Xiaomi, often dubbed the “Apple of China,” has long been recognized for its extensive range of consumer electronics—most notably smartphones. The company’s positioning as a strong competitor to established giants like Samsung has made it a household name not only in China but globally. More than just smartphones, Xiaomi’s offerings include smartwatches, electric scooters, and home automation devices, all characterized by stylish designs and affordability. However, a surprising twist in its trajectory is the emergence of Xiaomi as a notable player in the automotive sector, specifically within the growing electric vehicle (EV) market.
In March 2024, Xiaomi Auto, an arm of the company dedicated to the automobile market, launched its first electric vehicle, the SU7. Despite entering a highly competitive landscape dominated by established players, Xiaomi’s foray has garnered remarkable attention. Within a day of its release, the SU7 amassed an incredible 90,000 pre-orders, unveiling a robust consumer demand that many industry experts did not anticipate. Such explosive sales figures potentially position the SU7 as one of the fastest-selling cars ever.
The SU7 is designed as a sleek electric sedan, drawing comparisons to luxury models like the Porsche Taycan. However, it’s not just about aesthetics; Xiaomi has ensured that the SU7 performs exceptionally well on the racetrack too. The SU7 Ultra version, which boasts a staggering 1,500 horsepower, recently broke records at the Nurburgring racetrack, outperforming renowned competitors such as the Rimac Nevera and the Porsche Taycan Turbo GT by a remarkable margin of over 15 seconds.
While the accomplishments of the SU7 and its Ultra counterpart are commendable, it’s crucial to approach these claims with some skepticism. The Nurburgring lap record was set using a prototype vehicle that is not street-legal, which raises questions about its practical applicability for regular consumers. Additionally, this record, although impressive, does not eclipse the existing electric vehicle lap records set by the Nio EP9 and the Volkswagen ID.R, the latter of which remains unbeaten with an astonishing time of 6:05.3.
While Xiaomi’s record-breaking achievements may capture headlines, their implications for the average consumer remain uncertain. One notable point is that while Xiaomi Auto is experiencing skyrocketing demand and impressive sales figures, this is its first venture into the automotive industry. Comparisons to brands that have had several years to develop and perfect their EV offerings, like XPeng, provide a clearer context regarding Xiaomi’s swift success.
Another significant indicator of Xiaomi’s potential in the automotive market is the company’s overall financial health. In November 2024, Xiaomi announced a staggering 30.5% increase in third-quarter revenue, demonstrating that the company’s diversification strategy into vehicles is yielding positive results. Mark Rainford, a noted expert in the Chinese automotive industry, has pointed out that Xiaomi has exceeded delivery forecasts that were previously set at 76,000 units, now projected to reach 130,000 by the end of the year.
In an unexpected acknowledgment of Xiaomi’s rise, Ford CEO Jim Farley remarked on his own experience with a Xiaomi car, expressing surprise at the quality and appeal of the vehicle. His endorsement indicates that the perception of Xiaomi is shifting from a tech-centric company to a serious contender in the automobile industry—a transition that could reframe the competitive landscape.
Xiaomi’s entry into the EV space comes with strategic advantages. The SU7 starts at under $30,000, making it more affordable than the widely popular Tesla Model 3 in China. Moreover, the ambitious automobile manufacturer has set its sights on maintaining production within its own facilities, a rarity among new automobile startups. While many of Xiaomi’s competitors have chosen to outsource production, Xiaomi appears committed to mastering its supply chain and production processes.
As more consumers express interest in electric vehicles and sustainable practices become critical, Xiaomi stands poised to capture market share from competitors. However, this burgeoning market is filled with established players, each with strategies honed over years of experience. Companies like BYD and the newly ambitious MG also pose significant competition, especially in international markets.
Xiaomi’s venture into electric vehicles is a bold and ambitious move that has already yielded extraordinary results. With robust sales figures, record-breaking performance on racetracks, and endorsements from industry leaders, the company has quickly established itself as a potential game-changer in the EV market. Nevertheless, the road ahead is filled with challenges, ranging from maintaining production quality to competing against both domestic and international automotive giants. How Xiaomi navigates this complex landscape in the coming years could define its place not just in China but on a global stage as a serious automotive contender.