Xiaomi to start deliveries of its first electric car

WEB DESK: In a strategic move to tap into the thriving electric vehicle (EV) sector, Chinese tech giant Xiaomi has announced the imminent launch of its debut EV model, the Speed Ultra 7 (SU7).

The company revealed that deliveries are set to commence this month, marking its entry into the competitive landscape of the world’s largest auto market amid a fierce price war.

Xiaomi, renowned as China’s fifth-largest smartphone manufacturer, shared the news via a Weibo post, highlighting its widespread availability, with 59 stores across 29 cities nationwide ready to accept orders.

The highly anticipated launch event is scheduled for March 28, where the pricing details of the new EV will be unveiled. Notably, Xiaomi’s shares experienced a 7 per cent surge during morning trade, reflecting positive market sentiment.

The Chinese EV market has witnessed 18 per cent growth in sales during January–February, closely trailing the 21 per cent increase observed throughout 2023.

This surge comes amidst a wave of aggressive price reductions spearheaded by market leader BYD (002594.SZ), aimed at enticing consumers amidst a softening of domestic demand.

Xiaomi’s Chief Executive, Lei Jun, expressed ambitious goals during the unveiling of the SU7 sedan in December, stating the company’s aspiration to rank among the top five global automakers.

Boasting cutting-edge “super electric motor” technology, Lei asserted that the SU7 could achieve acceleration speeds surpassing both Tesla (TSLA.O) and Porsche’s EVs.

Industry analysts anticipate strong consumer appeal, noting the shared operating system between Xiaomi’s popular phones and electronic devices with the SU7.

This integration is seen as a strategic move to leverage the existing customer base of the tech giant.

Xiaomi’s foray into the EV market aligns with its broader diversification strategy, responding to plateauing demand for smartphones that was initially signalled in 2021. Production of the SU7 will take place in a Beijing factory operated by a unit of state-owned automaker BAIC Group (1958.HK), with an annual capacity of 200,000 vehicles.

Underscoring its commitment to the EV venture, Xiaomi has earmarked a substantial $10 billion investment over the past decade.

Notably, the company stands out as one of the few new entrants in China’s EV market to secure approval from authorities, who have exercised caution in the face of a potential supply glut.