Janice R. Andrews
With its first entry into the automotive sector, smartphone giant Xiaomi is taking a risk in the rapidly changing world of electric vehicles (EVs). Xiaomi’s goal with the SU7, their first electric car, is not simply to compete but to establish themselves as a serious contender, evoking comparisons to industry leader Tesla.
With much anticipation, Xiaomi debuted its SU7 vehicle on a recent Thursday in Beijing. Lei Jun, the CEO and millionaire whose name is almost household in China, was the guest of honor at the occasion. Known for his forward-thinking style, Lei Jun wasn’t afraid to compare Tesla, saying, “Isn’t it time for Tesla Model 3 users to upgrade?”
This action is crucial for Tesla, which has been having difficulties in the Chinese market. Concerns have been raised by reports of lower output at its Shanghai facility and a sharp drop in market capitalization. The addition of Xiaomi creates more competition for already strong firms like BYD, which is funded by Warren Buffett.
Lei Jun acknowledged the enormous work that lay ahead and thought back to the difficulties involved in making cars, even bringing up Apple’s shelved EV effort. Xiaomi has made a strategic change by turning its attention to electric vehicles and using its resources and popularity to upend yet another sector.
With its remarkable features, the SU7 claims to be 90% better than the Tesla Model 3. Xiaomi wants to democratize EVs in China by offering a vehicle with a starting price around $30,000 and a minimum driving range of 700 kilometers. Lei Jun, however, acknowledged that Xiaomi will initially lose money on every car sold, placing more emphasis on long-term goals than immediate profits.
Xiaomi’s lone concentration on electric vehicles has its detractors worried about it taking away from their main business. The founder of the consulting firm Sino Auto Insights, Tu Le, emphasizes the danger of ignoring other industries that contributed to Xiaomi’s success. However, Xiaomi’s SU7 has clearly piqued customer attention, with 120,000 definite orders coming in less than 36 hours—a promising beginning in a very competitive industry.
The upcoming years will tell us if Xiaomi’s risk pays off as it sets out on this thrilling trip. Will they become a legitimate rival to Tesla or suffer the same fate as many who misjudged the difficulties facing the EV market? Time will tell. But for the time being, intrigue and excitement have undoubtedly been aroused by Xiaomi’s daring entry into the electric car market.
