The standard version of Xiaomi's SU7 has specs that far exceed those of the Model 3 and has a very high initial sourcing cost, said Lei Jun.
(Image credit: Xiaomi)
Tesla's (NASDAQ: TSLA) reported upcoming price hike is good news for Xiaomi (HKG: 1810, OTCMKTS: XIACY), which will officially launch its first electric vehicle (EV) model in 8 days.
Xiaomi founder, chairman and CEO Lei Jun commented on the report on Weibo today and tried to suggest that the SU7, even with a high price tag, is good value for money.
Earlier today, local media outlet Cailian cited insiders at Tesla China as saying that the US EV maker will increase prices in China on April 1, with the Model Y's price to be hiked by RMB 5,000 ($700).
Considering that some purchase entitlements are set to expire at the end of March, the upcoming price hike means that the actual cost for consumers to buy a Model Y will go up by as much as RMB 23,000, the report noted.
"I read rumors today that Tesla will increase prices on April 1. Tesla is so cool, truly impressed," Lei said in sharing the report on Weibo.
The current EV market is so competitive that only Tesla dares to raise prices, Lei wrote.
Lei tried to explain to his fans that the current cost of EVs is still very high, stating, "With the current pure electric vehicles, except for Tesla, many of them are making huge losses."
Tesla sold 1.81 million vehicles last year, mostly Model 3s and Model Ys, with $96.77 billion in revenue and $8.89 billion in operating profit, Lei said, citing Tesla's earnings report.
Despite its high scale and operational efficiency, Tesla only had a 9.2 percent profit margin, and for the Model 3, which currently starts at RMB 245,900, it would have to sell for more than RMB 223,000 to break even, Lei noted.
After talking about Tesla, Lei began discussing his company's upcoming SU7, which will be officially launched on March 28.
"A lot of people are concerned about the pricing of the Xiaomi SU7, and I'd like to explain it here," he wrote.
The standard version of Xiaomi's SU7 has specs that far exceed those of the Model 3, uses solid materials, and has very high sourcing costs for the product's initial launch, he said.
"There is indeed some pressure on pricing, I hope you understand," Lei concluded.
Xiaomi made the SU7 debut on December 28, 2023, when some core specs were mentioned, but pricing information was not released.
Yesterday, local media outlet Baobian News reported that Xiaomi has finalized the pricing of the SU7, which has been lowered by RMB 30,000 to RMB 50,000 compared to last year's expectations.
Pricing for the standard version of the Xiaomi SU7 is likely to start at RMB 266,000, with the top-trim version starting at RMB 336,000, the report said, adding that the price may be further adjusted ahead of the launch.
($1 = RMB 7.1983)
Xiaomi has finalized SU7 pricing, significantly lower from last year's expectations, report says
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