Apple may have halted its efforts to build an electric car but Chinese smartphone maker Xiaomi is accelerating. Even with Tesla and BYD dominating the home market, being a smartphone maker gives it the potential to carve out space in China’s saturated EV market.
Xiaomi’s shares rose 12 per cent on Tuesday, after it said it would start selling its much-anticipated SU7 vehicles this month. The company has spent more than Rmb10bn ($1.4bn) and more than three years to develop the cars.
During those three years, China’s BYD has taken hold of the local market with more than a third of the sector. Generous state reimbursements for EV purchases ended in 2022. In the past year, a price war between local groups and Tesla has intensified, putting pressure on margins. Meanwhile, sales of battery-powered EVs rose 18.2 per cent in the first two months of the year, slower than the 21 per cent for the full year last year, according to data from the China Passenger Car Association.