May 30, 2024

Foreign automakers are expected to face even more competition in China from domestic car companies, as Xiaomi reportedly has plans for an electric SUV to rival Tesla.

The Chinese smartphone maker made a big wave in March when it launched its first car, the SU7, an electric sedan that quickly racked up almost 90,000 pre-orders. As of April 30, just a little over a month after the SU7 was officially introduced, Xiaomi says it has made 10,000 units — and delivered 7,058.

Part of the SU7’s popularity comes from Xiaomi’s move to loudly and proudly compare it to Tesla’s Model 3 sedan.

“Tesla is a role model for all EVs in the world, so let’s do a comparison between us,” Xiaomi CEO Lei Jun said at the March 28 launch event for the SU7, before showing the crowd a chart comparing the Model 3 and SU7. He said the SU7 beat Tesla in all but two respects, including price.

And now, Bloomberg News reports, Xiaomi wants a follow-up.

The company aims to build on the SU7’s success with an electric sports utility vehicle similar to Tesla’s best-selling Model Y. Xiaomi has benchmarked its planned SUV against the Model Y, according to Bloomberg. The SUV, however, won’t enter mass production until late 2025, after Xiaomi expands the capacity of its Beijing facility to match demand.

Xiaomi aims to become a top global carmaker in 15 to 20 years, Lei said last December. The company has pledged to invest $10 billion to produce cars over a decade, and last year it became one of the few new players in China’s EV market to win government approval.

However, despite the SU7’s success, it isn’t easy to survive in the world’s largest auto market — and it’s even tougher to thrive in it. There are more than 120 players in China’s crowded EV industry and many of them have vehicles to match Tesla’s.

China’s top EV maker, BYD, sold more than 330,000 new energy vehicles last month due to its large portfolio of varied and technology-heavy cars. The automaker sells everything from a $230,000 supercar to a $12,000 hatchback.

BYD last week applied for Bejing’s approval to unveil a smaller version of its Seal sports sedan, as the automaker continues to develop and offer more options. The company’s massive success draws mostly from its cheaper cars, which has led some to label it a “Tesla killer.”

Chery last week unveiled its first midsize electric crossover, the Sterra ET, which it says can compete with the Model Y and Audi’s 5Ql. And Li Auto has priced its five-seater Li L6 midsize SUV at least 5% cheaper than the Model Y.

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