auto industry think tank, said the competition in the EV industry will heat up this year, with a more differentiated market landscape. The next one or two years will be very crucial, Zhang said, as companies that may not have the necessary competence will likely exit the market after a shakeout. “The production volume and sales of new energy vehicles in China are expected to reach 13 million units in 2024, with a year-on-year growth rate of about 40%,” Zhang said, as reported by the China Daily.
Meanwhile, BYD, the world’s largest electric-vehicle (EV) maker by sales, said earnings rose last year to an all-time high on the back of record deliveries and cost-cutting measures. Earnings jumped 81% to CNY30.04 billion from a year earlier, the highest on record, the carmaker said in a filing to the Hong Kong and Shenzhen stock exchanges. The Shenzhen-based carmaker, which counts Warren Buffett’s Berkshire Hathaway among its shareholders, said revenue climbed 42% to CNY602.3 billion in 2023 following record deliveries of new energy vehicles (NEVs), including pure battery-run EVs, plug-in hybrids and fuel-cell vehicles. BYD delivered 3.02 million NEVs to customers at home and abroad in 2023, a 62% increase from 2022. Most of them were sold in mainland China, with 242,765 units, or 8% of the total volume, exported.
This overview is based on reports by the South China Morning Post, China Daily and Shanghai Daily.
