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Xiaomi's Impact on the Electric Vehicle Market: Sales Surge and Industry Collaborations

GOOVER DAILY REPORT July 2, 2024
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TABLE OF CONTENTS

  1. Summary
  2. Xiaomi's Entry into the Electric Vehicle Market
  3. Sales Performance and Market Impact
  4. Challenges and Dynamics in the Automotive Industry
  5. Conclusion

1. Summary

  • This report investigates Xiaomi's significant entry into the electric vehicle (EV) market, emphasizing the success of its SU7 model. It details Xiaomi’s strategic partnerships with global and Chinese suppliers like Qualcomm, NVIDIA, Bosch, BYD, and others, highlighting the advanced technological features of the SU7. Key findings include the impressive sales figures, with 50,000 orders within 30 minutes of launch and a notable increase in weekly sales. The report also compares Xiaomi’s sales performance with leading competitors, including BYD, Tesla, and Nio, and analyzes market trends, highlighting the competitive landscape of the EV industry in China.

2. Xiaomi's Entry into the Electric Vehicle Market

  • 2-1. Launch of Xiaomi SU7

  • On March 28th, Xiaomi officially launched the electric vehicle Xiaomi SU7. The launch event was significant, as within less than 30 minutes, the SU7 secured 50,000 orders, indicating a strong market appetite for Xiaomi's entry into the electric vehicle space.

  • 2-2. Configurations and Unique Features

  • The Xiaomi SU7 comes in three configurations: the standard version priced at CNY 215,900, the Pro version at CNY 245,900, and the Max version at CNY 299,900. The car is equipped with advanced technology including two NVIDIA DRIVE Orin chips delivering a combined computing power of 508 TOPS for autonomous driving and a Qualcomm Snapdragon 8295 chip for the smart cockpit. This chipset, built on 5nm technology, offers double the GPU performance and triple the 3D rendering capability compared to its predecessor, the Snapdragon 8155. The vehicle supports multiple innovative features like electronic side mirrors, surround-view cameras, passenger monitoring, a 16.1-inch Mini LED central control eco-screen from TCL CSOT, a 7.1-inch flip-up LCD instrument panel from BOE, and a 56-inch HUD head-up display from New Vision Automotive Electronics. Additionally, the SU7 includes Xiaomi's self-developed Super 800V Silicon Carbide high-voltage platform, with a peak voltage of up to 871V.

  • 2-3. Partnerships with Global and Chinese Suppliers

  • Xiaomi has leveraged robust partnerships with several global and Chinese suppliers to bolster the capabilities and features of the SU7. Internationally renowned names such as Qualcomm, NVIDIA, and Bosch have contributed to different aspects of the vehicle, from autonomous driving capabilities to smart cockpit functionalities. Chinese suppliers have played a critical role as well, with contributions from BYD, CATL, Yangjie Electronic Technology, TCL, and BOE. Notably, NVIDIA provides the autonomous driving chips, Qualcomm supplies the Snapdragon chip for the smart cockpit, and TCL CSOT, BOE, and New Vision Automotive Electronics contribute essential display components.

3. Sales Performance and Market Impact

  • 3-1. Sales Figures of Xiaomi SU7

  • In week 25 of the year (June 17 – 23), Xiaomi registered 3,300 units of its SU7 electric vehicle. This marks a 32% increase from the previous week's sales of 2,500 units. Since deliveries started in early April, this is Xiaomi's highest weekly sales figure. Over the first three weeks of June, Xiaomi sold a total of 7,900 units of the SU7.

  • 3-2. Comparison with Competitors

  • In the same week, BYD secured the top position in the China EV market, registering 66,800 vehicles, marking a 16.78% increase from the previous week's 57,200. Tesla followed with 17,400 vehicles sold, a 48.72% increase from 11,700 the week before. Nio registered 4,700 vehicles, a 38.24% increase from 3,400 the previous week. Other notable sales figures include Li Auto with 11,700 vehicles, Aito with 10,700 vehicles, Zeekr with 4,500 vehicles, Leapmotor with 4,200 vehicles, Volkswagen with 4,100 vehicles, Deepal with 3,700 vehicles, and Xpeng with 2,500 vehicles.

  • 3-3. Market Trends in Week 25

  • The China electric vehicle market saw substantial growth in week 25. BYD led the market with a firm grip, showing a weekly increase of 16.78%. Tesla's growth was even more robust with a 48.72% increase. Nio and Xiaomi also saw significant growth rates of 38.24% and 32%, respectively. The overall market performance was positive, reflecting a strong demand and increasing acceptance of new energy vehicles (NEVs) in China. Notably, the weekly report indicated an impressive rise across most manufacturers, highlighting a healthy competition and dynamic market environment.

