Chinese tech giant Xiaomi is on track to officially launch its inaugural electric vehicle offering, SU7, in just about a week. Even before that, its Chief Executive had already closely observed one of its strongest competitors, Tesla.
According to CEO Lei Jun, Tesla has a unique advantage over its rivals in the electric vehicle industry.
Tesla’s capability to employ aggressive pricing strategy
Xiaomi CEO Lei Jun admitted that Tesla has a unique advantage in the electric vehicle market due to its proven excellence in car production and charging infrastructure development.
Other car companies can sell lower-priced electric vehicles as part of their strategy to boost demand. However, electric startups cannot do so as they fear being left further behind by competing major electric automakers.
In contrast, the Musk-led company already has an established name for producing cutting-edge electric vehicle models backed by its enormous charging network. Therefore, CEO Jun believes that Tesla can easily cut and hike prices without compromising its revenue like other automakers.
“Tesla is so cool, truly impressed. With the current pure electric vehicles, except for Tesla, many of them are making huge losses. The current EV market is so competitive, that only Tesla dares to raise prices.”
Xiaomi CEO Lei Jun
Tesla to increase pricing in China
Tesla apparently plans to increase the pricing of its electric vehicles in China on April 1, local media outlet CnEVPost reports, citing Cailian’s sources.
The Tesla Model Y will reportedly see a price increase of RMB 5,000 ($700). Given that some purchase incentives will expire by the end of the quarter, the looming price increase means that the Tesla electric crossover would increase by as much as RMB 23,000.
Tesla’s unique capability to manipulate pricing advanced its position in the market, enabling it to defend its dominance against newcomers.
Nonetheless, Tesla’s upcoming price increase is a piece of good news for Xiaomi, which is preparing to introduce its first EV offering next week.
Xiaomi to join the competition
Xiaomi announced plans to finally introduce its first-ever electric vehicle, the SU7, on March 28. The Xiaomi SU7 will have a base price of approximately $36,948 (266,000 RMB), while its top trim will cost $46,671 (336,000 RMB).
Therefore, the Xiaomi SU7 is more expensive than other electric vehicle models available in the Chinese market today. However, CEO Jun explained that the Xiaomi SU7 offers higher specifications than the Tesla Model 3.
“A lot of people are concerned about the pricing of the Xiaomi SU7, and I’d like to explain it here.”
Xiaomi CEO Lei Jun
According to the Xiaomi boss, the standard Xiaomi SU7 utilizes solid materials. It also apparently has extremely high sourcing costs for the initial launch.
“There is indeed some pressure on pricing, I hope you understand.”
Xiaomi CEO Lei Jun
Notably, the new Xiaomi SU7 offers two variants, the SU7 and the SU7 Max. The entry-level RWD variant has a CLTC-rated range of 668 km from its 73.6 kWh battery. Meanwhile, the SU7 Max boasts a range of 800 km from a larger 101 kWh Qilin NMC battery.
