BEIJING (AP) – A Xiaomia well-known smart consumer electronics manufacturer in China, is entering the eletric cars of the country, which is expanding but crowded, with a high-tech sports sedan.
The technology company said it would begin accepting orders in China via an app on Thursday evening after founder Lei Jun wrapped up a more than two-hour presentation on the SU7 car by announcing the long-awaited range. price: 215,900 yuan to 299,900 yuan (US$30,000 to US$40,000).
Government subsidies have helped make China the world’s biggest market for electric vehicles, and a group of new manufacturers is fighting fierce competition. Most of the industry’s sales have been domestic, but Chinese manufacturers are entering foreign markets with lower-priced models, posing a potential challenge to European, Japanese and American auto giants.
Lei was not shy about this challenge, saying that Beijing-based Xiaomi aims to become one of the world’s top five automakers in the next 15 to 20 years. It’s hard to make cars, he told an audience at a live-streamed presentation at a convention center, but added that it’s cool to be successful.
The combined share of electric and hybrid vehicles in China’s auto sales is expected to reach 42% or 45% this year, up from 36% in 2023, according to Fitch Ratings. But the ratings agency said in a December report that competition could pressure automakers’ market share and profitability in the near term.
Lei said Xiaomi would lose money on the base model at 215,900 yuan, a price that undercuts the Tesla Model 3 in China. He stated that the SU7 outperformed the Tesla in most categories, although the top-of-the-line version falls short of the Porsche Taycan.
“There is still a long way to go for our car to become a porsche”, he said, but that if Xiaomi continues to strive for five to ten years, “one day we will end up surpassing Porsche”.
Known for its affordable smartphones, smart TVs and other devices, Xiaomi aims to capitalize on this technology by connecting its cars with its phones and home appliances in what it calls a “Human x Car x Home” ecosystem.
Lei introduced the SU7 as a high-performance vehicle with a long range before highlighting its smart features, such as talking to a delivery person from the car when the doorbell rings at home. In an allusion to the iPhone’s popularity, he said the system would be compatible with Apple and Xiaomi phones.
Tu Le, founder of consultancy Sino Auto Insights, said that Xiaomi is trying to close the loop by adding transportation to a product mix already integrated into its customers’ personal and professional lives.
“The ability to be an ongoing part of someone’s life is the holy grail for technology companies,” he said in an email response. “You probably don’t know anyone in Beijing who doesn’t have at least one Xiaomi product, be it a cell phone, computer, TV, (air) purifier or tablet.”
As a newcomer to the auto industry, the company is making an educated guess that it can design and develop a car it will sell, he said. Given the sluggish Chinese economy and the current electric vehicle price war, he predicted it would take a year or two to see if Xiaomi could adapt to correct any mistakes and succeed.
“They’re a technology company, so that’s their advantage, but they have to balance that with the fact that they’re drinking from a firehose to learn how to be a technology company that makes cars,” Le said.
CreditSights, a financial research firm, said it expects Xiaomi EV’s electric vehicle division to sell 60,000 vehicles in its first year and lose money in the first two years due to high marketing and promotion costs.
Chinese automakers trying to expand abroad face political obstacles.
A European Union is investigating Chinese subsidies to determine whether they give Chinese-made electric vehicles an unfair advantage in the international market. The US announced an investigation last month into Chinese-made connected cars that it said could collect sensitive information about their drivers.
“China is determined to dominate the future of the automotive market, including using unfair practices,” said the president Joe Biden when the US investigation was announced. “China’s policies could flood our market with their vehicles, putting our national security at risk. I will not allow this to happen on my watch.”
China reacted this week, filing a complaint with World Trade Organization (WTO)claiming that US subsidies for electric vehicles discriminate against Chinese products.
The US Department of Defense blacklisted Xiaomi in 2021 because of alleged ties to China’s military, but removed it a few months later after the company denied the links and sued the US government.
Tags: smartphone electric car Xiaomis plan biggest global automakers
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