Tesla has a problem in China. The first one is called BYD, one of the largest EV manufacturers in the world, but it is joined by a completely unexpected rival: Xiaomi, the great consumer technology manufacturer of the last decade.
Xiaomi, a company better known for its smartphones and other gadgets than for its cars, presented its first electric vehicle for the Chinese market last year. But the price of the new SU7 was not announced until its official presentation on Thursday, and it is lower than many expected.
Lei Jun, CEO of Xiaomi, said that the standard version of the SU7 will be sold for $30,000 (215,900 yuan), although as CNBC pointed out, this means that each vehicle will be sold at a loss.
The price is remarkable because it is considerably lower than Tesla’s Model 3, which starts at $34,000 (245,900 yuan) in China.
Xiaomi wants to beat Tesla on its own turf
Lei dared to claim that the standard version of the SU7 surpasses Tesla’s Model 3 in more than 90% of its specifications, and added that the new car offers a minimum driving range of 700 kilometers, which is about 93 kilometers more than the Model 3.
The first EVs from Tesla’s only factory in China rolled off the production line in 2019. More recently, it has been cutting the price of its cars to better compete with Guangdong-based BYD and other EV manufacturers in the lucrative Chinese market.
BYD sold a record-breaking 526,000 battery-powered vehicles worldwide in the last quarter of last year, overtaking Tesla for the first time in a single quarter. But for the whole of 2023, Tesla is in the lead.
Tesla’s management team will be closely monitoring the Chinese market with even more interest in the coming months, especially because the first sales figures suggest that there is a great interest in the SU7 after Xiaomi reported on Thursday more than 50,000 orders in its first 27 minutes of availability. Deliveries will begin next month.
Xiaomi plans to invest $10 billion in the automotive sector over the next decade, and the company has stated that it could enter the global market in the next two years. It also aims to become one of the top five car manufacturers in the world in the next 15 to 20 years.
