Why Did Xiaomi Hop Into the EV Race?

Why Did Xiaomi Hop Into the EV Race?

What happens when a brand that’s world-renowned for producing cost-effective yet performance-heavy smartphones starts to dabble in the world of electric vehicles? Apparently, it has a 4 billion dollar market value and a chance to compete against the likes of Porsche and Tesla! While it was surprising for everyone to see Xiaomi dipping their toes in the world of Electric vehicles, it can be equally confusing to understand the reason they wanted to do this alongside other EVs. Was it a calculated risk they took with a foresight of potential long-running advantage, or was there something else? Let’s find out.

Lofty Ambitions

In their launch event, considered  a technical milestone, Lei Jun, the CEO of Xiaomi, extensively discussed the features of Xiaomis Magnum Opus, the SU7. These features include but are not limited to an impressive range of approximately 800 kilometers per charge, fancy adjustable spoilers, a bunch of unique color setups to choose from, and a top speed of approximately two hundred sixty-five kilometers per hour! Apart from looking breathtakingly beautiful and eerily similar to a design we’ve seen before, the SU7 is a five-seat sedan that utilizes batteries carefully crafted by top Chinese manufacturers called “Contemporary Amperex Technology Co. Ltd. and BYD Co., with a choice between single and dual motor configuration options to choose from. Lei Jun’s bold attempt to make an impact on the EV Market signifies a 10 billion dollar investment, to reflect the similar success Xiaomi achieved through their smartphone sales. They call it a disruptive approach as their innovative approach to launching any new yet high-end products in the market at a competitive price often leads to a challenge to the already-established brands.

Upon release, the SU7 comes boasting an impressive level of acceleration, being able to hit 100 kph in approximately 5.28 seconds. The battery comes with a 73.6 kWh capacity which allows a normal variant of the SU7 to travel approximately 668 kilometers in range, under the China Light-Duty Vehicle Test Cycle standard.

However, the main standout feature turns out to be its in-car operating system called HyperOS, which offers far more than your average infotainment system. It offers a combined power of AI, connectivity, and a user-centric design on the SU7.

car operating system called HyperOS

Acting as the brain of the SU7 smart cabin, HyperOS was designed to seamlessly integrate the SU7 with the driver’s digital life and of course, the Xiaomi ecosystem in general. By connecting your car, you’ll get Xiaomi’s vision of an ecosystem which they call it Human X Car X Home Ecosystem. And this ecosystem is not only exclusive to Xiaomi brands but is compatible with pretty much any existing ecosystem in the market. Alongside, Xiaomi also utilizes Xiaomi HyperMind, an AI Assistant that continuously tracks your driving habits and preferences and anticipates your individual needs so it can make automated suggestions for things like navigation, climate control, and even music based on your taste. It features a sleek and intuitive interface, with a large, high-resolution central display that acts as the primary hub.

Xiaomi SU7

Xiaomi’s EV Gameplan

Now, the elephant in the room is the design of the car itself. You see, the similarity with Porsche, the Taycan in particular, isn’t just an “Accident” or coincidence. You see, a lot of people might end up rumouring about how Xiaomi is practically ripping off the design from Porsche and Tesla and accusing them of not having any sense of originality. When approached regarding the issue, Xiaomi explained that they’re not imitating the design completely, but using the design as a form of “Inspiration”. With Xiaomi’s SU7, you’re basically getting a Porsche that’s NOT a Porsche.

Xiaomi’s SU7 EV Gameplan

Now regardless of the similarity, Lei Jun’s ambitions saw a ton of uncertainty, especially since his EV announcement back in 2021.

China’s regulatory and competitive landscape has been going through an overhaul, and the car market on a global scale has significantly shifted since then. The regulatory hurdles in China are a pretty common occurrence, such as manufacturing permit limitations, which made partnering up with Beijing Automotive Group Co. for EV Production more than a necessity for Xiaomi.

The EV industry was pretty unstable after the year 2022 which just complicated the whole situation even further. Regardless, Xiaomi decided to join in on a crowded marketplace with a ton of choices to get inspired by. They could’ve easily chosen an already existing brand that’s in play or production, namely “Ford”, “McLaren” or “Volkswagen”, but they decided to go with the design of the Porsche Taycan and Tesla since it went well with their vision. While Lei Jun positioned the SU7 alongside the Taycan Turbo and the Tesla Model S in terms of performance and technological features, he proposed a relatively minimized price tag for this classic Xiaomi. It means the SU7 will be more affordable, but the exact price is yet to be revealed. With the analysis of market speculation, he did hint at the price surpassing the rumored 99,000 yuan, whereas models that rock similar specs often come bearing a price tag of over 400,000 yuan.

If we look at Tesla’s statistics, we can see how Tesla sold over 387,000 vehicles, but only 89,064 of them were delivered in China, signifying a 9% drop from the previous year. However, Porsche delivered around 3,600 Tycan EVs in 2023 alone, according to China Automotive Technology and Research Center.

