By Sarah Wu
BEIJING (Reuters) – He was referred to as China’s reply to Steve Jobs for taking Xiaomi (OTC:) from scrappy startup to an electronics big recognized for its smartphones.
With the launch of a much-hyped and against-the-odds electrical automotive, Lei Jun, Xiaomi’s co-founder and CEO, is taking over Elon Musk with a method that takes a web page from Tesla (NASDAQ:)’s playbook.
Lei, 54, took the stage in Beijing on Thursday to unveil Xiaomi’s SU7 automotive, a venture three years within the making that has attracted numerous consideration however which, Lei has warned traders, will lose cash.
Throughout Thursday’s two-hour occasion – a livestream hundreds of thousands of Chinese language tuned in to look at – Lei made a jibe at Apple (NASDAQ:) for dropping its automotive venture and declared Xiaomi’s EV superior to Tesla’s Mannequin 3.
Followers dubbed the Xiaomi CEO “Thor” on social media, a play on his surname which implies thunder in Chinese language. Some commented that his outfit – a gray blazer over a black t-shirt – regarded like one thing Musk would put on.
Already a family identify in China, Lei’s advertising technique for his EV borrows straight from Musk, stated Yale Zhang, managing director at Automotive Foresight.
“One particular person equals a whole advertising workforce,” Zhang stated. “With each phrase he says, the eye he attracts on-line is of a unique magnitude.”
Born in central China, Lei graduated from Wuhan College with a level in laptop science earlier than working his manner as much as grow to be chief govt of software program agency Kingsoft.
In 2010, he co-founded Xiaomi. By 2014, the tech startup had a valuation of $46 billion.
The Beiijng-based firm has grown with the recognition of its smartphones and residential home equipment, beloved in Chinese language households for his or her affordability and glossy styling.
Final yr, Xiaomi launched dearer smartphones to compete with Apple’s iPhone, however Lei’s determination to promote a sporty EV that pulls styling cues from Porsche will take a look at the Chinese language firm’s potential to shift to a brand new, premium market.
In 2021, Lei introduced Xiaomi would construct its personal EV, an enterprise he stated then could be “the final main entrepreneurship venture” of his life.
“Within the three years of growing this automotive, my greatest realization is that making automobiles is extraordinarily tough,” Lei stated on Thursday. “Even a large like Apple gave up on it.”
BEIJING BACKING
The SU7 – quick for Velocity Extremely 7 – enters a crowded China EV market with an attention-grabbing price ticket, beneath $30,000 for the bottom mannequin, cheaper than Tesla’s Mannequin 3 in China.
Xiaomi constructed a Beijing manufacturing facility able to producing 200,000 automobiles yearly earlier than it had regulatory approval to start out manufacturing in China. State-owned automaker BAIC Group disclosed in November it could make the automobiles for Xiaomi – on the similar Xiaomi plant.
Xiaomi, which plans to promote the SU7 solely in China for now, didn’t instantly reply to a request for remark.
Lei stated with out the help of the Beijing authorities, it could have been “unattainable” to finish the automotive in three years, in accordance with a transcript posted by auto blogger Chang Yan, who was amongst a bunch of Chinese language reporters invited to interview Lei on Thursday.
Musk additionally gained help from the Shanghai authorities when organising the Tesla manufacturing facility there. The development of Tesla’s Shanghai plant took lower than a yr after it broke floor in 2019.
Analysts stay cut up on whether or not Lei’s venture will transcend creating buzz to earn cash in a hyper-competitive EV market. “The danger is that they focus an excessive amount of on the EV house and lose concentrate on the sectors and merchandise that obtained them there,” stated Tu Le, founding father of consultancy Sino Auto Insights.
Lei stated he had initially deliberate to promote the high-end model of the SU7 for round $48,500 earlier than chopping that to about $41,500 as different automakers slashed costs.
“Xiaomi has sufficient money reserves to deal with any fierce competitors within the subsequent 5 years. And whether it is attainable, Xiaomi will search for methods to build up additional cash,” Lei stated.
Xiaomi stated it had acquired 50,000 orders within the first 27 minutes of the SU7 happening sale. The corporate had not posted an up to date quantity on Friday.
($1 = 7.2277 renminbi)
