Xiaomi, a major player in the smartphone industry, is stepping into the electric vehicle (EV) market in China with its debut model, SU7. The company announced on Tuesday that deliveries of SU7 will commence on March 28, marking its entry into the world's largest auto market amidst intense competition.
In a recent Weibo post, Xiaomi revealed that orders for SU7 can be placed at 59 stores across 29 cities nationwide. A grand launch event is scheduled for March 28, where the price of the new EV will be unveiled. Following this announcement, Xiaomi's shares surged by 7% during morning trade.
The decision to venture into EVs comes at a time when China's EV sales have been steadily increasing, with an 18% rise observed in January-February. This growth is not far behind the 21% increase witnessed throughout 2023. However, the market has been witnessing aggressive price cuts, led by major players like BYD, in response to weakening domestic demand.
At the unveiling of SU7 sedan last December, Xiaomi's CEO Lei Jun expressed ambitions for the company to rank among the top five automakers globally. He highlighted the advanced technology integrated into SU7, boasting of its "super electric motor" capable of outpacing EVs from renowned brands like Tesla and Porsche.
Analysts anticipate that Xiaomi's strategy of integrating the car's operating system with its popular smartphones and electronic devices will resonate well with its existing customer base.
Xiaomi's foray into EVs marks a strategic shift from its core smartphone business, which has been experiencing stagnant demand. The company first hinted at its automotive ambitions back in 2021. Production of Xiaomi's cars will be handled by a subsidiary of the state-owned BAIC Group at a Beijing factory with an annual capacity of 200,000 vehicles.
To support its automotive endeavors, Xiaomi has committed to investing $10 billion over the next decade. Despite authorities' reluctance to further saturate the EV market, Xiaomi is among the few new players to receive approval, positioning itself to compete in this rapidly evolving industry.
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