4. Challenges and Dynamics in the Automotive Industry

  • 4-1. Impact of Huawei's Market Strategies

  • Huawei, a dominant player in technology, has recently emphasized that it will not manufacture cars, a stance reinstated in an internal resolution by founder Ren Zhengfei on March 31st. This resolution emphasized that the Huawei brand should not be used in vehicle promotion or appearance. Furthermore, Huawei reaffirmed that it does not build cars and strictly prohibits using the Huawei brand in automotive contexts. This adjustment has led to rebranding efforts in Huawei stores, replacing the 'Huawei asks the world' slogan with 'AITO' for their CELESTIAL-manufactured cars. Despite these changes, Huawei’s significant presence in the automotive sector remains through partnerships and its role as a technology supplier, adversely affecting its partners' dynamics and market performance.

  • 4-2. Changes in Sales and Partnerships

  • In early 2023, the automotive market faced a price war, significantly impacting sales. The sales volume within the industry fell sharply, with only 3,679 vehicles sold in March 2024, a significant drop from the previous year's monthly sales of over 10,000 vehicles. Huawei’s partners like Cyrus saw a notable decline in sales volumes, dropping to 4,885 vehicles by January 2023 and further to 3,505 vehicles in February, indicating a 56% and 21% decrease, respectively. The competitive pressures intensified, leading partners to reconsider their strategies. BAIC, another Huawei partner, expressed dissatisfaction with the collaboration, noting that while Huawei gained significant influence, BAIC did not benefit proportionally. Similarly, Guangzhou Automobile Group altered its cooperation, shifting from a joint development project to independent development, revealing cracks in their joint efforts.

  • 4-3. New Energy Vehicle Trends

  • New Energy Vehicles (NEVs) have become a focal point for many manufacturers. Amid these changing dynamics, Celestial launched a new NEV brand called Blue Power, incorporating BYD's Foday hybrid system, reflecting a strategic pivot to diversify and strengthen its market position independently of Huawei. Concurrently, the overall market's competitive landscape is evolving, with traditional car companies, new energy vehicle manufacturers, and major brands like Tesla and Nio aggressively pushing innovations and expansions. These shifts illustrate the industry's adaptation to new energy trends and the efforts by various players to carve out substantial market shares despite the turbulent environment precipitated by Huawei's strategic realignments and the broader market fluctuations.

5. Conclusion

  • The report illustrates Xiaomi’s strategic penetration and positive performance in the EV market, as demonstrated by the SU7’s rapid market acceptance and strong sales growth. The partnerships with industry giants like NVIDIA and Qualcomm have equipped Xiaomi with cutting-edge technology, positioning it favorably against competitors such as BYD and Tesla. However, the automotive market’s volatility and the influence of strategic moves by players like Huawei, which impacts partnerships and market strategies, present ongoing challenges and opportunities. Future research should investigate the sustained impact of these dynamics and the continuous evolution of market strategies, especially in response to new energy vehicle trends and shifting partnerships.

6. Glossary

  • 6-1. Xiaomi [Company]

  • Xiaomi is a Chinese multinational electronics company that has recently entered the electric vehicle market. Its launch of the SU7, characterized by innovative technology and strategic partnerships, marks a significant step in diversifying and expanding its market presence.

  • 6-2. SU7 [Product]

  • The SU7 is Xiaomi's fully electric vehicle, available in Standard, Pro, and Max configurations. It's noted for its high sales figures, advanced technological features including NVIDIA and Qualcomm chips, and strategic supply chain partnerships.

  • 6-3. BYD [Company]

  • BYD is a leading Chinese manufacturer of automobiles, especially new energy vehicles. It topped the EV sales chart in week 25 with 66,800 vehicles sold. BYD's robust performance sets a competitive benchmark in the market.

  • 6-4. Qualcomm [Company]

  • Qualcomm provides the Snapdragon 8295 chip for Xiaomi's SU7 smart cockpit, showcasing its significant role in the development of cutting-edge automotive technology.

  • 6-5. NVIDIA [Company]

  • NVIDIA supplies the DRIVE Orin chips for autonomous driving in the SU7. This partnership emphasizes the integration of advanced AI technologies in modern electric vehicles.

  • 6-6. Huawei [Company]

  • Huawei's strategic decisions and market presence have influenced sales strategies, partnership dynamics, and branding within the automotive industry, posing both challenges and opportunities for other market players.

7. Source Documents