How Chinese smartphone makers Xiaomi, Huawei transformed into EV contenders

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Thanks to an advanced supply chain, companies with no history making cars are challenging for supremacy in China’s EV market

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Daniel Renin ShanghaiandYujie Xuein Hong Kong

Published: 10:00am, 26 Oct 2024Updated: 11:30am, 26 Oct 2024

In the third instalment of a three-part series on China’s electric vehicles, Daniel Ren and Yujie Xue look at why smartphone makers are finding success in the EV market. Read the first and second parts.

On a cloudy afternoon in September, in a gleaming, ultra-modern Xiaomi electric vehicle (EV) showroom in Shanghai, Justin Weng was not happy. The 39-year-old electronics engineer had just learned that he would have to wait up to 20 weeks to get the SU7 sedan he wanted, the smartphone maker’s first EV offering.

“I want to show my discerning taste to my colleagues and friends now,” he complained while pressuring a salesman to fight with upper management for an earlier delivery date. “Buying a Xiaomi car is more than just owning a transport tool. It will be a symbol of my social status because, as a tech savvy professional, I need the car to gain first-hand experiences about digital connectivity.”

Weng’s attitude speaks not only to the popularity of the SU7 but also to a shift in the competitive dynamics of mainland China’s cutthroat EV industry. With a robust supply chain churning out advanced components, even companies with no automotive legacy can, with sufficient resources, make and deliver advanced vehicles. Therefore, success relies more than before on marketing – the power that made Weng so certain that in addition to being a good form of transport, the SU7 would be a vehicle to enhance his identity.

Eventually, Weng accepted that nothing could be done to get his car earlier, and decided the wait would be worth it.

He is not alone. Domestic motorists have greeted the SU7 enthusiastically since deliveries started in early April. Priced from 215,900 yuan (US$30,347), Xiaomi sold 70,000 units between April and September.

“We vote for Xiaomi because it is already a well-known consumer tech brand and has a strong cash reserve to ensure it will survive the highly competitive market,” said Nick Lai, an analyst with JPMorgan. “These advantages are rare assets for electric car makers in China.”