Xiaomi’s Electric Car Revealed, $4k Cheaper Than Tesla Amid Competition

Amidst fierce competition in China’s electric car market, Xiaomi announced its entry with the SU7 priced at 215,900 yuan ($30,408), undercutting Tesla’s Model 3. CEO Lei Jun admitted this price would mean selling each car at a loss.

In Beijing, Xiaomi, the Chinese smartphone giant, announced on Thursday its entry into the electric vehicle market with the launch of its inaugural car model. Positioned as a formidable contender against Tesla’s Model 3, Xiaomi’s CEO, Lei Jun, revealed that the base variant of the SU7 will be priced at 215,900 yuan ($30,408) in China, a figure that signals the company’s willingness to absorb losses per unit sold.

Comparatively, Tesla’s Model 3 begins at 245,900 yuan in the Chinese market. Lei Jun emphasized that despite the aggressive pricing strategy, the SU7 outperforms the Model 3 on over 90% of its specifications, with the exception of two aspects where Xiaomi anticipates catching up with Tesla within the next three to five years. Notably, the SU7 boasts a minimum driving range of 700 kilometers (approximately 435 miles), surpassing the Model 3’s 606 kilometers.

Within just 27 minutes of the sales launch at 10 p.m. Beijing time on Thursday, Xiaomi reported receiving orders for over 50,000 units, underlining the strong initial demand for the SU7.

Overall, Xiaomi’s debut into the electric car arena signifies a significant escalation in the competitive landscape of China’s electric car market, characterized by intense price competition and technological advancements.

Xiaomi’s Electric Car Launch and Production Capacity

Lei Jun, the CEO of Xiaomi, shared that deliveries for the SU7 are expected to begin by the end of April. He also mentioned that Xiaomi’s car factory operates with advanced automation, capable of producing a new SU7 vehicle every 76 seconds. However, it’s uncertain if the factory is fully operational.

Earlier Statements by Lei Jun

Recently, Lei Jun expressed on social media his belief that the SU7 would be the top choice for sedans priced “under 500,000 yuan” ($69,328).

Competitive Landscape in China’s Automotive Market

Xiaomi enters a highly competitive automotive market in China, where companies are introducing numerous new models and slashing prices to stay competitive. Notably, Huawei, a major telecommunications company, has teamed up with traditional automakers to launch the Aito brand, often showcased in Huawei smartphone stores.

Comparison with Tesla’s Model 3

Tesla’s Model 3 holds the title of the best-selling new energy sedan in China, offering a minimum driving range of 600 kilometers (372 miles) and a price below 500,000 yuan, as per data from industry source Autohome.

Pricing Comparison with Competing Models

• According to Autohome, the Han sedan by BYD is priced starting from 169,800 yuan.
• Nio’s ET5 begins at 298,000 yuan, whereas Xpeng’s P7 starts at 209,900 yuan, as indicated by the data.
• Additionally, the Zeekr 007 sedan, owned by Geely, also starts at 209,900 yuan, as per Autohome’s information.

Rise in Sales of New Energy Vehicles

• In China, sales of new energy vehicles, including battery-only powered cars, have witnessed a significant surge, now constituting approximately one-third of all new passenger cars sold, according to the China Passenger Car Association.

These comparisons offer insight into the diverse pricing landscape and the growing popularity of new energy vehicles in the Chinese automotive market.

Xiaomi’s Electric Car: Accessories and Features

The launch event for the Xiaomi SU7 featured prominent figures from rival electric car startups such as Nio, Xpeng, and Li Auto.

During the event, Lei showcased various accessories for the SU7, including an in-car refrigerator, a custom front-window shade, and a smartphone holder. Some of these accessories are offered for free with a car purchase before the end of April, while others are available for separate purchase.

Lei also highlighted the SU7’s compatibility with Apple’s CarPlay and its ability to integrate with the iPad. Additionally, he unveiled driver-assist technology tailored for both highway and city driving, slated for full availability in China by August.

Comparative Technological Advancements

While Tesla offers Autopilot for highway driving assistance in China, its “Full Self-Driving” feature for city streets has not yet been introduced in the country.

Acknowledging Aspirations and Future Plans

Lei previously expressed Xiaomi’s ambition to compete with Porsche at a car technology event in December. However, he acknowledged that the SU7 electric car has progress to make before reaching this premium level. He announced the forthcoming release of the “Max” version of the SU7, positioned as a competitor to Porsche’s Taycan, priced at 299,900 yuan.

Xiaomi’s Device Ecosystem

The SU7 represents a key component of Xiaomi’s recent initiative, termed the “Human x Car x Home” strategy. This strategy aims to establish a comprehensive ecosystem of interconnected devices, all powered by Xiaomi’s innovative HyperOS operating system. While the majority of Xiaomi’s revenue is derived from smartphone sales, approximately 30% is generated from sales of appliances and various other consumer products.

Transition to Premium Products

Despite Xiaomi’s reputation for offering affordable products, Lu Weibing, the company’s President, revealed to CNBC earlier this year that Xiaomi has been actively pursuing a strategy of premiumization since 2020. He noted that there exists a sizable market of around 20 million users in this higher price segment who may be potential purchasers of the SU7.

Market Expansion Plans

Lu mentioned to CNBC that initially, the SU7 will be exclusively available to consumers in China. However, he also indicated that any international launch is likely to be at least two to three years away.

Global Showcasing

The company showcased the SU7 at the Mobile World Congress held in Barcelona in late February. This followed an earlier reveal of the vehicle’s exterior and technological features in Beijing in late December.

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