Xiaomi Launches ‘Dream Electric Car’ with Built-in Air Conditioning, Electric Rice Cooker, and Range of 830 km on a Single Charge
A month after Apple abandoned its decade-long project to manufacture the Apple Car, their competitor Xiaomi, the world’s third-largest smartphone manufacturer, has unveiled its first electric car. This is seen as the beginning of Xiaomi’s ambitious efforts to become one of the top 5 car manufacturers globally.
The Launch of Xiaomi’s Speed Ultra 7
Xiaomi recently held an event in Beijing to introduce their new electric sedan, the Speed Ultra 7. Priced at 215,900 NDT (29,867 USD), the vehicle will be available in Xiaomi stores across China starting this week. This competitive price point positions the Speed Ultra 7 favorably against Tesla’s standard Model 3, priced at 237,900 NDT.
When asked about Apple’s cancellation of Project Titan, the company’s car project, Xiaomi’s CEO Lei Jun stated, “If I were Tim Cook, I would never do that.” In contrast to Apple, Xiaomi considers their car project to be their final business endeavor. However, the launch of their first car coincides with a fierce price war in the Chinese market and the abundance of choices, which poses challenges for Xiaomi’s development.
The Electric Car Market and Competition
Electric cars currently account for around one-third of new car sales in the world’s largest automobile market, China. Analysts and executives predict a consolidation phase where both traditional automakers and new entrants compete in the market.
Concerns also arise in the US and Europe that as domestic demand slows in China, the country’s electric car exports may flood international markets, raising concerns about unfair trade practices and national security.
Xiaomi’s Bold Entry into the Automotive Industry
Xiaomi’s first car was developed in just three years, highlighting the highly competitive and leading position of China’s electric vehicle industry. Another top Chinese smartphone manufacturer, Huawei, has also made significant strides with its Aito brand, with their M7 model ranking fourth in Chinese electric car sales this year.
Li Yanwei, a member of the China Automobile Dealers Association Expert Committee, acknowledged that Xiaomi faces challenges from traditional car manufacturers such as Tesla, BMW, BYD, and Geely’s Zeekr, who have been implementing aggressive price reductions. Li emphasized, “These companies leave little room for the SU7.”
Xiaomi’s Vision for the Future
Nevertheless, CEO Lei Jun positions the SU7 as a “dream car” that competes with Tesla and Porsche, offering superior acceleration and performance. Lei has committed to investing $10 billion in the electric car project over the next decade with the goal of becoming one of the world’s top 5 car manufacturers within 15 to 20 years. Lei stated, “Xiaomi Auto is striving to enhance China’s position in the automotive industry.”
According to Tycho de Feijter, an expert on the Chinese automotive market at the Clingendael research organization in the Netherlands, “Chinese companies are not afraid to try new things, whereas corporations like Apple are too large to make quick decisions.”
Xiaomi’s 5-seater car boasts an operating system that connects with smartphones and household devices such as air conditioners and electric rice cookers, allowing users to control various devices while on the move.
Xiaomi’s Advantage and Challenges
Yale Zhang, founder of Automotive Foresight consultancy in Shanghai, notes that Xiaomi benefits from its strong supply chain expertise in consumer electronics production, which supports its car business. The SU7 boasts a range of up to 830 km on a single charge, a top speed of 265 km/h, and accelerates from 0 to 100 km/h in just 2.78 seconds. These specifications are considered “perfect” by Ivan Lam, a smartphone analyst at Counterpoint Research.
Xiaomi has also partnered with several suppliers, including leading battery manufacturer CATL, BYD, and electric motor manufacturer Inovance.
However, analysts point out the mismatch between the price-conscious Xiaomi smartphone users and the target customers of the high-end SU7, who Lei describes as “knowledgeable” technology enthusiasts with discerning taste.
Xiaomi’s Journey in the Automobile Industry
Established in 2010, Xiaomi has gained a reputation as a value-for-money smartphone brand, offering top-notch specifications at affordable prices. While the company has recently made inroads into the premium smartphone market, it still has a long way to go in reshaping its image as a provider of mass-market products.
“Can you imagine a Xiaomi smartphone user who can afford a car worth over 200,000 NDT?” asks automotive analyst Zhang.
Xiaomi’s financial results for the year demonstrate strong cash flow generated by its core smartphone business, which can support the loss-making electric car project. Lam states, “Finding the next explosive growth point is crucial for Xiaomi, a publicly listed company, not to mention that the automobile market is ten times larger than the smartphone market.”
Xiaomi is also one of the few latecomers to China’s electric vehicle party who has received favorable treatment from Beijing. To address the growing overcapacity issue in a highly competitive market, the Chinese government has tightened licensing requirements. Xiaomi secured a partnership with state-owned automaker BAIC, allowing them to produce cars at a factory located in the outskirts of Beijing, with the capacity to churn out an SU7 every 76 seconds.
De Feijter, the automotive analyst, expresses, “Being a latecomer can bring a sense of novelty to everyone. The Chinese electric car market remains vibrant and has enough space for a new brand to develop.”
According to Financial Times