China | Xiaomi markets its first electric car

(Beijing) The Chinese electronics giant Xiaomi, which has been preparing its entry into the automobile industry for years, is marketing its first electric car on Thursday in China, where a price war is raging in this very competitive market.

The brand is essential in the country for smartphones, touchscreen tablets, connected watches, headphones, scooters and even scooters, but also smart rice pressure cookers.

Xiaomi, headquartered in Beijing, announced in 2021 that it would launch into the highly coveted niche of electric vehicles, on which many Chinese brands are putting the turbo on.

The group is marketing its Xiaomi SU7 (“Speed ​​Ultra” 7), a sedan whose design is reminiscent of a luxury sports car.

The SU7 is equipped with a sound system which “recreates the thrill of driving a sports car”, specifies Xiaomi, which in this niche enters into head-on competition with the Chinese electric champion BYD and the American Tesla.

With this arrival in the automobile industry, “I am putting my reputation on the line,” warned Xiaomi boss Lei Jun on the social network X, while other ambitious Chinese competitors have failed to establish themselves.

Evergrande NEV, a subsidiary of the debt-ridden real estate group, gave itself “three to five years” when it was created in 2019 to become the “most powerful” manufacturer in the world in the field of electric cars.

The brand is now at stake for its survival, weakened by the setbacks of its parent company and sales which are struggling to take off. Evergrande NEV announced on Wednesday that it had sold only 1,389 vehicles in total.

Pricing strategy

Xiaomi has not yet disclosed the price of its car. But his boss had mentioned less than 500,000 yuan (approximately $94,000).

Analysts expect it to be half as much.

“The 200,000-250,000 yuan range is currently the most competitive range in China for electric vehicles,” underlines one of them, Johnson Wan of the investment bank Jefferies, interviewed by the Bloomberg agency.

Xiaomi is the world's number three smartphone maker. His experience in this field served as a basis for the automobile and in particular for determining prices.

“I think the first buyers (of SU7) will be our smartphone users. So this is our strategy,” Xiaomi president Lu Weibing explained last month to the American channel CNBC.

The launch of the SU7 comes after BYD reported record annual profit in 2023 on Tuesday.

The Chinese electricity market has experienced rapid development in recent years, driven in particular by purchasing subsidies, which however disappeared at the end of December 2022.

To keep up the pace against a backdrop of economic slowdown, dozens of local manufacturers have embarked on a price war in China, at the risk of weakening their profitability.