(Repost) Bloomberg -- Xiaomi Unveils Its First EV, With Ambition to Be China’s Porsche or Tesla

(Credit: Transcript by OpenAI Whisper)

Xiaomi launches its first EV, with ambition to be China's Porsche or Tesla. The billionaire co-founder of Xiaomi Corporation unveiled the company's first electric vehicle Thursday, declaring ambitions to become a top global car maker in 15 to 20 years and compete against Tesla Inc. and Porsche AG. The SU7, which stands for Speed Ultra, will be powered by batteries from Chinese market leaders Contemporary Amperex Technology Company Limited and BYD Company, depending on whether it has a single or dual motor configuration. Xiaomi's EV foray is a $10 billion wager by CEO and co-founder Lei Jun that his company can shake up the transport sector much as it did smartphones a decade ago. Lei, also a prolific venture investor, has called it his final entrepreneurial bet. But in the time since first announcing his EV plans in 2021, the regulatory landscape and competition in China, the world's biggest car market, have changed significantly. Beijing has been limiting manufacturing permits to new market entrants, which means Xiaomi has to partner with state-owned Beijing Automotive Group Company to produce its EVs. State subsidies that reimbursed consumers with as much as 60,000 yuan, $8,440, for an EV purchase ended in 2022. The SU7 is also vying for attention in a market that has hundreds of models from dozens of brands. Xiaomi's goal is to make a dream car that is as good as Porsche and Tesla, Lei said Thursday at the launch event, attended by thousands of people at the China National Convention Center. Lei has previously said Xiaomi intends the SU7 to rival Porsche's Taycan Turbo in terms of performance and Tesla's Model S in technology features. The Model S starts at 698,900 yuan and the Taycan at 898,000 yuan, which is much higher than the medium price bracket of 200,000 yuan to 300,000 yuan that many expect the SU7 to fall into. Xiaomi hasn't yet said how much the SU7 will cost. Tesla has sold fewer than 200 Model S cars in China since revamping the model this year, while Porsche has delivered about 3,600 Taycan family EVs in the country in 2023, according to the China Automotive Technology and Research Center. The SU7 is due to go on sale next year and will come with a motor that has 21,000 revolutions a minute, which Lei said is higher than the Model S and Taycan Turbo. Xiaomi's factory uses gigacasting manufacturing pioneered by Tesla, developing a 9,100-ton machine that it calls hypercasting. Sent via Twitter web app. View original tweet. Xiaomi, once known as a producer of cheap smartphones, has been fighting to sustain growth in an increasingly saturated and plateauing global market. Before the September quarter, the company had posted a sales decline in every three-month period since 2021. Now, it is seeking to challenge not just other EV makers but also newer entrants like Huawei Technologies Company in an arena where it has demonstrated little unique expertise. Lei said he had driven 150 different cars since committing to making the SU7. Xiaomi shares gave up earlier gains to fall 0.5% Thursday afternoon. They rose 4.1% Wednesday. Lei, who has dubbed the SU7 a performance beast on X, has signaled Xiaomi won't resort to undercutting competitors to get his vehicle off the ground. He has also paid tribute to competitors on social media, including BYD, Speng Inc., Li Auto Inc. and Huawei, calling them pioneers of China's new energy vehicle industry. In a Wednesday post on social media platform Weibo, Speng CEO He Xiaopeng said he welcomed Xiaomi joining the automaking family and wished the company great sales for 2024. Japan to make third attempt at launch.

Key Takeaways from the Article:

1. Xiaomi's EV Launch: Xiaomi Corporation has entered the electric vehicle (EV) market with the unveiling of their first EV, the SU7, representing a significant shift for the company known primarily for smartphones.

2. Ambitious Goals: The co-founder of Xiaomi, Lei Jun, aims to position the company as a top global car maker within 15 to 20 years, targeting competition with major brands like Tesla Inc. and Porsche AG.

3. Vehicle Specifications: The SU7 (Speed Ultra) is set to feature batteries from leading Chinese manufacturers, Contemporary Amperex Technology Company Limited and BYD Company, with variations based on single or dual motor configurations.

4. Significant Investment: The move into EVs is backed by a $10 billion investment, highlighting Lei Jun's commitment to this new venture, which he refers to as his final entrepreneurial bet.

5. Regulatory and Market Challenges: Since the initial announcement of the EV plans in 2021, Xiaomi has faced a shifting regulatory landscape and increased competition in China's vast car market. Notably, state subsidies for EV purchases have ceased, and Xiaomi must collaborate with Beijing Automotive Group Company for manufacturing due to new market entry limitations.

6. High Aspirations for SU7: Lei Jun expressed intentions for the SU7 to match or surpass the performance of Porsche's Taycan Turbo and the technological features of Tesla's Model S, despite the expected lower price bracket of the SU7.

7. Market Positioning and Sales Goals: Xiaomi's EV faces the challenge of standing out in a crowded market with hundreds of models from various brands. The company has yet to announce the SU7's pricing.

8. Technological Innovations: The SU7 will boast a high-revolution motor and will utilize gigacasting manufacturing technology. Xiaomi is developing its version of this technology, termed hypercasting.

9. Growth and Competition Strategy: Xiaomi, evolving from its image as a budget smartphone maker, is now aiming to establish a foothold in the competitive EV market, challenging not only established automakers but also new entrants like Huawei Technologies Company.

10. Acknowledgement of Competitors: Lei Jun has recognized the contributions of other companies in China's new energy vehicle industry and has indicated that Xiaomi will not engage in undercutting competitors' prices to gain market share.

11. Community Reception: The EV industry, including competitors like Speng Inc., has welcomed Xiaomi's entry into the automotive sector, with Speng's CEO expressing support on social media.