Chinese technology giant Xiaomi is poised to make a significant entrance into the electric vehicle (EV) market with the launch of its first electric car, the Speed Ultra 7 (SU7), and the commencement of orders on Thursday.
The company’s Chief Executive, Lei Jun, disclosed earlier this week that the SU7 would be competitively priced below 500,000 yuan ($69,186; £54,836), positioning Xiaomi to compete directly with established rivals like Tesla and BYD.
The move marks Xiaomi’s foray into a highly competitive industry amid a global slowdown in EV sales, triggering a fierce price war among manufacturers.
With its SU7 model, Xiaomi aims to leverage its existing customer base by offering a shared operating system with its smartphones, laptops, and other devices.
Xiaomi’s venture into the EV market comes as no surprise given its status as the third-largest seller of smartphones worldwide, boasting a market share of approximately 12%, according to research firm Counterpoint.
The SU7, teased by Xiaomi since last year, has drawn comparisons to renowned sports car models like Porsche’s Taycan and Panamera.
Manufactured by a unit of the state-owned car manufacturer BAIC Group at a plant in Beijing capable of producing up to 200,000 vehicles annually, the SU7 represents a significant milestone for Xiaomi.
Bill Russo of Automobility highlighted the importance of establishing a consumer market for Xiaomi as a smart EV brand, emphasizing the company’s confidence in its brand’s relevance in China’s evolving automotive landscape.
While Xiaomi’s entry into the EV market underscores its commitment to innovation and diversification, other tech giants have faced challenges in the same arena.
Last month, iPhone maker Apple reportedly cancelled its plans to develop an EV, signaling the complexities and uncertainties inherent in the sector.
Undeterred by potential hurdles, Xiaomi has announced plans to invest $10 billion (£7.9 billion) in its vehicles business over the next decade, underscoring its long-term commitment to the EV market.
Abhishek Murali from research firm Rystad Energy highlighted China’s mature EV market and robust ecosystem, including a strong battery supply chain and expanding charging network, as conducive factors for Xiaomi’s expansion.
However, Xiaomi enters the EV arena amidst intensifying competition and evolving market dynamics. Tesla, in particular, has aggressively reduced the prices of its cars in China, prompting local rivals like BYD to follow suit.
As Xiaomi prepares to navigate the competitive landscape, it stands as one of the few new entrants to gain approval from authorities amidst efforts to regulate the influx of players into the Chinese EV market.
As the world’s largest car market continues to evolve, Xiaomi’s entry into the EV sector adds a new dimension to the industry’s competitive landscape.
With Tesla set to announce its delivery numbers for the first quarter of 2024 next week and ongoing trade disputes between major economies, including China and the US, the future of the EV market remains uncertain yet ripe with opportunities for innovative players like Xiaomi.
Chioma Kalu
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