China’s new EV market may be one of the most volatile places in the world. To the untrained eye, it doesn’t matter what kind of electric vehicle a car manufacturer makes; there’s a good chance they’ll buy it in China. However, over time, we’ve learned that a vehicle’s lifestyle alone doesn’t guarantee its success. Just ask corporations like Honda, Ford, General Motors, or Hyundai, whose electric products have led average or even underwhelmed in a market they once held firm.
Chinese EV brands aren’t immune to this intense competition either. XPeng and Human Horizons (HiPhi) are two brands that have recently struggled despite having reasonable and well-priced cars at home and abroad.
China’s vehicle market is a driving force
In 2023, the Shanghai Motor Show, China’s first major trade event since COVID lockdowns, revealed the country’s leadership in electric vehicles, software, and connected vehicles. Now, all automakers are struggling to catch up as they lose sales in China, and while the U. S. , Europe and other countries are going to restrict Chinese imports of electric vehicles, they say that would destroy their local auto industry.
But when Xiaomi, the powerhouse of smartphones and connected devices, announced its SU7 electric sedan, it overlooked the turbulent upheavals in the Chinese market.
It wasn’t like the Li Auto Mega, which liked a sure win, but struggled to move a few hundred games a month. Instead, a few hours after the official unveiling of the SU7, Xiaomi claims to have garnered 88,898 orders shown. How?
From what I observed in Beijing while covering the country’s largest auto show, there’s a lot more going on here than just a counterfeit product. The brand, its product, and CEO Lei Jun have combined in a way that I don’t think Western brands have noticed since before Elon Musk fell.
And if the Xiaomi SU7 is the Chinese Apple Car – an electric vehicle hyper-connected to all the gadgets in its software ecosystem – then Jun fulfills his vocation as a Chinese Steve Jobs more than ever. But unlike Apple, Xiaomi has advertised it.
Outside of the automotive industry, Xiaomi and its competitor Huawei have noticed great progress. They have gobbled up a large chunk of the smartphone market, adding high-end flagship models to compete with high-end phones like the iPhone 15 Pro.
Even Apple, which once had about 20% of the smartphone market, is starting to lose ground to those two brands. Today, Xiaomi controls 14. 7% of the Chinese cell phone market, while Apple’s market share there has fallen to 15. 7% in a year. Imagine what those two can do when they turn to electric vehicles.
How could such a thing happen? To understand this, I interviewed high-level Chinese analysts, such as journalist and podcast host China EVs.
“[Huawei and Xiaomi] have founders who are enjoyed through the Chinese, [including] Xiaomi’s Lei Jun, with his unique humor and entrepreneurial spirit who makes simple electronics for the general public,” he said in an email. that “Huawei’s founder, Ren Zhengfei, has a great reputation in the country as a businessman. ”
But I sensed Lei Jun’s star strength until I physically went to China.
My original plan was to get as many cars as possible in the Chinese market, with the Xiaomi SU7 being a precedent at the most sensible point on my agenda. And yet, it proved unimaginable. Even on press days, Xiaomi’s booth was flooded with people, queuing for at least two and a half hours behind a velvet rope. I needed more time than that if I hoped to get an impression of the cars in operation, even if there was a hellish possibility that I would one day get behind the wheel of one of them on Chinese public roads.
My stay in China extended beyond a brief press conference, so I thought I’d come back a few days later, when the exhibit opened to the public, for a more intimate look at the vehicles. In reality, the fervor of the average Pekingese would have diminished. I’ve got an idea. China is a quiet country; I imagine other people would actually move on at some point, right?
No.
The queues worsened exponentially when the exhibition opened to the public 3 days later, when photographs and videos of the swarms of people surrounding Xiaomi’s booth went viral on Chinese social media sites such as Weibo or Xiaohongshu.
But after translating messages and screenshots through WeChat’s translation software and seeking to sense the power of the crowd, I learned that it wasn’t just those damn cars that made other people so geeky.
It’s Lei Jun himself and all the star force of the Xiaomi brand.
Whenever Jun appeared at the Beijing Auto Show, he was surrounded by Chinese media and guests, workers from other automakers, who were stunned by Jun’s presence. The CEO radiated a sense of approachability and friendliness. Of course, much of this is likely the result of a well-orchestrated team of symbols and PR consultants. Either way, it works great.
