Chinese smartphone company Xiaomi is entering the competitive electric car market in China with the launch of its first car, the SU7. The CEO of Xiaomi, Lei Jun, announced that the standard version of the car will be priced at 215,900 yuan, which is significantly less than Tesla’s Model 3. Despite selling the car at a loss, Lei claimed that the SU7 outperforms the Model 3 on more than 90% of specifications. The company’s fully automated car factory can produce an SU7 every 76 seconds, with deliveries set to begin by the end of April.
The launch of the SU7 comes at a time when the electric car market in China is fiercely competitive, with companies cutting prices and launching new models to survive. Recently, Chinese telecommunications giant Huawei partnered with traditional automakers to launch the Aito brand, while other companies like BYD, Nio, Xpeng, and Geely-owned Zeekr are also offering electric sedan models at competitive prices. The data from industry website Autohome shows that Tesla’s Model 3 remains the best-selling new energy sedan in China.
The SU7 is part of Xiaomi’s broader strategy to build an ecosystem of devices connected to its new HyperOS operating system, moving beyond its core business of smartphones. Although Xiaomi is known for more affordable products, the company has been pursuing a premiumization strategy since 2020. Xiaomi’s President Lu Weibing mentioned that there are about 20 million users in the premium segment who might be interested in purchasing the SU7. The company showcased the car at Mobile World Congress in Barcelona and revealed the vehicle’s exterior and technology in Beijing late last year.
Lei Jun’s announcement of the SU7 entering the electric car market in China comes as sales of new energy vehicles, including battery-only powered cars, have surged to account for about one-third of new passenger cars sold in the country. With the SU7 priced competitively against other electric sedan models in the market, Xiaomi is aiming to grab a share of the growing electric car market in China. While the initial focus will be on selling the SU7 to consumers in China, the company may consider launching the car overseas in the future, although that could take at least two to three years.
As Xiaomi challenges Tesla’s dominance in the electric car market in China, the launch of the SU7 signals the company’s ambition to expand beyond smartphones and enter new markets. With a focus on building an ecosystem of connected devices, Xiaomi is looking to position itself as a player in the rapidly growing electric car industry. The competitive pricing of the SU7 compared to other electric sedan models in China reflects Xiaomi’s strategy to capture market share and appeal to consumers looking for an affordable electric car option.
