Xiaomi, the Chinese smartphone giant battling Tesla, is taking orders for its first electric vehicle. At what price?

Chinese smartphone maker Xiaomi is set to launch its first electric vehicle (EV). Orders will be taken starting Thursday, March 28, 2024.

This non-official xiaomi SU7 display page is excellent, clear https://t.co/4uff2w4PxU pic.twitter.com/Ts8x0AuSPF
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The company’s chief executive Lei Jun said this week that the Speed Ultra 7 (SU7) will be priced under 500,000 yuan ($69,186; £54,836). Thus, the technology giant will compete with Tesla and BYD, according to BBC News.

Xiaomi’s entry into the electric car market comes as sales growth has slowed globally, sparking a price war. The firm hopes to attract existing customers through the operating system shared with phones, laptops and other devices.

Up to 200,000 vehicles per year

Xiaomi is the third-largest smartphone seller worldwide, with a market share of about 12 percent, according to research firm Counterpoint.

The SU7 model, which Xiaomi has been testing since last year, has drawn comparisons with the Porsche Taycan and Panamera sports car models. It will be made by a unit of state-owned carmaker BAIC Group at a factory in Beijing that can produce up to 200,000 vehicles a year.

Xiaomi su7 factory pic.twitter.com/JkCb1YOkrU
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“While getting this far is a real achievement in itself, the ultimate achievement would be to demonstrate that there is a consumer market for Xiaomi as a smart electric vehicle brand,” Automobility’s Bill Russo told the BBC.

The electric car market, full of challenges

In an indication of the challenges facing tech firms looking to produce electric cars, iPhone maker Apple last month scrapped plans to build an electric vehicle.

Russo added that Xiaomi’s entry into the car market reflects its confidence “in the relevance of their brand” in China, while Apple did not see enough potential in the electric vehicle market outside of China.

Xiaomi said it would invest $10bn (£7.9bn) in its vehicle business over the next 10 years.

Xiaomi SU7 purple color. The launch conference is going to be held later today in China. Xiaomi XiaomiSU7 pic.twitter.com/EmZmgyPo3Q

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“The Chinese electric vehicle market is very mature and creates a very stable ecosystem for electric vehicle manufacturers. For example, the battery supply chain is very strong and the charging network in the country is also growing to cater to the growing supply of electric vehicles,” said Abhishek Murali of research firm Rystad Energy.

The launch of Xiaomi’s first car comes as a price war in China’s electric vehicle market has intensified.

Tesla, which is led by billionaire Elon Musk, has slashed the costs of its cars in China by thousands of dollars in recent months as local rivals such as the world’s top-selling electric vehicle maker, BYD, cut prices.

The world’s biggest auto market is already crowded, so Xiaomi is one of the few potential new entrants to win regulatory approval as officials try to limit the new wave of manufacturers.

Earlier this week, BYD posted record annual profits but said the growth trend had slowed towards the end of last year.

Shanghai-based electric car maker Nio cut its forecast for first-quarter deliveries on Wednesday as consumers tightened spending as China’s economic growth weakens.

US electric vehicle giant Tesla is set to announce its delivery numbers for the first three months of 2024 next week.

At the same time, governments around the world are trying to limit imports of foreign-made electric vehicles.

On Tuesday, Beijing initiated dispute settlement proceedings against the US at the World Trade Organization to challenge “discriminatory subsidies” under the US Deflation Act.

Meanwhile, the European Union has launched an investigation into whether Chinese government subsidies have helped the country’s electric car makers outbid European-made models.