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Xiaomi's SU7 looks like a Porsche, starts at just $30,000, and is selling like hotcakes in China.
Ford CEO Jim Farley said in a recent podcast interview that he’s been driving an electric vehicle made by Chinese electronics company Xiaomi and “doesn’t want to give it up.” The model, the Xiaomi SU7, looks similar to a Porsche Panamera sedan and starts at about $30,300, with the top-of-the-line variant going for about $42,100.
“This Xiaomi car… is fantastic. They sell ten thousand, twenty thousand a month,” Farley said. “I don’t like talking about the competition much, but we flew [an SU7] from Shanghai to Chicago and I’ve been driving it for six months now, and I don’t want to give it up.”
Farley didn’t mention which version of the SU7 he imported, but it’s normal for automakers to test out their competitors’ vehicles to better understand what they’re up against. Rivian CEO RJ Scaringe recently said he learned his pickups were being torn down by automakers in China.
Xiaomi is best known for making smartphones and was once referred to as the “Apple of China” for its rapid rise in the market there. It trails Huawei today but still remains a major player in the Chinese smartphone market. It also sells a range of other electronics including TVs and smart speakers which can all work interoperably within the Xiaomi ecosystem.
It may seem odd at first that a handset maker would enter the electric car market, but it’s not that unusual when you consider that BYD, one of the biggest EV makers in China, got its start making batteries for companies like Motorola. Electric cars are, after all, basically smartphones on wheels—the toughest challenge to overcome for automakers has been battery chemistry and pricing.
The SU7 is fully integrated with Xiaomi’s other products, so you can remotely control household appliances from the vehicle, for instance. Up front it has a 16.1-inch infotainment screen with smartphone mirror and Xiaomi Pilot, its software for assisted driving. The car can go from 0 to 62mph in 2.7 seconds, beating the Tesla Model 3’s time of 3.1 seconds. Xiaomi says the standard model gets 435 miles on a charge, though that number might not be reliable.
Chinese companies have been able to accomplish what Ford and Tesla have not—produce cheap electric cars that actually make money—thanks in part to the Chinese Communist Party’s EV-friendly policies and the sheer scale of its domestic car market. The goal seems to be to unseat the U.S. as a dominant global player in the future of automotive and grow China’s soft power abroad. BYD, which at one point in 2023 overtook Tesla as the biggest electric car maker in the world, has been focused on growing in developing markets, flooding them with affordable EVs and opening factories in places like Brazil.
Sadly, because of geopolitical issues, the U.S. market is all but closed to Chinese automakers right now, and neither party seems to have an appetite to change that. Back in September, the Biden administration implemented a 100% tariff on Chinese electric vehicles sold in the U.S., even though no automaker from China sells vehicles here.
Even still, one of the cheapest Chinese EVs, the BYD Seagull EV, starts at just $9,700—so factoring in the tariff, $20,000 for an electric car with an estimated range of 190 miles is not bad at all. They’re sold in Mexico as the BYD Dolphin Mini, so you could drive down south and grab one, though they’re priced closer to $20,000 USD there—still a good deal.
Ford has been struggling alongside the rest of the U.S. legacy automakers to get its EV business off the ground. Sales of EVs haven’t declined, but growth has slowed and the legacy companies have been quick to pare back their ambitions as they slowly grind towards profitability. Ford recently canceled a three-row electric SUV and delayed an electric pickup truck until 2027. The company reported a $1.3 billion loss in its Model e EV division in the first quarter of 2024 and a $1.1 billion loss in the second.
Tesla is the only company that has been able to reach profitability in EVs stateside, but CEO Elon Musk said on an earnings call this week that the company won’t be releasing a $25,000 car as many hoped. The company’s sales will be roughly flat in 2024, a far cry from the 50% year-on-year growth that Musk predicted not that long ago. Musk is hoping for growth to pick back up to 20 to 30% in 2025, but the company still sells far fewer vehicles than companies like Toyota.
Ultimately, building electric vehicles requires significant investment upfront and years of patience to see a return. There’s a bit of a chicken and egg problem—selling a lot of EVs affordability requires significant scale to drive down costs, but selling a lot of EVs requires the cars to be, you know, affordable for enough people. Trump has said that if he becomes president again, he will cut tax credits and other incentives supporting the EV industry. Don’t expect cheap Chinese EVs like the Xiaomi SU7 in the U.S. anytime soon.
