Xiaomi SU7 Pricing Strategy Unveiled

On March 28, the Xiaomi SU7 will officially hit the market, marking exactly three months since the technical unveiling on December 28.

During these three months, the most discussed topic has been the pricing of the Xiaomi SU7. Even Lei Jun had to step forward to deny consecutively the prices of 99,000 yuan, 149,000 yuan, and 199,000 yuan.

If this trend continues, it basically implies that the price of the Xiaomi SU7 will exceed 200,000 yuan.

However, what Xiaomi might not have anticipated is the wave of price reductions seen in the early 2024 for new energy vehicle models, especially with BYD’s Honor Edition model disrupting the market significantly, forcing competitors to lower their prices. If Xiaomi sticks to its previous pricing strategy, it may not be very appealing price-wise.

According to media reports, Xiaomi has internally confirmed the pricing of the Xiaomi SU7. The standard version is priced starting from 266,000 yuan, while the high-end version starts from 336,000 yuan. Although this price may not be considered low at the moment, it is actually 30,000 to 50,000 yuan lower than the internal pricing from last year.

If the leaked information is accurate, it indicates that Xiaomi initially intended to set the starting price of the Xiaomi SU7 at around 300,000 yuan, with the top configuration approaching 400,000 yuan. Looking back at the media reports after last year’s launch event, it seems that Xiaomi indeed had such considerations internally at that time.

However, ideals must bow down to reality. While Xiaomi aims to position the SU7 as a high-end model, given the overall industry trend of price reductions, Xiaomi has no reason to set high prices. Insiders who leaked this information also revealed that although Lei Jun did intend to price the SU7 above 250,000 yuan, there is a possibility of adjustment before the launch event.

Of course, this is all speculation, and all answers will be revealed on March 28.

In terms of product performance, the Xiaomi SU7 features front double wishbone and rear five-link suspension, extensively utilizes aluminum alloy materials and die-casting technology, and offers rich basic configurations, which inevitably leads to a price that is not cheap.

However, the standard version of the Xiaomi SU7 uses a 400V architecture and a 73.6kWh lithium iron phosphate battery pack, indicating that the price will not be unreasonably high.

If we were to find a competitor for the Xiaomi SU7, the Model 3 could be considered a match, while the Jiuke 001 could also compete. On the other hand, the Galaxy E8 and Jiuke 007, which are aggressively driving the market, cannot be considered as direct competitors to the Xiaomi SU7, at least from Xiaomi’s perspective.

Currently, the Model 3 starts at 245,900 yuan, while the Jiuke 001 starts at 269,000 yuan. Therefore, setting the starting price of the Xiaomi SU7 at around 250,000 yuan seems relatively reasonable.

It is essential to understand that Tesla carries a brand premium. Despite being surpassed by Chinese electric vehicles in terms of acceleration, interior quality, and range performance at the 200,000 yuan price point, Tesla does not need to engage in price wars and still maintains a significant market share. Xiaomi is just entering the automotive market; although it has a strong brand appeal, brand premium is almost non-existent.

Furthermore, the entry-level rear-wheel-drive version of the Jiuke 001 adopts a 100kWh ternary lithium battery pack supplied by CATL, which is relatively costly. If the Xiaomi SU7 is priced similarly to the Jiuke 001, which uses a 73.6kWh lithium iron phosphate battery, it might be overly confident. While Xiaomi SU7 has advantages in driving assistance configurations, the Jiuke 001 may have some advantages in comfort configurations.

Therefore, based on the parameters released so far, I believe the starting price of the Xiaomi SU7 will be slightly lower than that of the Model 3 and Jiuke 001, making 219,900 or 229,900 yuan a more reasonable option.

As for a price below 200,000 yuan, I believe it is unlikely. While cost-effectiveness is indeed Xiaomi’s trademark, it also, to some extent, restrains Xiaomi from taking the high-end route with its smartphones.

Therefore, Xiaomi should try to avoid setting the price too low for the Xiaomi SU7 to prevent any adverse effects on future products. According to the leaks, Xiaomi’s SU7 factory capacity might only be around 80,000 units this year, averaging just over 10,000 units per month. Given Xiaomi’s market appeal, even without engaging in a price war, there should not be much sales pressure.

Trust Lei Jun; he will not disappoint us.