Chinese smartphone maker Xiaomi unveils first electric vehicle

New model, SU7 will be powered by batteries from Contemporary Amperex Technology and BYD and is due to go on sale next year

Xiaomi founder and CEO Lei Jun at the launch event of the company's first electric vehicle, the SU7, in Beijing. Reuters

The billionaire co-founder of Xiaomi unveiled the company’s first electric vehicle on Thursday, declaring ambitions to become a top global car maker in 15 to 20 years and compete against Tesla and Porsche.

The SU7, which stands for Speed Ultra, will be powered by batteries from Chinese market leaders Contemporary Amperex Technology and BYD, depending on whether it has a single or dual motor configuration.

Xiaomi’s EV foray is a $10 billion wager by chief executive and co-founder Lei Jun that his company can shake up the transport sector much as it did smartphones a decade ago. Mr 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 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,” Mr Lei said on Thursday at the launch event, attended by thousands of people at the China National Convention Center.

Mr 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 has not yet said how much the SU7 will cost.

Tesla has sold fewer than 200 Model S cars in China since revamping it this year, while Porsche has delivered about 3,600 Taycan family EVs in the country in 2023, the China Automotive Technology and Research Center said.

The SU7 is due to go on sale next year and will come with a motor that has 21,000 revolutions a minute, which Mr Lei said is higher than the Model S and Taycan Turbo. Xiaomi’s factory uses gigacasting manufacturing pioneered by Tesla, developing a 9,100-tonne machine that it calls hypercasting.

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 in an arena where it has demonstrated little unique expertise.

Mr Lei said he had driven 150 different cars since committing to making the SU7.

Xiaomi’s shares gave up earlier gains to fall 0.5 per cent on Thursday afternoon. They rose 4.1 per cent on Wednesday.

Mr Lei, who has dubbed the SU7 a “performance beast” on X, has signalled Xiaomi will not resort to undercutting competitors to get his vehicle off the ground.

He has also paid tribute to competitors on social media, including BYD, XPeng, Li Auto and Huawei, calling them pioneers of China’s new energy vehicle industry.

In a Wednesday post on social media platform Weibo, XPeng’s chief executive He Xiaopeng said he welcomed Xiaomi joining the automaking family and wished the company great sales for 2024.