Chinese electronics giant Xiaomi is set to make a bold entrance into the electric vehicle market with the launch of its first car, the SU7, on Thursday. CEO Lei Jun has teased that the sedan will be priced under 500,000 yuan ($69,400), positioning it as a direct competitor to established players like Tesla in China's crowded and cutthroat EV market.
In a post on Chinese social media service Weibo, Lei stated, "The goal of the Xiaomi SU7 is to be the best looking, best driving, and most intelligent sedan under 500,000 yuan." This marks the first time Xiaomi has confirmed the upper end of the price range for its highly anticipated EV.
The SU7, short for Speed Ultra 7, is currently on display at 76 Xiaomi stores across 29 Chinese cities, with prospective customers and car enthusiasts lining up to get a closer look at the vehicle's sleek design and various color options. The company has also launched its "Xiaomi Car" app on Chinese app stores, further building anticipation for the official launch and order-taking on Thursday.
Xiaomi Group President Weibing Lu previously told CNBC that the company is targeting the premium segment of the electric car market, putting it in direct competition with the likes of Tesla, BYD, Nio, Xpeng, and Li Auto. For comparison, Tesla's Model S sedan starts at 698,900 yuan, while the Model 3 begins at 245,900 yuan in China.
The SU7 will be available in two versions, one with a driving range of up to 668km (415 miles) on a single charge and another with a range of up to 800km, surpassing Tesla's Model S, which has a range of up to 650km.
Xiaomi's entry into the EV market comes at a challenging time, with the industry facing a potential slowdown and intense competition. A price war, sparked by Tesla at the end of 2022, has forced other electric car firms to slash prices to stimulate demand and remain competitive, putting pressure on margins and profitability across the board.
Despite the challenges, Xiaomi CEO Lei Jun remains confident in the company's EV venture. "Three years ago, I announced that Xiaomi was going to enter the EV market. This is my final new venture - I am putting my reputation on the line to fight for a vision I deeply believed in," he said in a post on X (formerly Twitter).
Xiaomi's reputation for providing good value in its smartphones and home electronics has generated interest among potential car buyers. Jim Yan, a 28-year-old working in the legal industry who admired the SU7's curves and drag-reducing design, said, "In my mind, Xiaomi's pricing is at most mid-range. If the price is too high, especially since this is their first car, I think it remains to be tested by the market."
Xiaomi has pledged to invest $10 billion in the automotive sector over the next decade and is one of the few new players in China's EV market to gain approval from authorities, who have been reluctant to add to the supply glut. The company's cars are being produced by a unit of state-owned automaker BAIC Group in a Beijing factory with an annual capacity of 200,000 vehicles.
