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Japanese Prime Minister Fumio Kishida gives a press conference on March 28, 2024, in Tokyo. (Reuters/Yonhap)

Chinese smartphone maker Xiaomi unveiled its first-ever electric car on Thursday. Coming shortly after Apple abandoned plans to produce an electric vehicle of its own, this is thought to symbolize the dominance of the Chinese electric vehicle industry.

Xiaomi held an official launch ceremony for its new EV, called the SU7, on Thursday at 7 pm, which is when the vehicle went on sale. The event was streamed live on Chinese social media and on YouTube.

Xiaomi’s new EV has been displayed at 76 stores in 29 cities across China since March 25. Chinese news media said an average of over 100,000 people had stopped by the vehicle displays on each of the past three days.

The EV’s price range, which had attracted considerable speculation, runs from 215,900 yuan (US$29,874) to 299,900 yuan (US$41,497). The standard model will retail at 215,900 yuan, while the pro and max versions will sell for 245,900 yuan (US$34,026) and 299,000 yuan respectively.

While that’s somewhat higher than the expected price of 200,000 yuan (US$27,674), it’s also lower than the Tesla Model 3 (245,900 yuan, US$34,026), which Xiaomi considers to be its main competition.

The SU7 is an electric sedan that’s similar in size to the Hyundai Grandeur. When the SU7’s design was unveiled last year, there was much talk about how similar it looks to the Porsche Taycan.

“In the three years of developing this car, my biggest realization is that making cars is extremely difficult. Even a giant like Apple gave up on it,” remarked Xiaomi CEO Lei Jun.

The release of Xiaomi’s electric vehicle comes four years after Lei announced the company was entering the industry in 2020. Xiaomi has invested around RMB 10 billion (USD 1.38 billion) in the venture so far, which includes building a factory with an area of 720,000 square meters on the outskirts of Beijing.

Considering that Xiaomi’s production has previously focused on small electronic devices including smartphones, power banks and wireless earphones, its success at producing an automobile, a classic product of heavy industry, speaks volumes.

To be sure, EVs don’t need an internal combustion engine, which lowers the technical barrier a bit. Still, making an EV is a totally different proposition from a small device given the need to assemble countless parts and ensure the vehicle’s safety.

Significantly, Xiaomi has built its own vehicle production system, which includes factories, in contrast with telecommunications equipment manufacturer Huawei and search engine Baidu. Huawei doesn’t produce vehicles directly and only supplies the operating system. And while Baidu, China’s largest search engine, entered the EV market through a joint venture with Geely Auto, it has stepped back from EV production since then while reducing its share in the joint venture.

Another contrast can be drawn with US-based company Apple, which recently gave up plans to produce an EV. Apple reportedly initiated the development of a self-driving EV in 2014, when interest in autonomous driving was running high. But according to a Bloomberg report last month, Apple has now dismantled that part of its organization. The company apparently shut down its EV business because the path to profitability was unclear and because progress on autonomous driving technology hasn’t lived up to expectations.

Xiaomi is not the only Chinese EV maker to be riding high — the same can also be said of BYD, XPeng Motors and NIO. Currently, 60% of the world’s EV sales are taking place in China, and BYD brushed past Tesla to become the world’s biggest producer of EVs in the fourth quarter of 2023.

As China continues its campaign to roll out low-cost EVs, the US and Europe are fighting back by exploring subsidies for domestic firms and higher tariffs for Chinese vehicles. When the US enacted the Inflation Reduction Act in 2022, it decided that the subsidies provided under the act (up to US$7,500) would not be available to Chinese EVs.

The EU also launched an investigation last year into the Chinese government’s EV subsidies.

China for its part countered by lodging a complaint with the World Trade Organization on Tuesday alleging that the US’ Inflation Reduction Act discriminates against Chinese-made vehicles.

By Choi Hyun-june, Beijing correspondent

Please direct questions or comments to [english@hani.co.kr]