Sarah Wu and Yelin Mo
BEIJING (Reuters) – Chinese smartphone maker Xiaomi (OTC:) launched an electric sports car on Thursday with Porsche styling and a price tag below the Tesla Model 3 (NASDAQ:), highlighting fierce competition from new entrants in an already crowded market. Electric vehicle market in China.
During the two-hour event, Xiaomi CEO and founder Lei Jun told a packed room that included executives from Chinese electric vehicle makers Nio (NYSE:) and Xpeng (NYSE:) that the standard SU7 EV model will cost 215,900 yuan. ($29,872.02), while the Pro and Max versions will cost RMB 245,900 and RMB 299,900 respectively.
“It’s 30,000 yuan cheaper than the Model 3,” he said. The cost of Tesla Model 3 in China starts from 245,900 yuan.
He also said that many of the features of the SU7, which has been compared to the Porsche Taycan and Panamera, are superior to those of Tesla and Porsche. For example, its minimum range of 700 km exceeds the Tesla Model 3’s 567 km range, Ley said.
The launch fits the ambitions of Xiaomi’s founder, who announced the company’s foray into electric vehicles in 2021 and pledged to invest $10 billion in its auto business as the “last major entrepreneurial project” of his life.
The company entered into a production partnership with state-owned automaker BAIC Group and first unveiled the SU7 (short for Speed Ultra 7) sedan in December.
The company, best known for its smartphones and wide range of affordable home appliances, began accepting orders for the SU7 from 10pm Beijing time (1400 GMT) and said it received 50,000 orders within the first 27 minutes.
Standard and Max models will begin shipping at the end of April, and Pro models by the end of May.
Lay also said that the transition from electronics to automobile production was not easy. “What I learned most during the three years of developing this car was that making cars is extremely difficult. Even a giant like Apple (NASDAQ:) has given up on this,” Lay said. “So today, every person who is still persistent in making cars is a hero of our time.”
By the end of this year, SU7 will be available in 211 stores in 39 cities in China, he added. Xiaomi has not said whether it plans to sell the car abroad.
PRICE WAR
Analysts are divided on whether Xiaomi’s car project will be successful. Some say it’s a natural extension of a company whose rice cookers, air purifiers and other electronics are ubiquitous in Chinese homes.
But the SU7 marks a departure from the company’s image as an affordable brand. “Can (Chinese consumers) make the psychological leap from mass-produced, cool, low-cost consumer and home goods to premium electric vehicles?” said Tu Le, founder of consulting company Sino Auto Insights.
In addition, the car will go on sale at a difficult time for the Chinese car market.
“The current market environment is quite challenging for newcomers as the top 10 players are constantly increasing their market share,” said Gavekal Dragonomics analyst Hernan Cui.
“If Xiaomi is unable to sell on a large scale in a short time, it risks becoming a source of profit for the company for a long time.”
However, what works in Xiaomi’s favor is revenue generated from other businesses, said Le of Sino Auto Insights.
What’s more, analysts say Xiaomi’s expertise in smartphones gives it an edge over traditional automakers when it comes to smart cabins, a feature that Chinese consumers value.
SU7 uses proprietary Hyper OS as the operating system that connects EV users to other devices, including smartphones.
($1 = 7.2275 yuan)
(This story has been rewritten to correct grammar in paragraph 2)