Xiaomi, a well-known manufacturer of smart consumer gadgets in China, is entering the competitive but rapidly expanding electric vehicle industry in that nation.
The tech startup will begin accepting reservations for the SU7, a sporty four-door car, on Thursday night in Beijing, after a launch event featuring founder Lei Jun. Analysts predict that it will cost between 300,000 and 40,000 yuan.
China now has the biggest market for electric cars worldwide thanks to government subsidies, and a plethora of new manufacturers are engaged in intense rivalry. Although domestic sales have accounted for the majority of the industry’s sales, Chinese automakers are attempting to compete with the big European, Japanese, and American automakers by entering international markets with more affordable models.
Lei seems unafraid of the task; at the SU7 introduction in December, she said that Xiaomi, a Beijing-based company, wants to rank among the top five automakers in the world over the next 15 to 20 years.
A corporate press release cited him as stating, “I think that one day, Xiaomi EVs will be a familiar sight on roads around the world.”
Established in 2010, Xiaomi is a newcomer to an already saturated sector that experts predict will see a shakeout in the next several years, with less successful businesses going out of business.
According to Fitch Ratings, the proportion of EVs and hybrids in China’s vehicle sales is expected to increase from 36% in 2023 to 42% to 45% this year. However, the government said in a study from December that the automakers’ short-term market share and profitability may be impacted by the competition.
Xiaomi, which is well-known for its reasonably priced smartphones, smart TVs, and other gadgets, hopes to take use of this technology by integrating its automobiles with its phones and household appliances to create what it refers to as a “Human x Car x Home” ecosystem.
According to Tu Le, the head of the consultancy Sino Auto Insights, Xiaomi is attempting to complete the loop by include transportation in a range of products that are already incorporated into the personal and professional life of its clients.
“The holy grail for tech companies is being able to seamlessly be a continuous part of someone’s life,” he said via email. “It’s unlikely that you know anyone in Beijing who doesn’t own a Xiaomi device, whether it’s a tablet, computer, TV, phone, or air purifier.”
As a startup in the auto industry, the business is speculating that it can create a vehicle that consumers would be interested in, he said. In light of the slowing Chinese economy and the continuous competition over EV prices, he estimated that it would take a year or two to determine whether Xiaomi could successfully adjust and learn from its mistakes.
Le said, “They have an advantage because they are a technology company, but they also need to learn how to be a tech company that builds cars, so they need to reconcile that with drinking through a fire hose.”
The financial research company CreditSights predicted that Xiaomi’s EV subsidiary will sell 60,000 cars in its first year and turn a profit in the following two due to significant marketing and promotion expenses.
Chinese manufacturers encounter political obstacles while attempting to grow overseas.
To find out whether Chinese subsidies offer made-in-China electric vehicles an unfair competitive advantage abroad, the EU is looking into the matter. Last month, the United States initiated a probe into connected vehicles built in China that it claims have the potential to collect private data about their owners.
President Joe Biden said, “China is determined to dominate the future of the auto market, including by using unfair practices,” upon the announcement of the U.S. probe. “China’s plans might put our national security at danger by flooding our market with its automobiles. That is not going to occur on my watch.
This week, China retaliated by submitting a protest to the World Trade Organization, claiming that American subsidies for electric cars unfairly target Chinese goods.
Due to suspected ties to China’s military, the U.S. Defense Department placed Xiaomi on a blacklist in 2021. However, when the business refuted the allegations and filed a lawsuit against the government, the list was withdrawn a few months later.
