Photo: sugardesign_1 via Instagram
Xiaomi is the first smartphone maker to actually sell a car, beating Sony and Apple to the punch. The young EV maker successfully launched the SU7 executive sedan and is working on a Tesla Model Y rival. A new report from China claims that Xiaomi will launch an affordable EV model in 2026, with a price target of 150,000 yuan ($20,700).
Tesla has cozied up with the idea of an affordable model for the past years, but recent reports indicated that it might delay the plans and bring the related robotaxi first. This looks similar to what happened to the Cybertruck after the 2019 unveiling. Tesla hesitated to start working on it, then added and removed features and was unable to freeze the development. By the time the Cybertruck arrived in November 2023, the market was already flooded with electric pickups.
The $25,000 Tesla EV has been announced, scrapped, and then put back on the menu before being put on the back burner again. However, the EV market is a lot different now than it was in 2019 when the Cybertruck was unveiled. Delaying the affordable EV model further means that Tesla might not be able to compete with other affordable EVs on the market. Tesla's model might have more compelling features, but in this case, it will end up costing more.
If the $25,000 target is Tesla's final offer, Chinese carmakers have already undercut it. Even if Tesla does not suffer in North America, thanks to the Chinese companies being locked out of the market, the same is not true in other markets. China is Tesla's biggest market and the one where the American carmaker is the most vulnerable. Affordable EVs are already eating Tesla's launch, and more models will arrive soon.
Xiaomi, the latest company to enter the car market, is already giving Tesla a headache. The SU7 electric sedan launched in March offers Model S space and features at a price lower than the Tesla Model 3. The SU7 also proved a hit, making Xiaomi confident it will sell over 100,000 units in 2024. The smartphone company is not standing still and is already working on a Tesla Model Y rival, which will start production in the first half of 2025.
Xiaomi's aggressive strategy will not end with the electric compact crossover. According to media outlet 36kr, the Chinese company is working on an affordable EV that will sell in the 150,000 yuan ($20,000) segment. This is lower than Tesla's planned next-generation EV. Xiaomi has high expectations for the new model regarding production and sales targets. The affordable EV marks a logical expansion of Xiaomi's strategy. Similar to how Tesla started, the Chinese company first launched a more expensive (although still affordable) family sedan.
Xiaomi will burn some steps and go straight to the compact crossover next year, one year after its first model started deliveries. This pace will continue with the affordable EV, whose form factor remains unknown. Xiaomi should establish a good reputation by the time it arrives, or the affordable EV will not sell in the estimated volumes. People tend to overlook flaws in the first products of a company, but they are less forgiving with subsequent launches.
The $25,000 Tesla EV has been announced, scrapped, and then put back on the menu before being put on the back burner again. However, the EV market is a lot different now than it was in 2019 when the Cybertruck was unveiled. Delaying the affordable EV model further means that Tesla might not be able to compete with other affordable EVs on the market. Tesla's model might have more compelling features, but in this case, it will end up costing more.
If the $25,000 target is Tesla's final offer, Chinese carmakers have already undercut it. Even if Tesla does not suffer in North America, thanks to the Chinese companies being locked out of the market, the same is not true in other markets. China is Tesla's biggest market and the one where the American carmaker is the most vulnerable. Affordable EVs are already eating Tesla's launch, and more models will arrive soon.
Xiaomi, the latest company to enter the car market, is already giving Tesla a headache. The SU7 electric sedan launched in March offers Model S space and features at a price lower than the Tesla Model 3. The SU7 also proved a hit, making Xiaomi confident it will sell over 100,000 units in 2024. The smartphone company is not standing still and is already working on a Tesla Model Y rival, which will start production in the first half of 2025.
Xiaomi's aggressive strategy will not end with the electric compact crossover. According to media outlet 36kr, the Chinese company is working on an affordable EV that will sell in the 150,000 yuan ($20,000) segment. This is lower than Tesla's planned next-generation EV. Xiaomi has high expectations for the new model regarding production and sales targets. The affordable EV marks a logical expansion of Xiaomi's strategy. Similar to how Tesla started, the Chinese company first launched a more expensive (although still affordable) family sedan.
Xiaomi will burn some steps and go straight to the compact crossover next year, one year after its first model started deliveries. This pace will continue with the affordable EV, whose form factor remains unknown. Xiaomi should establish a good reputation by the time it arrives, or the affordable EV will not sell in the estimated volumes. People tend to overlook flaws in the first products of a company, but they are less forgiving with subsequent launches.
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