Chinese smartphone manufacturer Xiaomi unveiled its maiden electric vehicle on Thursday and immediately set a goal to become one of the world’s top five automakers in 15 to 20 years and compete against Tesla Inc. and Porsche AG.
The sedan, nicknamed the SU7, where SU stands for Speed Ultra, is a highly anticipated model. CEO Lei Jun praised it for its “super electric motor” technology, which he says can achieve acceleration speeds faster than both Tesla and Porsche’s electric vehicles.
However, the car’s launch, slated for sales to begin in several months, comes at a challenging time as China’s auto market – the largest globally – grapples with oversupply and slowing demand, leading to fierce price competition.
Despite these challenges, Xiaomi’s Chief Executive, Lei Jun, expressed grand aspirations during the unveiling, stating, “By working hard over the next 15 to 20 years, we aim to become one of the world’s top five automakers, striving to elevate China’s overall automobile industry.”
He added that these plans include constructing “a dream car comparable to Porsche and Tesla.”
With its shared operating system with Xiaomi’s popular phones and other electronics, the SU7 is expected to attract customers. Drivers will be able to access the company’s existing suite of mobile apps seamlessly.
Bill Russo, CEO of the Shanghai-based advisory firm Automobility, pointed out, “Xiaomi is a well-established consumer electronics brand with hundreds of millions of ‘Mi Fans’, or members of its smart device ecosystem.”
“They have a significant opportunity to break through as the automobile becomes a smart device,” Russo added.
The SU7 will be available in two variants – one with a single-charge range of up to 668 km (415 miles) and another that can cover up to 800 km. This compares favorably with the driving range of Tesla’s Model S, which is up to 650 km.
Lei mentioned that the pricing has not yet been finalized, but commented, “the cost will indeed be a bit high, but everyone will think it’s justified.”
Targeting consumers concerned about winter during one of China’s coldest Decembers on record, Lei showcased the SU7’s capability to fast-charge in low temperatures and its advanced tech that detects obstacles in challenging conditions such as falling snow.
Additionally, Lei highlighted that the autonomous driving capabilities of Xiaomi’s cars would be industry-leading.
Despite these ambitions, Xiaomi’s share price did not benefit, ending 0.3% lower in Hong Kong.
As the fifth-largest smartphone maker in China, Xiaomi has been expanding beyond its principal business into EVs, a strategy announced in 2021. Other Chinese tech firms, including telecom behemoth Huawei and search engine company Baidu, have also collaborated with automakers to develop EVs.
Xiaomi has committed to invest $10 billion in autos over the next decade. It’s one of the few newcomers in China’s EV market to receive approval from authorities wary of exacerbating the oversupply problem.
The vehicles will be manufactured by a BAIC Group subsidiary, a state-owned automaker, in a Beijing factory capable of producing 200,000 vehicles annually.
In a highly competitive Chinese EV market, Xiaomi’s biggest challenger is likely to be BYD, which holds a one-third market share, while Tesla commands 9%, according to Zheshang Securities’ third-quarter figures.