That’s one of the reasons why Xiaomi’s booth was so crowded in the first public days of the Beijing Auto Show. While most high-profile CEOs and entrepreneurs wouldn’t have bothered to show up in Beijing, especially not on public days, Jun was there to announce his plans. thanking their fans and handing out autographed merchandise in a showroom that filled the booths of Ji. Yue, Buick, Geely and Changan Mazda located next to Xiaomi. In other words, it’s a big deal.
Jun, now 54, began his career in 1992 at a Chinese software company called Kingsoft. Kingsoft went public in 2007 and Jun left soon after to launch Xiaomi in 2010. In 2011, the Generation Company introduced its first phone. In 2014, its price was estimated at $46 billion.
Perhaps Xiaomi was simply in the right position at the right time, bringing a counterfeit product to an incredibly hungry market. Feature-rich, moderately priced Xiaomi phones have been a hit in China, once again, there’s more to it than it offers. Be careful here. When Xiaomi was first established, it moved away from the classic concept of a brick-and-mortar store and eschewed classic advertising by relying on a social media-based strategy.
The company actively talked to its visitors, adding them in a way that seemed approachable and as if it was actively listening to its users. This kind of interaction is how Xiaomi has turned its users or visitors into fans; Tesla was the same playbook long before Musk owned what was once Twitter. I mean, just check the comment sections of any Xiaomi post on any social media site. It’s probably full of Xiaomi enthusiasts (called Mi Fans) who are excited about what the logo offerings.
That’s the star force Xiaomi has here, unlike other automakers; all of which provides insight into the iMac and the beginning of Apple’s iPhone era, when Steve Jobs ruled much of the fandom.
There is a genuine feeling of camaraderie related to Jun’s presence. His public appearances have focused on building relationships with Chinese consumers and facets of the Chinese generation and auto industry. Chinese social media has been flooded with news about Jun’s meetings with auto CEOs, such as Nio and Great Wall Motors.
Even Jun’s comments about the industry seem oddly positive and unusually kind, such as encouraging SU7 reservation holders who can’t wait to buy competing models from XPeng, Chery, and Geely.
Take as an example the way Jun stated that he ordered a Li Auto L6, technically a competing company, or any number of similar tricks Jun has pulled off for Xiaomi’s egalitarian line of electronics and smartphones for customers.
All of this is attractive to the Chinese and, more importantly, shows a strength that is not easily replicated in many companies, Chinese or not. The last time we saw someone so charismatic in the auto industry was probably before COVID-19. Musk, when his ability to turn Tesla into a global electric titan still overshadowed his many other controversies, and thought that, through many, he was a genuine. . . the life of Tony Stark or just a cool guy who launched rockets and came out with rock. Star.
Jun has that kind of star force in China and it’s part of Xiaomi’s appeal. It can also be seen in stores. I bought a Didi from Xiaomi’s flagship store in Beijing Oriental Plaza; Even on a rainy, sleepy Sunday morning, the store was filled with other people checking Xiaomi phones and one of the store’s five SU7 sedans.
I was glad that I was able, in spite of everything, to see the car with my own eyes. The SU7 is a sleek-looking sedan, but I’d be remiss if I didn’t mention the elephant in the room: yes, it’s obviously recommended. via the Porsche Taycan.
The car’s low roofline, windows, and profile are all resolved, and even the false front brake outlets on the front fenders obviously stand out on the Taycan and Panamera.
Still, the more I looked at the SU7, the less it looked like a Porsche. The SU7, while still attractive, didn’t have bigger hips than the Taycan or Panamera. The SU7’s roofline is svelte, if perhaps a little less elegant than the Porsche’s.
The look of the car’s cladding was simpler, while its front and rear fasciae were pleasantly generic. It reminds me of how much the Chevrolet Corvette C8 would almost resemble a Ferrari 458 if sold through Aldi.
The interior of the SU7 was the car’s trump card. While the Panamera and Taycan are primarily focused on being driver-only cars, where passenger space is a secondary concern, it turns out that Xiaomi’s designers have focused on what would be important to Chinese consumers: the interior. The headroom of the SU7 doesn’t seem excessively compromised despite the low roofline.
