Xiaomi Enters Electric Vehicle Market: Unveiling the SU7 - A Game Changer or Risky Move?
Chinese smartphone maker Xiaomi debuted a sporty electric vehicle on
Thursday that was priced lower than Tesla's Model 3 and featured styling cues
from Porsche, underscoring the fierce competition from new competitors in the
already crowded EV market in China.
During a two-hour long event, Xiaomi CEO and founder Lei Jun told a pack
room, whose attendees included Chinese EV manufacturers Neo and Expeng owner
that the standard SU7 EV models would cost the CNY 215,900 ($29,872.02 or about
Rs 24,89,948) respectively, while the Pro and Max versions would have CNY
245,900 (about Rs 28,35,934) and CNY 299,900 (about Rs 34,58,709).
This is 30,000 (CNY) cheaper than Model 3, he said. Tesla’s Model 3
starts from CNY 245,900 in China.
He also said that many of the SU7 capabilities, which have prepared
comparison with Porsche’s Tecan and Panamera models, are more than Tesla and
Porsche. For example, its minimum limit of 700 km defeats 567 km of Tesla Model
3, Lei said.
The launch fulfills the goal of Xiaomi's founder, who declared the
company's intention to pursue electric vehicles in 2021 and committed to
investing $10 billion, or roughly Rs 83,348 crore, in their auto business as
his final significant business venture. The company formed a manufacturing
partnership with the state-owned automaker BAIC group and first demonstrated
the SU7 - low for speed Ultra 7 - Sedan, in December.
The company, which is best known for a wide range of its smartphone and
affordable devices, started taking orders from 10 o’clock to SU7 Beijing time
(1400 GMT) and said In the first twenty-seven minutes, it received 50,000
orders.
The distribution for the standard and maximum models will begin at the
end of April, and the Pro models will follow by the end of May.
Lei also said that the change in car manufacturing from electronics was
not easy. In three years of developing this car, my biggest receipt is that
making a car is extremely difficult. Even a huge like Apple left on it, Lei
said. So today, every person who is still firm in making a car is the hero of
our time. """
He said by the end of this year, SU7 will go on sale in 211 shops in 39
Chinese cities. If Xiaomi intends to sell cars overseas, that information is
unknown.
price war
Analysts have been divided into whether Xiaomi’s car project will
succeed or not. Some say it’s a natural expansion for the company, whose rice
cooker, air purifier and other electronics are all over the Chinese homes.
But SU7 marks a departure as an inexpensive brand from the company’s
image.Can Chinese consumers make the transition from mass-market, stylish,
reasonably priced home goods and consumer goods to high-end electric vehicles?
Additionally, the car's release coincides with a challenging period for
the Chinese auto industry.
The current market environment is quite challenging for new people,
constantly expanding their market share with the top 10 players, Gavikal
Dragonomics analyst Ernan Kui said.
Xiaomi runs the risk of being a long-term profit dragger for the company
if it can't sell on a large scale quickly.
Working in favor of Xiaomi, however, is revenue generated by other
businesses, China Auto Insight said.
Moreover, analysts say Xiaomi’s smartphone expertise comes to smart
cockpits, when it gives a lead on traditional automokers – a feature Chinese
consumer award.
SU7 uses the company’s self-developed hyper OS as an operating system
that connects EV users with its other devices, including smartphones.
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