China’s Technology giant Xiaomi which reportedly is a notable player in the electronics and smartphone industry has finally stepped into the automotive industry with its first EV, SU7. The Launch event is set to take place on 28th March when the public will get to see the new EV's sticker tag. The fifth-largest smartphone manufacturer in China claims to have 59 locations to accept orders across 29 cities.
Xiaomi's big claims
Xiaomi believes that its step in the automotive industry will give direct competition to top EV brands like Tesla and BYD. Xiaomi's CEO, Lei Jun, declared during the SU7's December unveiling that the company aimed to rank among the top five automakers globally.
According to Lei, the SU7 "super electric motor" technology can accelerate vehicles more quickly than Porsche's and Tesla's (TSLA.O) EVs.
Over the next ten years, the car manufacturer plans to invest $10 billion (£7.8 billion) according to the smartphone behemoth.
Future of Xiaomi and Market Expansion
China saw a 21% increase in EV sales for the entire year of 2023, with sales rising by 18% in January-February. This year, in an attempt to win over customers despite declining domestic demand, market leader BYD (002594. SZ) opened a new tab and initiated a round of steep price cuts.
According to Mr. Lei, "Xiaomi's cars are going from zero to one in a very different growth stage and facing very different user expectations compared to when Xiaomi's smartphones went from zero to one 14 years ago, Xiaomi's cars need to be different, and the most important aspect is smart technology."
Over the next ten years, the car manufacturer plans to invest $10 billion (£7.8 billion) according to Xiaomi. The SU7 will be produced at a Beijing plant able to produce up to 200,000 cars annually by a division of the state-owned automaker BAIC Group. The introduction of Xiaomi Automobile coincides with a growing price war in China's electric vehicle market.
As local competitors like BYD have slashed their prices, multibillionaire Elon Musk's Tesla has recently reduced the price of its cars in China by thousands of dollars. Following today's announcement, Xiaomi shares increased by over 10% in Hong Kong. Also, Xiaomi is among the few newcomers to China's EV market to receive approval from regulatory bodies that have been hesitant to add to a glut of existing supply.