“Xiaomi Car’s a Bit Pricy” – How Much So?

China Business News (Reporter Lei Kexin)

The pricing of Xiaomi cars has once again attracted market attention. On March 19th, Xiaomi Group’s President Lu Weibing commented on the pricing issue, saying, “The Xiaomi SU7 may be a bit expensive, but I believe after everyone watches the March 28th launch event, they will approve of this pricing.”

So, just how expensive can the highly anticipated Xiaomi car, the SU7, get?

Xiaomi Car Price

The Xiaomi Group office building. (Image provided by CNSPHOTO)

Xiaomi spent 6.7 billion RMB on car manufacturing in 2023

On March 19th, Xiaomi Group released its financial report for the fourth quarter and full year of 2023. The report revealed that in 2023, Xiaomi Group continued to advance its “people, car, home full ecology” strategy, with a research and development investment of 19.1 billion RMB, a 19.2% year-on-year increase, and a total of 17,800 R&D staff. Throughout 2023, Xiaomi Group’s expenses in innovative businesses, primarily in cars, rose to 6.7 billion RMB, with fourth-quarter expenses amounting to 2.4 billion RMB.

In March 2021, Xiaomi Group’s founder and chairman Lei Jun announced Xiaomi’s foray into car manufacturing, with initial plans to invest 10 billion RMB and 10 billion USD over the next decade. Regarding the price of the Xiaomi car SU7, Lei Jun had previously stated that “it won’t be too cheap.”

During the December 2023 Xiaomi Car Technology Conference, Lei Jun emphasized, “Don’t expect prices like 99,000 RMB; it’s not possible! Any car with such performance and features will be over 400,000 RMB! So, forget about 149,000 RMB; we need to respect the technology!.”

In January of this year, Xiaomi Cars published Lei Jun’s responses to 100 questions from netizens on their official Weibo account. Lei Jun mentioned that Xiaomi Cars “have their reasons for being expensive and are confident that there will be no competitors below 500,000 RMB.”

Recently, Lei Jun once again expressed his views on the prices of Xiaomi cars, saying, “The overall configuration of the Xiaomi SU7 is rich, hence the cost is high. Prices like 99,000 RMB, 149,000 RMB, or even 199,000 RMB that netizens mentioned are, in my opinion, joking. The pricing of Xiaomi SU7 may indeed be a bit expensive.”

At the financial report meeting, Lu Weibing also stated that the pricing of Xiaomi Car’s SU7 is on the higher end. However, he mentioned that after watching the new car launch event, everyone would understand and accept this pricing.

Currently, Xiaomi Cars is confident in the popularity of this new model. According to Lu Weibing, after Lei Jun announced on Weibo for reservations for test drives, the number of reservations increased by nearly 100,000 in just one day, with some individual stores receiving over 10,000 reservations.

Xiaomi Car Model Image

Photo of the right side of the Xiaomi car model BJ7000MBEVR2. (Image source: Ministry of Industry and Information Technology website)

Xiaomi Cars aiming for the high-end market

Regarding the question, “What car is Xiaomi’s first vehicle benchmarking?” Lei Jun had previously said, “The Xiaomi SU7 does not have an exact benchmark vehicle. In terms of driving performance and mechanical qualities, we hope to rival the Porsche Taycan Turbo; in terms of intelligence, we aim to rival the Tesla Model S.”

Lu Weibing stated, “The Xiaomi car SU7 is a C-class high-performance ecological tech sedan with outstanding performance, features, and experience. Xiaomi’s interim goal is to rank in the top three of single-product luxury EVs, but compared to sales volume, Xiaomi places more importance on user experience and word-of-mouth.”

For reference, the pricing of middle to high-end products from new energy car companies like Tesla, NIO, and Xpeng ranges from 200,000 to 500,000 RMB. Specifically, the NIO M7 is priced between 249,800 to 329,800 RMB, NIO M9 is priced between 469,800 to 569,800 RMB; Tesla Model 3 is priced between 245,900 to 285,900 RMB, and Model Y is priced between 258,900 to 363,900 RMB; Xpeng P001 is priced between 269,000 to 329,000 RMB.

In addition to the challenges of car manufacturing itself, Xiaomi Cars also faces pressure from the automotive market’s “price war.”

Following BYD’s slogan of “electricity cheaper than gasoline,” some car companies have begun lowering prices, concentrating the post-discount prices in the range of 100,000 to 200,000 RMB, further intensifying the “price war.”

The pricing of new energy car products continues to hover around 100,000 RMB. For example, the BYD Destroyer 05 Honor Edition has a price range of 79,800 to 128,800 RMB, while the Changan Qiyuan A07 starts at 135,900 RMB. Recently, He Xiaopeng, Chairman and CEO of Xpeng Motors, also mentioned plans to introduce “A-class cars priced between 100,000 to 150,000 RMB,” directly targeting the 100,000 RMB car market.

In this context, Xiaomi Cars, which has yet to announce its prices, has become the focus of industry discussions. Regarding this, Lei Jun stated, “Many friends have been asking recently if Xiaomi Cars can confidently enter the market amidst fierce competition. Of course, we are confident because we are Xiaomi Cars; we are fully prepared.”

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