How will Xiaomi’s entry into the EV sector influence the industry?

Xiaomi, a Chinese tech giant’s bold move into the electric vehicle (EV) market has sparked various conversations about its potential impact on the sector.

Despite a drop in the sales of EVs, is now the time for Xiaomi to enter the game? How will it impact the market?

The facts

Xiaomi’s entry into the EV arena has garnered remarkable attention which is evident from the overwhelming response in pre-orders. Within just 24 hours of opening orders, Xiaomi reported a staggering 88,898 pre-orders, signaling a strong demand for its SU7.

This, reports say, has resulted in a lengthy waiting time before customers become owners of the much-anticipated car. Eager buyers are to wait up to six months for their new vehicles.

The arguments

Xiaomi’s decision to enter the EV market is more than just a risky move. Experts argue that in the field of consumer electronics, the corporation has a track record of innovation and technological prowess. This, they say is evident in how Xiaomi has continuously shown that it can use cutting-edge technologies to produce goods that appeal to customers, from smartphones to smart home appliances.

This knowledge can be easily applied to the creation of electric vehicles, which could spur market competition and innovation.

Also, as the third-largest smartphone vendor in the world, Xiaomi’s entry into the electric vehicle market is a calculated move in a fierce industry dominated by industry giants like BYD and Tesla. Xiaomi wants to make a big name for itself in the EV industry by taking advantage of China’s booming auto industry.

With a competitive price tag of 299,900 yuan for the Max variant and 215,900 yuan for the basic model, Xiaomi’s SU7 is a serious rival to Tesla’s variant 3. With a minimum range of 700 km, the SU7 outperforms its competitors and is favourably compared to high-end vehicles such as Porsche’s Taycan and Panamera.

Another aspect is that although EV sales have been rising lately, there are indications that growth rates have levelled out, which would point to a drop in consumer enthusiasm. The enduring superiority of electric vehicles is being jeopardised by factors such as fluctuating consumer preferences, unstable fuel prices, and the emergence of rival technologies such as hydrogen fuel cells. Because the COVID-19 epidemic has disrupted supply chains and reduced consumer spending power, it has also had an overall negative impact on the automotive industry.

However, Xiaomi is unwavering in its commitment, even in the face of growing competition and a slowdown in the worldwide EV industry.

As evidence of its steadfast commitment to the long-term development and expansion of the EV industry, Xiaomi has made a commitment to invest $10 billion over the next ten years in its automotive division.

Because of Xiaomi’s stellar reputation for providing high-quality goods at competitive costs, some are of the view that electric vehicles may become more accessible and affordable, growing the market and hastening the adoption of environmentally friendly transportation options.