Xiaomi’s SU7 EV Launch- China’s Big Moment Arrives On Auto World Stage

For years, the Chinese desire to grab pole position in the next phase of the automobile industry, or the transition to EVs, has been no secret. The sector offers the largest know manufacturing opportunity, and taken along with the many ancillary industries it supports, is a huge manufacturing multiplier for any economy. Witness how India’s auto sector is estimated to be almost 40% of the organised manufacturing sector  in the country. For China, dominating the next phase of the auto sector was almost a dogma, which it has backed with massive investments into the most critical part of the supply chain, Lithium Ion batteries. From controlling access to key raw materials to manufacturing at scale, Chinese firms have dominated the battery market. So much so that even leading Western brands from Tesla to Volkwagen to BMW and more depend on Chinese suppliers for their EVs.

China’s strategy for dominance has seen China leading in battery factory investments, accounting for 74 per cent of global spending, besides 6 of the top 10 global battery makers.  State subsidies have been used cleverly to ensure battery manufacturers  scale up fast, leaving little margin for competitors elsewhere to make an impact. As things stand today, even in areas like solid state batteries, it is Chinese battery makers leading the charge, effectively seeking a global dominance for the next two decades and more.

Now, with the launch of cars that have grabbed global attention like Xiaomi’s SU7, China is flexing its EV muscles where it matters. Front and centre of the global auto market. While another battery maker turned auto maker, BYD has already been making inroads, the Xiaomi launch stands out for the background of the firm, the kind of features it is offering, and of course, the final stamp of Chinese intent, the pricing. Ironically, Xiaomi has launched an EV less than a year after a firm it is widely compared to, and allegedly copies, Apple, gave up on its own EV plans. Lei Jun, the visionary co-founder and CEO of Xiaomi, was long dubbed the Steve Jobs of China. He might finally be ready to come out of that long shadow.

With fellow mobile and telecom maker Huawei also plying an EV now, why are Chinese electronics makers in this market? Because according to them, the future of cars is transforming from mechanics-driven to consumer electronics-focused. This future, Lei predicts, will see a handful of dominant players controlling a staggering 80% of the market share. A trillion dollar market worth fighting for.

With a stated ambition to sell 10 million units per annum within this decade, the SU7 shouts to be taken seriously, considering its development within 3 years from planning to ground breaking of the factory to launch, a miracle by auto standards. Priced competitively at 215,900 yuan ($29,872) for the standard version and 299,900 yuan for the Max version, the SU7 squarely targets Tesla and BYD in the EV market. With a minimum range of 700km (435 miles), the SU7 shares its operating system with Xiaomi’s other devices, capitalizing on its established customer base.  The features lend credence to its claim to deliver a premium European car at the price of a Japanese and Korean brand. By comparison, the Tesla Model 3 costs almost $40,000, with fewer features.

With claims of over 100,000 bookings made within 100 minutes of opening, the car is sold out for 2024, which will be some relief for EV makers in other markets that allow Chinese imports freely. But they have been forewarned.