China’s Superexpensive EV

Apple gave up on the EV market. China’s smartphone company Xiaomi, a huge Apple rival in the world’s largest smartphone market, has decided it can take a significant market share in the world’s largest car market. It will be up against over a dozen rivals, including Tesla and the world’s largest EV company, BYD.

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Xiaomi’s plans are unusually ambitious production. Its management claims its new car will also have autonomous driving features, which many experts believe will be the subsequent major development in the auto industry and perhaps the one that will change the market more than EVs. 

Xiaomi’s first vehicle will be branded as the SU7. The risk the company takes is that the price of the car will be almost $70,000. Climatecrisis247 is skeptical that Xiaomi can do well either inside or outside China. The trend among large manufacturers is toward inexpensive EVs. This is particularly true in the US, where prices have been a barrier to EV adoption, and companies like Ford and Tesla are working to drop prices to restart slowing consumer demand.  

Xiaomi appears to be in the process of attacking the highest end of the car market. That means well-entrenched brands such as BMW, Mercedes, Audi, Porsche, Japan’s Lexus, and South Korea’s Genesis. Based on the brand equity of these and the balance sheets of their parents, it is a huge risk of capital.