Xiaomi Secures 70,000 Orders for SU7 Electric Cars

Chinese tech giant Xiaomi has made significant strides in the electric vehicle (EV) market. Its founder Lei Jun reveals that the company has secured locked-in orders for over 70,000 units of its SU7 electric cars. 

Xiaomi’s foray into automotive manufacturing represents a strategic diversification beyond its core smartphones and home appliances business.

Growing Demand for SU7:

Lei Jun disclosed at an investor conference that Xiaomi aims to deliver more than 100,000 SU7 electric cars in 2024. 

The strong demand evidenced by locked-in orders underscores the market appeal of Xiaomi’s entry into the EV segment, signaling a promising trajectory for its automotive business.

Emphasizing a “100% focus” on the Chinese market for the next three years, Xiaomi intends to consolidate its position domestically before considering international expansion. 

This strategic approach aligns with the company’s objective of establishing a solid foothold in its home market before venturing into global markets.

Competitive Pricing and Market Positioning: 

Xiaomi’s SU7 electric car enters the competitive Chinese EV market with a compelling price proposition, priced at under $30,000 for the base model. 

This aggressive pricing strategy positions the SU7 favorably against competitors such as Tesla’s Model 3, offering consumers an affordable alternative without compromising features or performance.

Challenges and Expectations:

Lei Jun acknowledged that Xiaomi anticipates operating at a slim profit margin for the SU7, attributing this projection to the high costs associated with premium suppliers and components. 

He estimated the gross profit margin to range between 5% and 10%, underscoring the company’s commitment to offering competitive pricing while maintaining profitability.

Xiaomi remains committed to investing in its automotive unit and other emerging ventures, earmarking significant funds for expansion. Lei Jun revealed plans to invest an additional 11-12 billion yuan in 2024, allocating resources to bolster the automotive business and enhance its mobile operating system, among other endeavors.

Ambitious Goals for Global Automotive Leadership:

Looking ahead, Lei Jun articulated Xiaomi’s ambitious vision of becoming one of the top five automakers globally within the next 15-20 years. 

This aspirational goal underscores Xiaomi’s determination to establish itself as a key player in the automotive industry, leveraging its technological expertise and market insights to drive innovation and change on a global scale.