Xiaomi’s entry into the electric vehicle (EV) market has been met with resounding success. The Chinese smartphone maker’s CEO, Lei Jun, announced that sales of their first electric car, the SU7, have been 3-5 times higher than expected. This revelation came as Xiaomi began delivering standard versions of the vehicle to buyers ahead of schedule.
During a livestream on Douyin, which amassed over 34 million viewers, Lei Jun shared this exciting news. Xiaomi’s foray into the EV market has been highly anticipated, and the SU7’s attractive price tag has undoubtedly contributed to its popularity. Priced under $30,000 for the base model, the SU7 is $4,000 cheaper than the base model of Tesla’s Model 3 in China. This affordability has resonated with consumers, propelling sales beyond initial projections.
While Xiaomi expects to incur losses with the SU7, the company’s deep pockets allow it to weather these challenges. Xiaomi has already initiated deliveries from a limited batch of 5,000 Founder’s Edition cars, which come equipped with additional accessories for early buyers. Now, the standard version of the SU7 is being delivered in Beijing and Shenzhen.
Lei Jun also addressed future development plans for Xiaomi’s electric car venture. He stated that Xiaomi does not intend to build off-road vehicles and will primarily focus on the SU7. However, he emphasized the importance of software updates, demanding frequent iterations to improve any issues promptly.
In addition to the standard version, Xiaomi plans to introduce Max models this month and Pro models by the end of May. These variants are expected to further boost Xiaomi’s presence in the EV market.
During the livestream, Lei Jun did not address speculation about a sports utility vehicle (SUV) from Xiaomi. Nevertheless, he was accompanied by Wei Jianjun, CEO of Chinese automaker Great Wall Motor, who praised Xiaomi for developing a car of such caliber within three years.
Xiaomi’s entry into the EV market has had a ripple effect on other Chinese brands with comparable models. Following Xiaomi’s debut, these brands have announced price cuts and subsidies to stay competitive.
Although the Chinese EV market can be challenging for newcomers due to fierce price wars and slowing demand, analysts believe that Xiaomi possesses an advantage. With its deep pockets and expertise in smartphones, Xiaomi understands the importance of smart dashboards – a feature highly valued by Chinese consumers.
Despite its success, analysts predict that Xiaomi may face substantial losses with the SU7. If their projected volume of 60,000 units this year holds true, Citi estimates that the SU7 could result in a net loss of 4.1 billion yuan, averaging 68,000 yuan per car.
Overall, Xiaomi’s venture into the EV market has exceeded expectations. With its affordable price tag and focus on smart features, Xiaomi has made a strong impression on Chinese consumers. As the company continues to deliver its electric cars and expand its lineup, its influence in the industry is expected to grow further.