EV industry

An Evolving Process

With an attempt to evolve from their roots as “Budget Smartphone Manufacturers”, Xiaomi is determined to enter into the saturated global market, and thus they decided to invest in the EV Market despite encountering a rough period. Ever since their full commitment to the SU7 Project and competitors like Huawei Technologies Co., Mr. Lei personally tested over 150 automobiles. And from that comparison, he described the SU7 as a “Performance Beast” that makes a perfect combination of technology, performance, and sophistication.

Xiaomi is determined to enter into the saturated global market

Even though China eliminated its 11-year EV Purchase Subsidy Policy back in 2022, there are some local authorities  that still offer financial incentives and tax rebates. They do it with the objective of promoting investment and consumer subsidies, all while still continuing to lead in global EV sales. Now even without the subsidies, China still boasts the world’s largest auto market and saw a hefty 29% increase in EV Sales year-to-date as of September. This reflects the global EV Market which experienced a steady 34% growth in the same period.

Aggressive Marketing

Now sales aren’t the only reason why you’re witnessing aggressive marketing attempts from Xiaomi. BYD Auto, one of the top-selling electric car manufacturers in the world is one of their top competitors for obvious reasons. And since Xiaomi has a track record of hiring employees who have experience working for their competitors, it’s obvious for them to stay in the loop about  the inside news of their competitors. It could have been possible that Xioami upon launching their EVs anticipated that BYD was making technologically advanced and affordable EVs. Which is why they waited till BYD released their own one. There are more than a few reasons for Xiaomi to go down this path. First up, they wanted to see what sort of responses BYD would end up with – positive or negative. Xiaomi as a giant company will not leave a stone unturned to learn about its competitors’ pros and cons, so it could apply them to its most sought-after EVs With all of these combined, the aggressive marketing and the timing of the release were a bit later than BYD, and it was all because Xiaomi wanted to analyze the performance of BYD.

performance of BYD

Shadow Tactics

Lei Jun himself is a big fan of Apple, and he couldn’t help but wonder why they stopped producing its EV Model. Soon, he stopped wondering and did the deed himself, taking advantage and guaranteeing they’d beat the market with the hopes of replacing Apple itself. But how?

Imagine Apple revealing that they’ve been actually working on an EV in secret and now it’s time to reveal it to the world. How much do you think they would cost? As for Apple, your estimated pricing guess cannot be lower given that all of their products launched so far have always demanded a soaring price, Apple doesn’t have a history of compromising with their price, even if that turns out to be out of reach for regular people. You see, here’s where Xiaomi takes the advantage, just like the way they popularized their smartphones and got massive recognition from the average consumers, especially from continents or countries where Apple or Tesla would be pretty expensive, and that’s without including their 250-500% taxation in most cases.

A Safe Exit

If all else fails, such as Xiaomi’s market share or the phone industry finds itself into any kind of unfortunate incident that happened with Huawei, the EV industry could act as Xiaomi’s effective Plan B.

Xiaomi’s effective Plan B

They can easily sustain themselves with their EV business in the long run. Why? We’ve seen how in the long run, pretty much any vehicle production business is profitable, just as long as the business is maintained properly, and the EV industry is just ripe for the taking, especially in 2024. If Xiaomi can make a good sale with the SU7, it’s hard to argue against Xiaomi’s success in this venture as well. And we’ve seen Xiaomi working wonders before, considering how they successfully released their very own E-Bike not too long ago, meaning the EV industry isn’t exactly uncharted territory for Xiaomi.

With the SU7, Xiaomi is also contributing to the overall “Reverting Earth Back To Green” mindset, by making their vehicle emission and pollution-free. This is even more impactful when we take into consideration how China, despite tremendous progress, is still the 13th most polluted country in the whole world.

Xiaomi can make a good sale with the SU7


At this point, it’s undeniable how Xiaomi knows about making software for phones, the internet, and how technology works in general. However, Xiaomi AND the world are completely new to learning how AI and self-driving cars function and the limitations that come with them, so it might be hard for them to jump ahead of the competition right on day one, especially compared with the companies that have been doing the same thing for decades now.

how AI and self-driving cars function

The question remains, can Xiaomi end up making EVs that are just perfect in every way? And by perfect, we don’t mean with over-the-top, 22nd-century tech stuffed in, by perfect we mean good at being a car at heart, and ticking the boxes like the driving feel and safety while keeping the price range manageable. As you can imagine, this is nowhere near an easy thing to manage, especially considering they’re new to this and don’t come with an advantage in making cars or the smart tech that assists in amplifying said cars. Regardless, the SU7 looks to be a step in the right direction, and if this goes on, who knows, the likes of Porsche or Tesla should start being worried.

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Fatema Farha

Farha is a passionate writer with a keen interest in exploring diverse topics ranging from technology and science to literature and philosophy. With a background in B.Sc in CSE, Farha brings a unique perspective to each piece, combining analytical thinking with creativity to engage readers.