Ford's Lead Executive Has Been Utilizing a Xiaomi Electric Vehicle for Six Months and Holds No Intention of Relinquishing It
Ford's Lead Executive Has Been Utilizing a Xiaomi Electric Vehicle for Six Months and Holds No Intention of Relinquishing It
In a recent podcast conversation, Ford CEO Jim Farley shared his enthusiasm for an electric vehicle manufactured by Chinese tech giant Xiaomi, specifically the Xiaomi SU7. Farley praised the SU7, mentioning its popularity with sales of 10,000 to 20,000 units per month. He's been driving the vehicle for half a year and doesn't want to give it up. The SU7 is reminiscent of a Porsche Panamera sedan, and its price point starts at around $30,300, with a top-tier model costing roughly $42,100.
Farley didn't specify which version of the SU7 he's using, but it's a common practice for automakers to evaluate their competition by testing their vehicles. Rivian CEO RJ Scaringe mentioned that his company's electric pickup trucks were being dismantled by rivals in China.
Xiaomi is famous for producing smartphones and was once referred to as the "Chinese Apple" due to its rapid market growth. While it's no longer the front-runner in the Chinese smartphone market, it still holds a significant position. The company also sells electronics such as TVs and smart speakers that work seamlessly within the Xiaomi ecosystem.
Entering the electric vehicle market may seem unexpected for a handset manufacturer, but it's not that unusual given that some EV manufacturers, like BYD, have a background in making batteries for electronics. EVs can be thought of as "smartphone-on-wheels," with the primary challenge being improvements in battery chemistry and cost-effectiveness. Assembling cars is now just a table-stakes function, and there are manufacturing companies that construct vehicles for various car brands on a contract basis.
The Xiaomi SU7 is fully integrated with Xiaomi's product line, allowing you to control appliances within your house from the vehicle. The infotainment system features a 16.1-inch screen, smartphone mirroring, and Xiaomi Pilot, its autonomous driving software. The vehicle can accelerate from 0 to 62 mph in 2.7 seconds, surpassing the Tesla Model 3's time of 3.1 seconds. Xiaomi claims that the standard model offers a range of 435 miles on a single charge, although this figure may not be entirely reliable.
Xiaomi's success in producing affordable electric vehicles is partially due to China's favorable EV policies, access to battery raw materials, and its large domestic car market. The goal is to challenge the U.S. and increase China's influence globally. In 2023, BYD, Xiaomi's Chinese competitor, surpassed Tesla to become the world's largest electric car manufacturer by volume. BYD is now focusing on expanding into developing markets, offering affordable EVs and expanding factories in countries like Brazil.
Currently, the U.S. market is largely closed to Chinese automakers due to geopolitical issues. In September 20XX, the Biden administration imposed a 100% tariff on Chinese electric vehicles sold in the U.S., despite there being no Chinese car manufacturers in the U.S. market.
One of the most affordable Chinese EVs, the BYD Seagull EV, starts at just $9,700, although factoring in the tariff, the price for the vehicle with an estimated 190-mile range becomes $20,000. The BYD Seagull EV is available in Mexico as the BYD Dolphin Mini, although it is priced slightly higher there.
Ford, like other U.S. legacy automakers, is having trouble establishing its electric vehicle business. Sales of EVs have not declined, but growth has slowed down, and the American companies are taking their time to achieve profitability. Ford recently announced that it would postpone an electric pickup truck launch until 2027 and canceled a three-row electric SUV. The company reported a $1.3 billion loss in its Model e EV division in the first quarter of 2024 and a $1.1 billion loss in the second quarter.
Tesla is the only car manufacturer to achieve profitability in the U.S. electric vehicle market, but Tesla CEO Elon Musk indicated on an earnings call this week that the company will not be releasing a $25,000 model as some hoped, and Tesla's sales growth will be flat in 2024. With such a slow growth rate, Tesla still lags behind automakers like Toyota in terms of unit sales.
Building electric vehicles requires significant upfront investment and patience to see returns. There is a bit of a "chicken and egg" problem-selling a lot of EVs at an affordable price requires a significant scale to drive down costs, but in order to sell a lot of EVs, they need to be affordable for the mass market. Trump has suggested cutting tax incentives for the EV industry if he returns to the presidency, which may affect the availability of cheap Chinese EVs like the Xiaomi SU7 in the U.S. in the near future.
The future of technology in the automobile industry is evident with companies like Xiaomi, known for its smartphones, entering the electric vehicle market. With the popularity of the Xiaomi SU7, other tech giants might consider following suit, seeing the potential of EVs as "smartphone-on-wheels."
Xiaomi's success in the electric vehicle market, particularly in China, could influence the global future of technology-driven cars, as more affordable and efficient EVs become available to a wider audience.