Auto suppliers not that excited about Xiaomi's SU7

Annabelle Shu, Taipei; Peng Chen, DIGITIMES Asia 0


Chinese tech giant Xiaomi is on track to launch its first battery EV (BEV), SU7, on the evening of March 28.

While Lei Jun, Xiaomi's founder, once referred to the vehicle as the most beautiful and the smartest EV offering the best driving experience, Taiwan-based automotive suppliers hold conservative views on the car.

According to automotive parts suppliers who have localized their businesses in China, the EV market remains highly competitive in China and the world. No carmaker can be confident that they will ultimately win the game.

Tesla and BYD have been the two EV leaders in China. Sources said that although Xiaomi can build a fancy car, the company is unlikely to challenge the front-runners' positions.

They also said making a car is not a simple task. Gasoline cars spent more than 100 years to get where they are, not to mention the time EVs will need. Even a big player like BYD encountered several accidents when transitioning to EVs, sources added.

Suppliers focusing on the luxury car market said Xiaomi did not approach the so-called luxury car supply chain, even though the company said it targets the segment. As China strives to foster local supply chains, Xiaomi will likely work primarily with domestic suppliers.

Sources said the definition of a luxury car in China might differ from that of other markets due to the economic conditions or policies. Whether Xiaomi's SU7 offers the hardware of a luxury car still needs to be verified.

Suppliers said tech companies can boast advantages in software and ecosystems when they become carmakers. However, safety and quality are the fundamentals of a vehicle.

Lei has said that a smart EV has to be a nice car that provides an outstanding experience. Therefore, Xiaomi did not loosen its requirements for the car's hardware and performance. Whether the company did what it said is also worth considering.

Xiaomi introduced its first EV to the market at a technology event at the end of 2023. The SU7 has a similar wheelbase and body length to Porsche, McLaren, and Tesla models. The company also named its e-motor HyperEngine V8s to pay tribute to the internal combustion engine, V8.

Suppliers said data communication is a critical part of smart technology. China's intense relationships with the US and Europe will likely impact the future of tech players-turned-car companies like Xiaomi and Huawei. These companies might only see success in China and will have difficulties expanding to the West.