Tue. Jun 25th, 2024

The ‘connected’ vehicle from Xiaomi, a manufacturer of smartphones, is China’s most recent electric vehicle.

By Jennifer Apr 1, 2024
The Xiaomi SU7 on display at the tech company’s flagship store in Beijing on Monday.Jia Tianyong / China News Service via Getty Images

An established manufacturer of intelligent consumer goods in China, Xiaomi is entering the congested but rapidly growing electric vehicle sector in the nation.

After a founder Lei Jun launch ceremony in Beijing on Thursday night, the tech business will begin accepting orders for the SU7, a sporty four-door vehicle. The price range that analysts predict it will be in is 300,000 yuan ($40,000).

Xiaomi SU7 Is The Chinese Smartphone Giant's First Electric Car, Packs Up  To 800 Km Range - ZigWheels
Xiaomi SU7 Is The Chinese Smartphone Giant’s First Electric Car, Packs Up To 800 Km Range – ZigWheels

With the aid of government subsidies, China has emerged as the global leader in the electric car industry, with several new manufacturers engaged in intense rivalry. The bulk of the industry’s sales have been in the United States, Europe, and Asia, but Chinese automakers are attempting to compete in other countries by offering more affordable models.

Not one to back down from a challenge, Lei said at the SU7 announcement in December that Xiaomi, headquartered in Beijing, wants to rank among the top five automakers in the world over the next 15 to 20 years.

According to a press statement from the firm, he expressed his belief that Xiaomi electric vehicles would eventually become a common sight on roadways worldwide.

Since its founding in 2010, Xiaomi has entered a congested sector that experts predict will have a shakeout in the next years, with less successful businesses going out of business.

Fitch Ratings projects that the total percentage of electric and hybrid vehicles in China’s car sales will increase from 36% in 2023 to 42% to 45% this year. In a December study, the agency did note, however, that the competition may put pressure on manufacturers’ short-term profitability and market share.

Xiaomi intends to take use of this technology by integrating its automobiles with its phones and home appliances in what it terms a “Human x Car x Home” ecosystem. Xiaomi is well-known for its reasonably priced smartphones, smart TVs, and other gadgets.

According to Tu Le, the founder of Sino Auto Insights, a consultancy, Xiaomi is attempting to complete the loop by incorporating transportation into a range of products that are already a part of its consumers’ personal and work life.

Chinese smartphone giant Xiaomi's electric car project hits regulatory  roadblock | HT Auto
Chinese smartphone giant Xiaomi’s electric car project hits regulatory roadblock | HT Auto

In an email answer, he said, “The holy grail for tech companies is the ability to seamlessly be a continuous part of someone’s life.” “It’s highly unlikely that anyone in Beijing you know doesn’t own at least one Xiaomi product, whether it’s a tablet, computer, TV, phone, or air purifier.”

The business, being a novice in the auto industry, is speculating that it can create a vehicle that consumers would be interested in, he added. He estimated that it would take a year or two to determine whether Xiaomi could adjust to remedy any mistakes and succeed, given the weak Chinese economy and the current EV pricing war.

“Their advantage is that they are a technology company, but in order to learn how to be a tech company that builds cars, they need to reconcile that with drinking through a fire hose,” Le said.

According to financial research company CreditSights, Xiaomi’s EV subsidiary is expected to sell 60,000 cars in its first year and incur losses for the first two due to hefty marketing and promotion expenses.

Political obstacles stand in the way of Chinese manufacturers looking to go outside.

The European Union is looking into Chinese subsidies to see whether they unfairly provide Chinese-made electric vehicles a competitive edge in foreign markets. Last month, the United States stated that it was opening an inquiry into Chinese-manufactured connected vehicles that may be collecting private data about their owners.

When the U.S. probe was revealed, President Joe Biden said, “China is determined to dominate the future of the auto market, including by using unfair practices.” China’s measures run the risk of flooding our market with its automobiles, endangering the security of our country. I refuse to allow such to occur under my supervision.

China retaliated this week, claiming in a World Trade Organization lawsuit that American subsidies for electric cars unfairly target Chinese goods.

A few months after the business refuted the allegations and filed a lawsuit against the US government, the U.S. Defense Department withdrew Xiaomi off its blacklist due to purported ties to China’s military.

By Jennifer

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