Xiaomi’s Swift Entry into the EV Market: A Contrast to Apple’s Struggle
After a decade of effort and billions of dollars spent, Apple abandoned its ambition to produce an electric car. Meanwhile, in China, electronics giant Xiaomi launched its first electric vehicle, the SU7, after just three years of development, delivering 135,000 vehicles in its first year.
Xiaomi’s success story underscores the remarkable dominance China has achieved over the electric vehicle supply chain. Chinese companies have not only mastered EV manufacturing, but they’ve also created a robust infrastructure that allows nimble companies like Xiaomi to quickly and affordably source components. This advantage allowed Xiaomi to bring the SU7 to market in record time.
Attendees check out the SU7, the first car from the electronics maker Xiaomi, at the Beijing Auto Show on April 25, 2024. — 2025 The New York Times Company
The company has ambitious plans to double its sales in 2025.
China’s EV Ecosystem: A Competitive Landscape
Xiaomi isn’t alone in this endeavor. Other Chinese companies, including Leapmotor, Li Auto, and Seres Group, are starting to achieve profitability after investing heavily in the world’s largest automotive market. Moreover, the telecommunications firm Huawei is developing autonomous driving software, partnering with Chinese automakers such as Seres Group, SAIC Motor, BAIC, and Chery.
Xiaomi’s Strategy: Imitation and Innovation
Xiaomi has often drawn comparisons to Apple. Mirroring tactics of the Cupertino giant, Xiaomi has capitalized on consumer electronics trends by selling its low-cost, high-design products online.
A display of design features from the SU7, the first car from the electronics maker Xiaomi, at the Beijing Auto Show on April 25, 2024. — 2025 The New York Times Company
Lei Jun, Xiaomi’s CEO, famously adopted a style reminiscent of Steve Jobs at the launch of Xiaomi’s first phone in 2011. The introduction of the SU7, a four-door sedan with artificial intelligence features, marks its entry into the automotive market. The SU7 boasts features such as automated parking, in-car entertainment for passengers, and compatibility with Xiaomi’s home automation system. Lei Jun compared the SU7 to a Porsche, but at a significantly lower price of $30,000.
Leveraging a Connected Ecosystem
Xiaomi’s success is built on a broad electronics product line, including robot vacuum cleaners and air conditioners, all connected through a central operating system and managed via a mobile app. The SU7 seamlessly integrates into this ecosystem. The car can utilize data gathered from other devices to personalize the driving experience, for example, determining the best time to charge the battery. As Gary Ng, an economist with Natixis Corporate & Investment Banking, observed, “Xiaomi has really started infiltrating your home. Everything is linked together, and this is something other companies couldn’t do.”
Disrupting the Premium Market
While the SU7’s sales represent a small portion of the Chinese EV market, it positions Xiaomi to challenge the dominance of foreign automakers in the premium car segment. Porsche, for example, experienced a 30% decrease in deliveries in China in the year following the SU7’s launch.
Xiaomi recently unveiled a high-end version of the SU7, named the SU7 Ultra, alongside a premium smartphone model. Xiaomi also staged a publicity stunt by racing an SU7 prototype around Germany’s Nürburgring racetrack, claiming a record for the “fastest four-door sedan.” The company further plans to release a sport utility vehicle, the YU7, later this year.
Government Support and Supply Chain Strength
Chinese EV companies benefit from substantial government backing, which has allowed them to control vital aspects of the supply chain, including critical raw materials like those found in batteries. This early advantage has enabled BYD and Contemporary Amperex Technology Co (CATL) to become the world’s largest electric battery makers. Xiaomi utilizes batteries from both BYD and CATL in its vehicles and was able to quickly establish production by acquiring a factory from Beijing Auto Group.
Speed and Consumer Understanding
This vertically integrated approach to manufacturing allows Chinese EV companies to drastically reduce the time required to get new models from development to market compared to traditional automakers. Stephen Dyer of AlixPartners emphasized that, allowing them to focus on continually updating their products with new software capabilities. Moreover, Xiaomi’s experience as a consumer electronics brand grants the company unparalleled insight into Chinese consumer preferences. Tu Le, a managing director at Sino Auto Insights, noted that Xiaomi’s brand recognition plays a critical role in this industry, allowing it to sell cars globally.
