 "Xiaomi's SU7 EV has been very well received in the market and is getting a lot of orders. Image Credit: Reuters")
Chinese tech giant Xiaomi, which has so far been a force to reckon with in smartphone manufacturing, seems to be now all geared up to take the auto industry with equal gusto.
Xiaomi has secured an impressive 75,723 orders for its new SU7 electric sedan as of April this month, and plans to deliver over 10,000 units by June, according to founder Lei Jun who said in a statement on Thursday.
During an event at the Beijing auto show’s first media day, Lei Jun revealed that the delivery goal sets a new record for an electric vehicle (EV) startup. These orders, locked in with non-refundable deposits, have flooded in within just a month since the SU7’s late March launch.
Xiaomi is targeting more than 100,000 deliveries for the SU7 this year and intends to maintain a steadfast focus on the Chinese market for the next three years, Lei said in an investor meeting.
To meet demand, Xiaomi accelerated deliveries of the standard and Max versions of the SU7 to April 18, twelve days ahead of schedule. The company also plans to introduce Pro models by the end of May.
The SU7’s debut, inspired by Porsche’s styling cues, comes with a pricing strategy undercutting Tesla’s Model 3, igniting a fierce EV price war in China’s mammoth auto market. Competing automakers have announced price cuts and subsidies in response to Xiaomi’s entry.
During Thursday’s briefing, Lei Jun acknowledged that Xiaomi’s auto team of 6,000 is insufficient, calling for global talent to join the company’s automotive ambitions.
The SU7, also known as the Speed Ultra 7, enters a competitive Chinese EV market with an enticing base model price tag of under $30,000, positioning it as a more affordable option than Tesla’s Model 3 in China.
Impact Shorts
View AllAnalysts recognize Xiaomi’s advantage over many EV startups due to its substantial resources and expertise in smartphones. Robust pre-orders for the SU7 indicate strong demand, with potential wait times of four to seven months for buyers.
Xiaomi has already produced 5,000 SU7 vehicles, dubbed the “Founder’s Edition.” The special edition, limited production version of the EV comes with additional accessories for early purchasers.
Lei Jun announced on social media that deliveries of the initial batch of SU7 vehicles would start across 28 Chinese cities soon. Although Xiaomi is losing some money on the SU7, they are bullish about the EV venture and have committed an investment of $10 billion in the auto business. Some analysts, however, foresee Xiaomi losing a significant amount of money and estimate a net loss of 4.1 billion yuan or about $566.82 million based on projected sales volume.
Xiaomi’s competition in China, however, is wary of the position Xiaomi holds in the Chinese market thanks to its presence in practically every segment of the tech and electronics industry. In response to the SU7’s launch, other Chinese EV brands have announced price cuts and subsidies. Xiaomi has urged suppliers to ramp up production to meet the soaring demand for the SU7.
(With inputs from agencies)