- Xiaomi, renowned for its smartphones, has stepped into the electric vehicle (EV) arena with the launch of its SU7 sedan, marking a potential challenge to Tesla in China. Billionaire CEO Lei Jun suggested that it's time for Tesla Model 3 users to consider upgrading during the SU7's unveiling in Beijing. This move arrives as Tesla faces production cuts at its Shanghai factory amid stiff competition and sluggish growth in the Chinese market, reflected in a 30% drop in its market cap this year.
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Acknowledging the complexities of car manufacturing, Lei highlighted Xiaomi's commitment to the EV space despite challenges. The SU7, touted to surpass the Tesla Model 3 in 90% of specifications, boasts a minimum driving range of 700 kilometers and a sub-$30,000 price tag in China. Although Xiaomi expects initial losses on each vehicle sold, Lei emphasized the company's robust financial position to weather competition over the next five years. While Xiaomi's entry into the EV market signals ambitious growth plans, some caution against potential diversification risks.
Why it matters
Nevertheless, the company has seen strong early demand, with 120,000 firm orders for the SU7 within 36 hours, indicating a promising start despite the competitive landscape.
