Never stop because after having done so much to reach the top, losing altitude is a snap. This must be one of the principles that drives Xiaomi, a company that is clearly growing in size and ambition. This is demonstrated by the numbers it is racking up in the smartphone sector, but even more so by the willingness to invest huge resources to expand an already very strong ecosystem and broaden the company’s horizons. The best example of this is the arrival on the market of the SU7, the first electric car that the Beijing-based company has built in a few years.
After investing over $10 billion in the development and production of the vehicle over the course of a decade, Xiaomi took less than three years to build its first electric car, suggesting that this is just the beginning. ‘We will work hard over the next 15-20 years because we want to become one of the top five car companies in the world, with the aim of boosting the Chinese car industry as a whole’. Lei Jun, founder and chairman of Xiaomi, doesn’t talk much, but when he does, he leaves his mark.
Few believed in him when Xiaomi made its appearance in 2010 in a country already full of mobile phone brands, and even fewer believed in the strength of his company when he first talked about wanting to build a car in a big way to compete with Tesla and Porsche.
The strength of an unrivalled system
If words are carried away by the wind, facts remain and make history. That’s why Jun and Xiaomi have become a combination to pay attention to when they set their minds to a challenge. No one can predict how the automotive industry will evolve over the next two decades, but if there’s anyone who has what it takes to emerge in the sector, it’s Xiaomi.
There are several good reasons for this, starting with China. It is still a strongly state-controlled country, where everything is decided by the government. However, it is also the country with the largest market in the world, as well as a country with infinite resources where the government itself can determine the rise and success of a company. Xiaomi has been able to accelerate plans for the commercial launch of the SU7 because they are produced by the state-owned automotive company BAIC Group, which has an annual capacity of 200,000 vehicles. The batteries are supplied by BYD, the leading Chinese manufacturer of electric vehicles, and CATL, another giant in the sector and the world’s largest producer of batteries for electric cars, with a global market share of almost 40%.
The ability to work as a team according to the dictates of the State, combined with the availability of labour that is unrivalled in the world, make China unbeatable in the production and development of any product. It is no coincidence that all brands, technological or otherwise, have relocated almost all their production to the country of the Dragon. No one can think of undermining a stronghold of such dimensions.
Xiaomi and its automotive partners
Although predictable, the timing of Lei Jun’s announcement about the integration of Xiaomi auto products into other companies’ vehicles is surprising. It won’t be long before we see technologies from the Beijing company inside models from competing brands, thanks to the agreement signed by Xiaomi with several manufacturers. ‘Resource sharing‘ is Jun’s watchword, and by riding the Human x Car x Home ecosystem, he is finding a way to expand a system that already has over 860 million connected devices. Of course, despite producing a large number of different products, Xiaomi has made a name for itself on the international scene thanks to its smartphones.
However, the arrival of their first car could change the future of the company, as Jun seems to perceive from his words. Betting everything or almost everything on the car market is complex, but the transition phase between the old endothermic world and the new electric world is the best period to disrupt tradition and drive the locomotive of change. The example of Tesla is there to prove it.
Furthermore, if we compare smartphones and cars, it’s true that the investment for production is very different because car development requires a lot of money, but it’s also true that the profit margins between the two markets are incomparable.
After having quickly emerged as a valid alternative to the Apple-Samsung duopoly in the smartphone sector – in 2024, the Chinese company was the fastest-growing manufacturer among the top 5, with a 16% increase in worldwide shipments compared to the previous year – I wouldn’t be too surprised to see Xiaomi in the top 5 car manufacturers over the next 10-15 years.
In a rapidly changing sector, those who find the right levers to win over consumers are destined to conquer a position of strength. Considering the surprising start with the SU7, which sold 215,000 units in one year, the prospects look very bright, also because, in July, the second Xiaomi car will make its debut: the YU7 SUV, a direct rival of the Tesla Model Y.
