The Xiaomi SU7 electric sedan lived up to its hype as THE EV launch of the year.
Just 24 hours after Founder & CEO Lei Jun officially launched it to market on March 28 at a price range of RMB215,900-RMB299,900 (roughly $30,000-$42,000), the company had received 88,898 firm orders for the Chinese smartphone maker’s first EV model (which by the way is quite an auspicious number for those that understand Chinese culture, the only number more auspicious would have been 88,888). Within the first 27 minutes after the order book had opened soon after launch, 50,000 firm orders had been placed by “Mi fans.”
For those that are doing the math, 88,898 orders translate to nearly half a billion RMB in deposits alone and potentially represent upwards of RMB20 billion in revenues based on the mid-trim Pro pricing of RMB245,900. The big caveat is Xiaomi’s definition of firm orders, unlike industry norm, denote those placed with a deposit of RMB5,000 that is REFUNDABLE within 7 days, after which they become non-refundable. Therefore, the grain of salt is that it is unlikely that every single one of those firm orders translates to a final purchase and delivery. But even if only half of those do, it would easily break the record for the most firm order (non-refundable) intakes within the shortest possible timespan for a new EV model post-launch in China (or the world, for that matter).
To put it into perspective, it took 25 days for the AITO M7 to get to 50,000 firm orders, 62 days for the AITO M9 and 40 days for the ZEEKR 007. The all-new ZEEKR 001 had over 30,000 firm orders 30 days after it launched at the end of February, not too shabby by any means. But it took less than half an hour for the Xiaomi SU7 to get to a firm order level that would normally take days and weeks for some of the most competitive EVs that recently launched to market. It’s not an apples-to-apples comparison but nevertheless what Xiaomi has achieved with the SU7 launch is unheard of in the industry: they are flying off the shelves like Xiaomi’s smartphones.
Xiaomi is also moving fast with vehicle deliveries: the 5,000 units of the limited Founder’s Edition SU7 will begin in early April, the Standard (RMB215,900) and Max (RMB299,900) versions will begin deliveries in late April and the Pro (RMB245,900) version will begin deliveries in late May. By the time I go back in late April for the Beijing Auto Show, I expect to see tons of SU7s on the streets and I certainly look forward to test-driving one myself.
It was exactly three years ago today that Lei Jun officially announced to the world that the world’s №3 smartphone maker by shipment volume would enter the smart EV market and invest $10 billion over 10 years, in what Lei Jun says will be his final try at starting up a new venture and he’s going all in. In fact, he’s now the de-facto CEO of Xiaomi EV, having given up most of his other responsibilities to President William Lu.
In my commentary written that day — Xiaomi smart EV is “ALIVE”: what’s next? — my conclusion was: “…the ultimate test is figuring out an R&D, manufacturing, sales & branding system that work for Xiaomi and its fans. If Xiaomi can do this and ultimately come up with a quality car as promised that plays into its current ecosystem, I wouldn’t worry about the market because its fan base will buy them in a heartbeat.”
Well, three years later, it’s fair to say that Xiaomi has passed that test with high marks and order intake volumes probably have exceeded 100,000 units by now, beating every expectation imaginable.
Which begs the same question I asked three years ago: what’s next?
The simple answer is: now comes the difficult part of making enough SU7s at a quality level as fast as possible to meet demand, and managing that production ramp and potential complaints, criticisms (which have already started to surface) and both hardware and software quality issues as SU7s begin to go into customers’ hands. It’s a challenge for any carmaker, let alone a new entrant like Xiaomi launching its first ever EV model without any prior vehicle manufacturing experience.
The success of the Xiaomi SU7 so far, if the firm order numbers are any indication of that success, is predicated on the Xiaomi brand and Lei Jun himself, probably more so than the actual vehicle itself. The aura around the Xiaomi brand and Lei Jun is something that the other smart EV startups and their founders did not have, at least not as much. And they certainly did not have the fanbase that Xiaomi and Lei Jun had when they launched their EV ventures, neither did they have the smart IoT ecosystem that Xiaomi had with their smartphones, tablets, TVs and every other device and appliance imaginable, many of which yours truly owned and used when living in China.
Xiaomi is almost like a national champion and Lei Jun a national hero because of the way he has developed Xiaomi from a no-frills Chinese smartphone maker into a global smart device and IoT company on the same breath as Huawei and Apple. Lei Jun with his lovable and humorous presentation style is a fast learner and marketing guru, and knows how to get traffic, which has been abundant if not overkill over the past three months ever since the SU7 was unveiled at Xiaomi’s Tech Day in late December 2023. Getting a TANK 700 Hi4-T SUV from GWM founder Wei Jianjun in return for a SU7, inviting Wei as well as founders of NIO, Xpeng and Li Auto to the SU7 launch event and putting out a video of himself with Wei and NIO Founder William Li were just some of the marketing stunts leading up and following the launch.
That is not to take away any credit from the SU7 being a competitively priced EV with rich features commensurate with what’s out there on the market, especially benchmarking against the Model 3 and pricing it at a starting price that is RMB30,000 cheaper than the Model 3. Yes, “cheaper than Model 3” is in fact a moniker for the SU7 following similar slogans that have become viral this year such as BYD’s “cheaper than gas” and ONVO (NIO’s mass market brand)’s “better than Model Y.”
Though media reviews of the SU7 have been largely positive so far and props to Xiaomi for delivering on the promise of launching a vehicle in just three years that would otherwise be unthinkable at any traditional automaker, the SU7 is far from being the best EV on the market from a spec perspective. There is no doubt in my mind that it will compete, the question is, how long can the fervor last given the current bloodbath in EV pricing and competition, how many of those firm orders actually get converted to sales and how positive or negative the feedback from those initial customers will be.
Prototypes are easy, production is hard, to borrow a famous quote from Elon Musk. Xiaomi’s current plan is to produce 70,000 SU7s this year at its Beijing plant with a reported annual output capacity of 150,000 units or peak production rhythm of 40JPH.
If Xiaomi sells every single one of these 70,000 SU7s that it produces, it’ll be a success.
