Photo credit © Xiaomi Corporation
(Boursier.com) — Xiaomi is going on the offensive in the electric car market. The Chinese smartphone giant has revealed the price of its SU7 sedan: the base model costs 215,900 yuan (around $29,900) while the SU7 Max is marketed from 299,900 yuan. Xiaomi hopes to begin deliveries by the end of April. The cars are sold in 59 stores in 29 Chinese cities. All SU7 models will for now only be sold in China, the world’s largest auto market.
At the end of December, co-founder Lei Jun made no secret of his ambition to offer “a dream car comparable to Porsche and Tesla”. “By working hard over the next 15 to 20 years, we will become one of the five largest automobile manufacturers in the world by striving to develop the Chinese automobile industry as a whole,” he said during the evening of presentation of the SU7. The vehicles will be assembled in a factory in Beijing with a capacity of 200,000 vehicles per year in collaboration with the state-owned manufacturer BAIC Group.
Xiaomi’s entry into the electric automobile segment comes at a time when the market is slowing and competition has never been so fierce. A sign of this difficult context, Apple recently threw in the towel after a decade of efforts to design a fully autonomous electric vehicle. “I didn’t expect Apple to resign,” Lei Jun said on stage in Beijing on Wednesday, in front of tens of millions of people tuned in to local streaming platforms.
It now remains to be seen whether Lei Jun will succeed in the bet of his life. For some, Xiaomi’s move upmarket may pose a problem. “Can (Chinese consumers) make this psychological leap from cool, cheap, mainstream consumer and home products to high-end electric vehicles?” Tu Le, founder of consultancy Sino Auto Insights. “The current market environment is quite challenging for new entrants, with the top 10 players continuously increasing their market share,” adds Ernan Cui, analyst at Gavekal Dragonomics. “If Xiaomi fails to sell on a large scale in a short period of time, it (editor’s note: the automotive business) risks becoming a drag on the company’s profits for longer.”
Other analysts say Xiaomi’s expertise in smartphones gives it an advantage over traditional automakers when it comes to smart cockpits, a feature popular with Chinese consumers. A case to follow closely.
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