Beijing, China — Xiaomi Group has attracted a lot of attention when it announces an investment of up to US$10 billion to develop its first electric vehicle, the SU7, targeting market segments from entry-level to luxury. Although the Su7 electric car made its debut in China in December last year, the exact price remains a mystery. Lu Weibing, a company executive, revealed that the official ** press conference is about to be held, and hinted that deliveries to domestic consumers will start in the second quarter.
xiaomi su7
As a leader in the global smartphone market, Xiaomi is loved by consumers for its cost-effective products. According to Canalys data, Xiaomi's global market share in 2023 will be about 13%, second only to Apple and Samsung, and smartphone shipments will reach 146.4 billion units. In recent years, Xiaomi has expanded its business to the field of TVs and home appliances, controlling through smartphones, using a minimalist white design style, and products other than mobile phones account for less than 30% of revenue.
In the electric vehicle market, even industry giants such as BYD are also engaged in a first-class war, which makes Xiaomi's high-end electric vehicle market positioning in question. But Mr. Lu said Xiaomi had made significant progress since then, building on the development of its ecosystem and its smartphone premiumization strategy, which was launched in 2020.
While benchmarking against Apple, Xiaomi's competitors in the smartphone space also include Huawei. Huawei's Mate60 Pro has been welcomed by the market due to its positioning between Xiaomi and Apple products**, with shipments in the domestic market in Q4 increasing by 47% year-on-year, surpassing Xiaomi.
Huawei has not only succeeded in the smartphone space, but has also quickly entered the electric vehicle market, launching AITO-branded models and selling its HarmonyOS operating system to several automakers. In addition, Huawei has carved out a niche in the market by showcasing some high-end models such as the AITO M9 SUV in smartphone stores.
Not far behind, Xiaomi is not far behind in ecosystem development, launching the HyperOS operating system last fall, which learns user behavior through artificial intelligence technology and automatically adjusts connected smart home devices. Lu Weibing summed up this strategy as "people x cars x homes", which heralds Xiaomi's introduction of HyperOS into home appliances and upcoming cars in the coming months.
Investing heavily in ecosystem and car development, Xiaomi aims to gain a foothold in the increasingly competitive market in the future. Lu Weibing predicts that in the next 10 to 20 years, the competitive landscape of the electric vehicle market will be similar to that of today's smartphone market, with the top five brands accounting for about 70% of the market share.
To achieve self-sufficiency, Xiaomi plans to build its own factory to produce its own key components. The company announced earlier this month that its new smartphone factory in Beijing was operational with an annual production capacity of more than 10 million devices. Although the manufacturer of the SU7 is currently a subsidiary of a state-owned enterprise, Xiaomi said it has no more information to share publicly at this time.
In addition to the domestic market, Xiaomi is also eyeing overseas expansion. In the past six years, 40 to 50 percent of revenue has come from outside China's market, mainly in Europe and India, Lu said. He also stressed that while the political environment has made Xiaomi's path to globalization more difficult, the company will overcome these challenges by building internal capabilities and product diversification.
As for when Xiaomi's electric vehicles will enter overseas markets, Lu Weibing said that it usually takes two to three years. This means that even if the SU7 goes on sale in China this year, overseas consumers may not see it until 2026 or later.
With its long-term strategy in terms of technology and product diversification, Xiaomi has demonstrated its ambition to consolidate its position as a global tech giant. Lu's remarks not only underscore Xiaomi's confidence in its technology and ecosystem strategy, but also reflect the company's determination to pursue innovation and global expansion. Despite the challenges, Xiaomi is taking the necessary steps to ensure that it remains competitive and relevant in the global tech industry for years to come.
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