Xiaomi is gearing up for the official launch of its first electric vehicle (EV), the SU7, amidst reports of an upcoming price hike by Tesla in China. The news of Tesla’s price increase has prompted Xiaomi founder, chairman, and CEO Lei Jun to comment on the value proposition of the SU7, even with a potentially high price tag.
Reports from local media outlet Cailian suggest that Tesla will raise prices in China on April 1, with the Model Y’s price expected to increase by RMB 5,000 ($700). This price hike, coupled with the expiration of some purchase entitlements at the end of March, could result in a total cost increase of up to RMB 23,000 for consumers looking to buy a Model Y.
Lei Jun took to Weibo to share the report and praise Tesla, stating, “I read rumors today that Tesla will increase prices on April 1. Tesla is so cool, truly impressed.” He also highlighted Tesla’s ability to raise prices in a competitive EV market, noting that many EV manufacturers, apart from Tesla, are facing significant losses.
Speaking about the pricing of EVs, Lei emphasized the challenges faced by manufacturers, stating, “With the current pure electric vehicles, except for Tesla, many of them are making huge losses.” He pointed out that despite Tesla’s high sales volume and operational efficiency, the company only achieved a 9.2 percent profit margin, indicating the difficulties in the EV market.
Transitioning to Xiaomi’s SU7, Lei discussed the vehicle’s specifications, highlighting that they exceed those of the Model 3 and use high-quality materials, leading to high sourcing costs for the product’s initial launch. He acknowledged the pressure on pricing but emphasized the value proposition of the SU7.
The Xiaomi SU7 was first unveiled on December 28, 2023, with core specs mentioned but without pricing information. Recent reports suggest that Xiaomi has finalized the pricing of the SU7, with prices lowered by RMB 30,000 to RMB 50,000 compared to last year’s expectations. The standard version of the SU7 is expected to start at RMB 266,000, with the top-trim version starting at RMB 336,000, although the price may be further adjusted before the launch.
As Xiaomi prepares to enter the EV market with the SU7, the company faces the challenge of pricing its vehicle competitively while maintaining its value proposition in the face of increasing competition and market dynamics.
