Tech giant Xiaomi announced they’ll begin deliveries of their debut electric vehicle, the SU7, in China this very month. This marks their entry into the world’s biggest auto market, which is currently experiencing fierce price competition. The company, known for their smartphones, revealed on Weibo that 29 cities across China will have 59 stores accepting orders. An official launch event is set for March 28th, where the price of the SU7 is expected to be unveiled. The news sent Xiaomi’s stock price soaring 7% during morning trading.
At the unveiling of the SU7 sedan in December, Xiaomi chief executive Lei Jun said the Company plans to become one of the world’s top five carmakers. He also touted the car’s “super electric motor” technology, which can deliver acceleration speeds faster than some Tesla and Porsche models. Analysts say the SU7’s shared operating system with Xiaomi’s popular phones and other electronic devices could attract existing customers.
However, analysts say a steep discount will likely cut Xiaomi’s bottom line, and the Company needs to prove it can make money from its new venture. Unlike other smartphone brands, Xiaomi does not manufacture its products but relies on suppliers to produce them. This allows it to keep prices down and make good margins, but it may not work in mature markets where consumers are not willing to wait long periods to get their hands on a product they have eagerly anticipated.

Xiaomi’s e-car project is being handled by a unit of state-owned automaker BAIC Group, and production is being carried out at a Beijing factory with an annual capacity of 200,000 vehicles. The firm is investing $10 billion over the next decade in its EV business as it seeks to diversify its offerings and offset stagnating smartphone demand.
Despite a stall in the EV industry due to a global supply shortage and fading consumer demand, China has been a bright spot for sales. In January-February, EV sales in the world’s biggest market rose 18%, not far from the 21% increase seen for all of 2023. That was fueled by a series of deeper price cuts by market leader BYD Auto to entice buyers amid weakening domestic demand. EV sales in the country jumped by another 18% this year.