Xiaomi plans to start making and selling a sport utility vehicle (SUV) similar to Tesla’s Model Y by 2025. They are expanding their electric vehicle (EV) business, with production of their first electric car, the SU7, set to reach 100,000 units this year.
Xiaomi is almost at full initial capacity and is working to increase production to meet demand. They compared their SUV to Tesla’s during development. This SUV is part of Xiaomi’s $10 billion EV project, led by co-founder Lei Jun. Xiaomi wants to rely less on the smartphone market, which is dominated by Apple. But entering the EV market means competing with big names like Tesla and BYD Co.
We don’t know the details about Xiaomi’s SUV yet, like its specifications and price. SUVs are popular in China, so Xiaomi’s plans could change based on production progress. Xiaomi hasn’t commented on this yet.
Discussions about making an SUV started in 2021 when Lei announced Xiaomi’s EV venture. But Xiaomi decided to start with the SU7 sedan, which costs over $30,000. They aim to start mass-producing the SUV by late 2025, after completing the second phase of their factory in Beijing. Right now, they’re focused on making the SU7 because they can only deliver fewer than 10,000 cars a month.
Xiaomi wants to diversify because smartphone sales are slow. However the Chinese EV market is competitive. Tesla and BYD lead, but many companies want a piece of it. Apple dropped its EV project because of manufacturing challenges.
Xiaomi’s SU7 series got nearly 90,000 orders by April, a month after its launch. Xiaomi’s stock has gone up about 30% since then. Their EV business might break even by 2026, earlier than expected, because of good sales and improved production capacity. Analysts predict Xiaomi will ship 240,000 units in 2025. They think production will ease in the third quarter of 2024.