The rear seat offers generous legroom and Xiaomi’s designers have avoided the feeling of contact with the ground of a cushion awkwardly fixed close to the upper floor meant to accommodate a giant battery. The front seats were just as comfortable and supportive.
I hadn’t spent time with Xiaomi phones either. While waiting for the opportune moment to sit among the dozens of Chinese consumers asking Xiaomi staff questions or posing for photos, I played around with some of their next-level phones, such as the Xiaomi 14 Ultra. The build is quality, but if you own one of the more expensive iPhones, you probably won’t be too impressed.
This philosophy applies to Xiaomi’s cars. All the buttons, switches, and fabrics are on par with those on those phones. Solid, but it’s not meant to challenge any luxury car, not even a Porsche.
That’s not the case either, with a base value of around $32,000, which is slightly a third of the value of any Porsche, regardless of rear-wheel drive type. I would say it is similar to the Tesla Model Y or Model 3.
Perhaps the SU7’s interior is a little more special than Tesla’s. From a design perspective, the Xiaomi car has a minimalist dual-screen design; a single infotainment screen in the middle and a small driver’s display in front of the steering wheel. Interestingly, Xiaomi has shown restraint here when it comes to charging the car full of screens like most electric cars in the Chinese market, it just has an undeniable one.
But the display itself is very customizable. Xiaomi outlets look a lot like Apple stores, filled with accessories that can (and are) purchased at the point of sale to make the end result even more special. In one aspect of Xiaomi’s store there was a lot of add-ons that can only need to be purchased and installed through the user. A set of piano buttons for loading on the SU7’s touchscreen interface. Or a fragrance dispenser. Or a set of LED lights. Or a phone holder that screws into one of the two ports on either side of the dashboard. Or one or two shelves for backseat entertainment.
All of this works perfectly with Xiaomi phones and its exclusive operating system, purchased in a position where other people were already buying their phones and other tech gadgets.
It looks like anything we don’t have here. In the same way that Apple has created a diversity of electronic devices that trap (or constrict) its users in a closed system, Xiaomi is about to do the same, but with a car. instead.
Work? Maybe. In fact, Jun has a savvy track record, taking Xiaomi from a small start-up in 2010 to $12 billion in profits by the end of 2014. This is partly due to Jun’s decision to expand into India and Malaysia, where its price is still good. The equipped mid-range is a well-equipped mid-range. High-end phones have been a quick hit among the developing middle classes.
This is another explanation for why publications continue to call Jun the “Steve Jobs of China”; Smart business decisions have allowed Xiaomi to conquer a market that in the past had not been exploited, and Jun’s popularity is due to this.
As for the SU7, it’s getting positive reviews in China and the symptoms look promising. Xiaomi has already adjusted its production targets upwards, from an initial 100,000 to 120,000. Likewise, other brands have tried to imitate (or perhaps reject) Xiaomi’s ideas.
Both Polestar and Nio now offer high-end smartphones for sale in China. Huawei, Xiaomi’s biggest competitor, has the HIMA alliance, which has added two more automakers that need to use Huawei’s operating formula or hardware answers for in-car connection technology. .
The SU7 is like the rest of everything I’ve learned in China: there are more points at stake here than just geopolitics, or (justified) considerations about hard work and human rights or the Chinese government’s supposed synthetic stimulation of its electric cars and technology industries.
More than all this, it is evident that Chinese corporations are thinking of tactics to combine their generation with their automotive industry, charismatic and forward-thinking CEOs, and savvy marketing methods that suit the customer wherever they are. Possibly we wouldn’t have forgotten it, or perhaps more accurately, we haven’t forgotten it.
Meanwhile, our automotive industry still relies on complex networks of parts suppliers who are not accustomed to this point of software-driven cars and feel hampered by executives and dealers who don’t need to deal with this transition at all.
The $578 billion question is: Can we adapt to what companies like Xiaomi are doing?Could our car brands retaliate at this level, even if they wanted to?
I don’t know.
Contact the author: kevin. williams@insideevs. com
Top illustration: Ralph Hermens for InsideEVs
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