Xiaomi's Tesla Model Y rival could be in the works

Chinese smartphone maker Xiaomi plans to commence the production and sales of its Tesla Model Y rival electric SUV (EV), as early as next year. The recently introduced SU7 electric sedan has been successful, receiving close to 90,000 confirmed orders as of the end of April, while its production is set to reach approximately 1,00,000 units this year. Approaching full initial capacity, Xiaomi is working to ramp up output to meet growing demand.

With the brand is set for a major expansion,  it would position itself in stiff competition not only with Tesla but also other homegrown carmakers, such as BYD, Nio, and Xpeng. While Xiaomi enters the competitive Chinese EV market, which is the world's largest, it also faces challenges, such as compressed margins amid a price war led by Tesla and BYD during a period of slowing growth.

For Xiaomi, the SUV serves as a significant expansion of its $10 billion EV endeavour, initiated by billionaire co-founder Lei Jun. This move is part of the company's intentions to reduce its reliance on the smartphone market, which is dominated globally by tech giants, such as Apple Inc. In fact, Apple was also intending to foray into automotive space, but Apple had recently abandoned its own EV project.

Analysts from HSBC Qianhai Securities projects Xiaomi's EV business to break even by 2026, two years ahead of previous estimates, driven by improving capacity and positive market reception for premium models. They expect Xiaomi to more than double shipments to 2,40,000 units in 2025, with the capacity bottleneck expected to ease in the third quarter of 2024.

In December 2023, Xiaomi showcased the SU7. It offers two variants: a dual-motor all-wheel-drive SU7 Max and single-motor rear-wheel-drive SU7. This SU7 entry-level model includes a 73.6kWh battery pack, while the range-topping model boasts a larger 101kWh unit. The brand has created its own CTB (Cell-to-Body) technology, integrating the battery into the car to not only stiffen the structure but also allow roomier cabin.

The SU7 has a claimed range of up to 800km. Whereas, the power output is rated as 300PS for the base variant and 650PS for the top-spec model. The maximum torque output is 635Nm. The top speed is rated at 210kmph and 265kmph, respectively.

With inputs from The Economic Times/Bloomberg

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