Hong Kong: China’s Xiaomi may have initially drawn inspiration from Apple, but it now finds itself forging its own path ahead of the American tech giant. The $48 billion handset-maker recently announced plans to launch its first electric car, just weeks after Apple abandoned its decade-long electric car project. Despite timing challenges, Xiaomi’s strength in software positions it for success.
Xiaomi, the Chinese smartphone manufacturer, made a significant announcement on Tuesday, revealing plans to officially debut its highly anticipated electric car, the SU7, on March 28th. In a social media update, the company assured potential customers that the SU7 electric car would be available for delivery immediately upon its launch. Furthermore, Xiaomi announced the opening of waitlists for interested buyers across 59 stores located in 29 cities throughout China.
Xiaomi entered the electric vehicle arena three years ago, unveiling a $10 billion investment plan spanning a decade. Collaborating with state-backed manufacturer BAIC and assembling a team of 4,400 engineers, Xiaomi made significant strides. The company’s efforts bore fruit as it unveiled plans to release its inaugural model, the SU7 sedan, this month, sparking an 11% surge in its shares.
While specific financial details remain scant, Xiaomi previously highlighted impressive technical specifications, including acceleration speeds rivaling Tesla and Porsche models. However, the electric vehicle market faces challenges, with annual demand growth slowing compared to previous years, posing a potential threat to Xiaomi’s profitability.
Nevertheless, Xiaomi stands out with its new operating system connecting smartphones, cars, and other gadgets. The SU7 model seamlessly integrates with over 1000 Xiaomi devices, catering to China’s premium segment, where internet-connected features are highly valued.
Financially, Xiaomi enjoys a robust position, projecting substantial operating cash generation and boasting over $1 billion in net cash. This contrasts with competitors like Nio, expected to report significant losses this year.
CEO Lei Jun’s venture into electric vehicles may encounter hurdles, but Xiaomi’s innovative approach and financial stability suggest a promising journey ahead.
