Features
19 Mar 24

Consumer Electronics Giant Xiaomi starts deliveries of first BEV

China's renowned appliance and smartphone maker Xiaomi has announced its entry into the EV market with the launch of its first model, the SU7. Set to commence deliveries this month, Xiaomi aims to leverage its brand strength and technological acumen to achieve a significant presence in the world's largest auto market.

It's increasingly common to see new OEMs unveiling their new BEV. What's notable is the trend among these emerging brands to blend different sectors through joint ventures. In this example, a collaboration between high-tech appliance company and traditional OEMs (BAIC). This trend underscores the profound transformation taking place in the automotive industry.

Market

The announcement comes amidst a fierce price war in the Chinese auto industry, with Xiaomi strategically positioning itself to capture market share. With 59 stores across 29 cities ready to take orders, Xiaomi is gearing up for a grand launch event scheduled for March 28, where the pricing details of the SU7 will be unveiled.

The market response to Xiaomi's venture has been positive, with the company's shares rallying 7% during morning trade. This move aligns with China's increasing appetite for electric vehicles, with sales witnessing an 18% surge in the first two months of the year, despite a backdrop of a challenging economic environment.

Ambition

At the heart of Xiaomi's EV endeavor is its ambition to rank among the world's top five automakers, a vision articulated by its CEO, Lei Jun. The SU7 sedan boasts cutting-edge technology, including what Lei describes as a "super electric motor" capable of outperforming rivals like Tesla and Porsche in acceleration.

What sets Xiaomi's approach apart is its integration of the car's operating system with its existing ecosystem of smartphones and electronic devices. This synergy is expected to resonate with Xiaomi's vast customer base, offering a seamless transition into the realm of electric vehicles.

From smartphones to smart cars

The decision to diversify into EVs comes as Xiaomi seeks to navigate a plateauing demand for smartphones, a trend observed since 2021. By partnering with a unit of the state-owned automaker BAIC Group, Xiaomi aims to capitalize on the manufacturing expertise and infrastructure already in place, with a production facility in Beijing boasting an annual capacity of 200,000 vehicles.

To fuel its EV ambitions, Xiaomi has committed to investing $10 billion in the automotive sector over the next decade. This significant investment underscores the company's long-term commitment to establishing a formidable presence in China's burgeoning EV market.

Crucially, Xiaomi has secured approval from regulatory authorities, a testament to its adherence to stringent industry standards. In a market grappling with oversupply issues, Xiaomi's entry as a new player is poised to inject fresh competition and innovation into the EV landscape.

Authored by: Yves Helven