While Apple recently abandoned its electric car project, Chinese tech giant Xiaomi is stepping on the gas. Their Beijing headquarters hosted a splashy launch event in March for their first electric vehicle, the Speed Ultra 7, or SU7 for short.
Xiaomi is offering competitive pricing for its new electric vehicle. The base model, the SU7, starts at 215,900 yuan (roughly $30,000), undercutting Tesla’s Model 3 in China by about $4,000. Higher-tier versions, the Pro and Max, are priced at 245,900 yuan ($34,000) and 299,900 yuan ($41,500) respectively.
Xiaomi’s electric car launch appears to be a hit. According to CarNewsChina, the company secured a whopping 50,000 confirmed orders within just half an hour. This achievement is particularly impressive for Xiaomi CEO Lei Jun, considering it’s only been three years since the company announced its expansion into electric vehicles from its core business of consumer electronics.
Xiaomi’s CEO, Lei Jun, went all in on understanding the electric car market. In December, he shared on X (ex-Twitter) about personally test-driving 100 different cars. This dedication to “learning from the strengths of each one” seems to be paying off. Xiaomi boasts that their SU7 can accelerate from 0 to 100 kilometers per hour in a scorching 2.78 seconds, suggesting a highly competitive electric vehicle.
Jun, is clearly enthusiastic about the company’s electric vehicle venture. On a social media platform likely called X, he recently expressed his continued motivation by stating, “‘Fight for Xiaomi EV’ continues to fuel me and the team. We remain determined to make a great car!” This statement comes just ahead of the 3rd anniversary of Xiaomi’s foray into electric vehicle manufacturing.
While Apple might be their main rival in smartphones, Xiaomi is making a name for itself in electric vehicles too. Data shows Xiaomi holds a respectable 13.8% share of the Chinese smartphone market in the first part of 2024, trailing closely behind Apple’s 15.7%.
So, the question remains: how did Xiaomi succeed where Apple stumbled? After a decade of development, Apple pulled the plug on its electric car project due to production hurdles. This forced them to scale back their ambitions for autonomous vehicles and face potential delays until at least 2028.
Apple seemed to be making some progress on their electric car in 2020, with reports of a self-driving minivan prototype called the “Bread Loaf” being tested in Arizona. However, the project required significant further development, and the financial burden became too much. According to Bloomberg, Apple was spending around $1 billion a year on the car program, which they ultimately deemed unsustainable.
Unlike Apple, which struggled with in-house production, Xiaomi capitalized on China’s established electric vehicle infrastructure. A key advantage was their partnership with the Beijing Automotive Group (BAIG). This collaboration, according to Bloomberg, helped Xiaomi secure a manufacturing permit quickly and potentially produce up to 200,000 electric vehicles annually.
Despite the splashy launch, Xiaomi’s electric vehicle journey isn’t without risks. The Chinese EV market is facing a slowdown in demand, and established players like Tesla and BYD are fiercely competing on price. Xiaomi’s strategy targets the higher-end segment, which could be a tough sell in this climate. They’ll need to navigate these challenges to achieve long-term success.
Xiaomi’s swift execution stands in contrast to years of planning by Apple. Their success in launching an electric vehicle highlights the potential advantage of adaptability and leveraging existing resources.