Xiaomi, the popularized Chinese smartphone maker, has made an impactful entry into the electric vehicle (EV) market with its debut car, the SU7. Revealed at a ceremony in Beijing, Xiaomi’s CEO and founder, Lei Jun, expressed his anticipation for the dawn of a new era in smart cars, drawing parallels with the groundbreaking success of Tesla. The initial batch of 5,000 cars, labeled as the “Founder’s Edition,” was swiftly claimed by over 100,000 eager buyers, indicative of robust demand.
Despite the impressive reception, Xiaomi faces challenges ahead, with anticipated wait times of four to seven months for interested customers. However, this hasn’t dampened investor enthusiasm, as evidenced by the surge in Xiaomi’s shares following the SU7’s unveiling. Despite concerns about potential losses per vehicle in the near term, Xiaomi’s valuation soared to $55 billion, surpassing that of traditional U.S. automakers like General Motors and Ford. Such a value could give the company an advantage if they ever did decide to market and sell vehicles in the U.S.
The SU7’s competitive pricing, starting at under $30,000 for the base model, positions Xiaomi favorably in China’s competitive EV market, where it faces established players like Tesla. Analysts highlight Xiaomi’s advantage of having deeper financial resources compared to many EV startups, along with its expertise in smartphone technology, which could translate into innovative features for smart dashboards, a feature highly valued by Chinese consumers.
Xiaomi’s expansion into EVs marks a significant milestone for the company and aligns with Lei’s vision, announced in 2021, to invest $10 billion in the auto business as a final major venture. With its strong revenue base derived from smartphone sales, Xiaomi is poised to make a substantial impact in the burgeoning EV industry, leveraging its resources and technological prowess to carve out a significant market share. No word if Xiaomi will eye the US market but we wouldn’t be surprised if the thought is looming in the eyes of investors and company ownership.
