Which tech giant has an interconnected ecosystem of products, a fiercely loyal fan base, and a reputation for constant innovation? In the U.S., many would say Apple. In China, however, the answer is Xiaomi.
Over the years, Xiaomi has carefully marketed itself to younger consumers, cultivating a near-cult following. To millions in China, Xiaomi isn’t just a smartphone brand—it’s Apple, Tesla, and Google rolled into one. And unlike Apple, Xiaomi has managed to build something Silicon Valley couldn’t: a car.
The company’s shares recently hit record highs after overwhelming demand for its new $35,000 electric SUV. Remarkably, Xiaomi built an entire EV supply chain in just three years, a feat that rivals struggled with for decades. Profits soared as customers rushed to place orders. But dominating the world’s most competitive EV market won’t be easy—China has over a hundred manufacturers battling for the same buyers. To grow further, Xiaomi must become a global brand, a challenge made harder by trade barriers that keep the U.S.—the world’s largest economy—off limits.
Still, Chinese automakers are already making inroads elsewhere. The question now is: will Xiaomi’s road ahead be smooth, or full of bumps?
Xiaomi is already a household name in China. Its smartphones are sleek, affordable, and designed with creativity in mind—positioned as cheaper alternatives to Apple and Samsung, though often not quite on par with the iPhone in build quality. What really draws buyers, however, is Xiaomi’s operating system and its vast connected ecosystem. From toothbrushes and scooters to smartwatches and even mattresses, Xiaomi wants to integrate itself into every aspect of daily life. The car project is simply the missing piece in that puzzle.
But there’s another side to this story. By 2021, Xiaomi hit a major roadblock. U.S. sanctions cast doubt over the future of its smartphone business, which made up the bulk of its revenue. This forced founder and CEO Lei Jun—a figure often compared to Steve Jobs in China—to rethink the company’s path forward. Entering the EV market was both a survival strategy and an opportunity.
Yet, the leap was enormous. Unlike a phone, which has a few thousand components, a car requires tens of thousands and a complex supply chain. Lei Jun openly admitted he knew little about EVs, so he turned to talent. Xiaomi aggressively recruited industry veterans, luring top engineers from Geely, BMW, SAIC, and Wuling with irresistible salaries. Armed with expertise, the company invested $1.6 billion into more than 100 firms and built its own factory in Beijing.
By 2024, Xiaomi launched its first car—the SU7 sedan. While critics noted its resemblance to Porsche’s Taycan, Xiaomi insisted it was charting its own path. Regardless, the vehicle’s affordability and sleek design struck a chord. The SU7 sold rapidly, followed by the YU7 SUV at around $35,000, both positioned as strong rivals to Tesla’s Model 3 and Model Y. Impressively, Xiaomi produced its first 100,000 cars in just 230 days—a pace many competitors couldn’t match.
China’s EV landscape helped make this possible. Over the past decade, massive government investments built a mature supply chain, charging network, and technology ecosystem, allowing new entrants like Xiaomi to scale quickly. In 2024 alone, China accounted for 64% of global EV sales. Still, compared to giants like BYD and Tesla, Xiaomi remains a small player.
That hasn’t stopped it from setting bold goals. Lei Jun has declared Xiaomi’s ambition to become one of the world’s top five automakers within the next 15 to 20 years. But expansion beyond China is fraught with challenges. Geopolitical tensions and tariffs from the U.S., EU, Canada, and others stand in the way. The U.S., in particular, has imposed a 100% tariff on Chinese EVs, effectively shutting Xiaomi out.
The global EV market is in flux—Tesla’s sales are slowing, while BYD dominates at scale. Whether Xiaomi can break through and secure its place among the world’s leading automakers remains to be seen. One thing is clear: what began as a smartphone maker is now steering toward a future far bigger than anyone imagined.
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