Xiaomi’s EV Push Faces Headwinds: A Sign of Maturing Market or Early Roadblock?
Xiaomi, the Chinese tech giant known for its smartphones, experienced a 24% drop in net profit during the fourth quarter of 2025. This downturn coincides with its ambitious entry into the electric vehicle (EV) market, raising questions about the challenges facing newcomers in this increasingly competitive landscape.
The SU7 Launch and Initial Reception
Xiaomi’s SU7, launched in late March 2024, aimed to challenge Tesla’s dominance in the Chinese EV market. The standard version was priced at 219,900 yuan, undercutting the Tesla Model 3’s starting price of 235,500 yuan. Initial orders exceeded 15,000 within the first 34 minutes of the launch, demonstrating significant consumer interest. However, this pace was slower than the initial frenzy surrounding previous Xiaomi releases like the first-generation SU7 and YU7.
Shifting Strategies: From Speed to Safety
A notable shift in Xiaomi’s marketing strategy has emerged. CEO Lei Jun is now emphasizing vehicle safety over performance metrics like acceleration. This signals a move away from the “newbie protection period” where innovative features and speed often overshadow concerns about reliability. The company is proactively aligning with future safety regulations, including those set for 2027.
Competition Intensifies and Order Dynamics Change
The EV market is becoming increasingly crowded. The slower order rate for the recent SU7, compared to earlier models, reflects a cooling of initial market enthusiasm and a more competitive environment. Xiaomi began mass production of the new generation SU7 two months ahead of schedule, anticipating high demand, but likewise acknowledging that managing a surge in orders can create logistical problems.
Branding Evolution and Celebrity Endorsements
Xiaomi is moving away from founder-centric marketing, utilizing celebrity endorsements to broaden its brand appeal. Actress Shu Qi and sprinter Su Bingtian were featured in the SU7 launch campaign, playing on the homophone of “SU7.” This represents a broader branding strategy aimed at establishing Xiaomi as a serious contender in the EV sector.
Industry Alliances and Absent Faces
The guest list at the SU7 launch event revealed potential shifts in industry alliances. Notable absences included leaders from Great Wall Motor and Nio, suggesting a changing competitive dynamic within China’s automotive industry.
Price Adjustments and Market Positioning
The new-generation SU7 saw a price increase of 4,000 yuan compared to the first-generation model. The Pro version is priced at 249,900 yuan, and the Max version at 303,900 yuan. Despite the increase, the SU7 remains competitively priced against rivals like Tesla.
FAQ
- What is the starting price of the new Xiaomi SU7? The standard version of the new-generation SU7 starts at 219,900 yuan.
- What is Xiaomi’s new focus with the SU7? Xiaomi is now prioritizing vehicle safety over performance metrics like acceleration.
- How many orders did the new SU7 receive initially? Over 15,000 orders were locked in within the first 34 minutes of the launch.
Pro Tip: Keep an eye on Xiaomi’s supply chain management. Successfully navigating production and delivery will be crucial for maintaining momentum in the competitive EV market.
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