Tesla is already facing stiff competition in China from local giant BYD, and the electric vehicle landscape is about to get even tougher with a new player entering the fray. Xiaomi, a company primarily recognized for its smartphones and gadgets, revealed its first electric vehicle for the Chinese market last year. The official launch on Thursday unveiled the pricing for its new SU7, surprising many with its affordability.
Xiaomi’s CEO, Lei Jun, announced that the standard model of the SU7 would be priced at 215,900 yuan (around $30,000), which is lower than many anticipated. However, according to CNBC, this means Xiaomi will sell each vehicle at a loss. This price point is especially striking when compared to Tesla’s Model 3, which starts at 245,900 yuan (approximately $34,000) in China.
Lei boldly claimed that the SU7 surpasses Tesla’s Model 3 in more than 90% of its specifications. He highlighted that the SU7 has a minimum driving range of 435 miles (700 kilometers), which is about 58 miles (93 kilometers) more than the Model 3.
Tesla’s first electric vehicles from its sole factory in China began production in 2019. Lately, Tesla has been reducing its prices to stay competitive against BYD and other electric vehicle manufacturers in China’s lucrative market. BYD achieved a milestone by selling a record 526,000 battery-only vehicles globally in the last quarter of the previous year, surpassing Tesla for that quarter. However, for the entire year of 2023, Tesla maintained its lead.
In the coming months, Tesla’s management will likely be paying close attention to the Chinese market, especially with Xiaomi’s impressive early sales figures. Xiaomi reported over 50,000 orders for the SU7 within the first 27 minutes of its availability on Thursday, and deliveries are set to begin next month.
Xiaomi plans to invest $10 billion in its automotive ventures over the next decade, with ambitions to enter the global market in a couple of years. The company also aims to be one of the top five automakers worldwide within the next 15 to 20 years.