Apple and Xiaomi’s contrasting experiences in the electric vehicle (EV) market highlight the challenges and opportunities in this rapidly evolving industry. After nearly a decade of effort and $10 billion invested, Apple recently abandoned its EV project. In contrast, Chinese electronics maker Xiaomi successfully launched its first electric car after just three years, delivering 135,000 vehicles in its first year.
Xiaomi’s success can be attributed to China’s dominance in the EV supply chain. Chinese companies have become experts in electric vehicle manufacturing, allowing Xiaomi to access components quickly and cheaply. This infrastructure advantage enabled Xiaomi to bring its SU7 sedan to market swiftly, priced at $30,000 – about a quarter of the cost of a comparable Porsche.
The SU7 is equipped with artificial intelligence that assists with parking, entertains passengers, and can even program Xiaomi home appliances remotely. Xiaomi’s existing ecosystem of connected devices gives it an edge, as the car can use data from other Xiaomi products to optimize charging times and daily routines.
Xiaomi’s entry into the EV market is part of a broader trend of Chinese consumer electronics companies diversifying into automobiles. Telecommunications giant Huawei, for instance, is creating autonomous driving software and partnering with multiple Chinese automakers.
The success of Xiaomi and other Chinese EV makers is putting pressure on foreign automakers in China’s premium car market. In the year following the SU7’s release, Porsche deliveries in China decreased by nearly 30%.
Chinese electric vehicle companies have benefited from substantial government support, which has helped them gain control over the entire supply chain, including battery minerals. This early advantage has allowed Chinese companies like BYD and CATL to become the world’s largest electric battery manufacturers.
Xiaomi’s rapid progress in the EV sector shows how thoroughly China has come to dominate the electric vehicle industry. By tapping into this well-developed infrastructure and leveraging its consumer electronics expertise, Xiaomi was able to quickly bring a competitive product to market where Apple could not.
As Chinese EV makers continue to flood the global market with affordable electric cars, it seems only a matter of time before Xiaomi vehicles are seen on roads outside of China. The company’s strong brand and deep understanding of consumer preferences position it well for probable international expansion.
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