• 21.07.2024

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    Auto news from China

    Xiaomi’s Next Move: Range-Extended SUV for Family Users

    Jul 10, 2024

    Interface News reporter | Zhou Shuqi After the first model SU7 was launched and received a large number of orders, consumers and competitors are closely watching Xiaomi’s next move. Apart from pure electric models, Xiaomi may also enter the range extender field. According to 21st Century Business Herald, Xiaomi’s third model is a range-extended SUV for family users, targeting the same market as Ideal Car, expected to be launched in 2026. Despite previous reports, Xiaomi officially denied planning range-extended products. A source close to Xiaomi revealed to Interface News that Xiaomi has started developing range-extended products, priced lower than the SU7. In October last year, Xiaomi’s official website posted several job openings related to range extender systems. New energy vehicle brands with ambitious sales targets find it hard to abandon range extender technology. Data from the China Passenger Car Association shows that in June, wholesale sales of pure electric and range-extended new energy vehicles increased by 5.6% and 113% respectively compared to the same period last year, with the latter’s market share growing rapidly, becoming the preferred choice for fuel vehicle owners. Lei Jun has stated that Xiaomi’s goal is to become one of the top five global automakers in 15 to 20 years. To achieve this goal, Xiaomi’s annual sales need to reach 300,000 to 400,000 units to achieve a balance between profit and loss.

    Xiaomi's Next Move: Range-Extended SUV for Family Users

    Xiaomi cars have a successful template to follow. Ideal and NIO rank top two in the high-end new energy vehicle market above 200,000 yuan (27490$), with monthly sales exceeding 40,000 units; Zhiji Auto achieved a historical high in June with 20,000 units sold, relying on the “half-price Ideal” route. Zhiji Auto is preparing to compete directly with Xiaomi cars. An employee of Zhiji Auto revealed to Jiemian News that they are highly vigilant about Xiaomi cars’ price reductions and extended-range products. 36Kr reported that Xiaomi’s second new car will be positioned as a pure electric SUV, expected to be launched in the first half of next year; the third car is tentatively positioned at the 150,000 yuan (20620$) level. From leaked disguised car photos on social platforms, Xiaomi’s second car model may resemble the Ferrari Purosangue in appearance. Xiaomi cars are gradually expanding into the lower-tier market with three models in three years, aiming to reach a wider user base. However, to compete in the mainstream market dominated by BYD, Xiaomi cars need to achieve extreme cost management. A senior executive of a new force pointed out to Jiemian News that the company will not consider entering the 150,000 yuan (20620$) level market in the short term, as it is difficult to compete with BYD in terms of brand influence, product spectrum, and cost pricing.

    A parts company executive who has had contact with Lei Jun told Jiemian News that in Lei Jun’s view, vehicles and hardware are not the main profit channels, software and ecosystems have more imaginative space. Lei Jun is willing to push hardware costs to the extreme, redefining the automotive parts industry from the perspective of consumer electronics. “Why use vehicle-grade components when considering extreme costs? The automotive industry defaults to vehicle-grade standards for the functional definition and testing of automotive parts, but we don’t understand why these parts need to be vehicle-grade and go through so many processes. It’s just been maintained this way for decades, satisfying the process before they can be released.” Due to tight R&D time constraints, Xiaomi’s first car model used existing mature parts from suppliers. But in the development process of the second and third car models, Lei Jun has the motivation and time to further compress costs.