Xiaomi, the Chinese smartphone manufacturer, is poised to unveil its inaugural electric vehicle (EV) and commence pre-orders on Thursday.
According to the company’s CEO, Lei Jun, the Speed Ultra 7 (SU7) will be priced below 500,000 yuan ($69,186; £54,836).
This strategic move positions Xiaomi to compete directly with industry giants such as Tesla and BYD in the electric car market.
Xiaomi’s foray into electric vehicles coincides with a global slowdown in sales growth, prompting a competitive price battle across the industry.
The company aims to leverage its existing customer base by integrating the SU7’s operating system with its smartphones, laptops, and other devices, offering a seamless user experience.
According to research firm Counterpoint, Xiaomi holds the third position globally in smartphone sales, commanding a market share of approximately 12%.
The SU7, which Xiaomi has been teasing since last year, has garnered comparisons to Porsche’s Taycan and Panamera sports car models.
Manufactured by a unit of state-owned car manufacturer BAIC Group, the SU7 will be produced at a Beijing plant with a capacity of up to 200,000 vehicles annually.
Bill Russo of Automobility emphasized to the BBC that while Xiaomi’s progress is commendable, the true test lies in demonstrating consumer demand for Xiaomi as a smart EV brand.
In contrast, Apple reportedly abandoned its plans to develop an EV last month, indicating the challenges faced by technology firms venturing into the electric car market.
Mr. Russo noted that Xiaomi’s venture into the car industry underscores its confidence in the brand’s relevance in China, unlike Apple, which deemed the global EV market less promising.
Xiaomi has pledged to invest $10 billion (£7.9 billion) in its vehicle business over the next decade.
Abhishek Murali from Rystad Energy highlighted the maturity of China’s EV market, citing robust battery supply chains and expanding charging infrastructure.
Xiaomi’s debut in the automotive sector coincides with escalating price competition in China’s EV market.
In recent months, Tesla, spearheaded by multi-billionaire Elon Musk, has significantly reduced the prices of its vehicles in China by thousands of dollars. This move comes in response to local competitors such as the world’s leading EV manufacturer, BYD, also implementing price cuts.
The automotive landscape in the world’s largest car market is already densely populated, making Xiaomi one of the few new entrants to secure approval from authorities amidst efforts to regulate the influx of new players.
Earlier this week, BYD reported record annual profits; however, it noted a slowdown in growth towards the end of last year.
Meanwhile, Nio, a Shanghai-based electric car manufacturer, revised down its first-quarter delivery forecast, attributing the adjustment to tightened consumer spending amid China’s weakening economic growth.
Tesla, the American EV behemoth, is slated to unveil its delivery figures for the first quarter of 2024 next week.
