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, according to local media.
(Image credit: Xiaomi EV)
Xiaomi's (HKG: 1810, OTCMKTS: XIACY) first electric vehicle (EV) model, the SU7, is facing a pricing dilemma, with an ongoing price war leading its management to significantly lower its expectations.
The smartphone maker has set pricing for the SU7, which has been cut by RMB 30,000 ($4,170) to RMB 50,000 compared to last year's expectations, local media outlet Baobian News said in a report yesterday.
Pricing for the standard version of the Xiaomi SU7 is likely to start at RMB 266,000 ($37,000), with the premium version starting at RMB 336,000, the report said, adding that the pricing may be further adjusted ahead of the launch.
Xiaomi has held several management meetings to discuss how to price the SU7 and whether to adjust the pricing, according to the report.
The anxiety of the smartphone maker's founder, chairman and CEO Lei Jun is evident, as he is afraid of pricing it too high resulting in low sales, and even more so, pricing it too low affecting Xiaomi's premium image, the report said.
Currently, Xiaomi's SU7 is targeting competitors primarily at the Tesla (NASDAQ: TSLA) Model 3 and the Zeekr 001, not only with similar specs, but also with matching prices, the report noted.
Xiaomi's internal team believes that the SU7, if priced at slightly above RMB 200,000, is expected to be a hot seller given the purchasing power of Xiaomi's established phone users and market feedback, the report said.
Pricing it above RMB 300,000 could result in loss of sales, Baobian News said. However, it could help Xiaomi gain a foothold in the premium market and draw in a segment of young people who buy foreign premium car brands, a milestone victory for Xiaomi EV, the report noted.
Xiaomi officially announced its entry into car-making on March 30, 2021 and made the SU7 debut on December 28, 2023.
The smartphone maker will officially launch the SU7 on March 28 and deliveries will begin soon after the launch, it announced on March 12.
Xiaomi has not previously mentioned a possible price range for the SU7. Local media outlet Jiemian cited an unnamed source at a major insurance company in a January 30 report that said the SU7's top-trim version costs RMB 361,400 for insurance purchase.
This means that the Xiaomi SU7's starting price will likely be between RMB 250,000 and RMB 370,000, Jiemian's report noted.
For reference, the Tesla Model 3 is currently offered in two versions in China, with starting prices of RMB 245,900 and RMB 285,900, respectively. The Xiaomi SU7 is larger than the Model 3.
Deliveries of the Xiaomi SU7 are expected to begin in April, the Baobian News report said.
In addition to the regular model, Xiaomi will also be launching a founding commemorative model for the SU7, which will be marked Founder's Edition on the body's radar position, according to the report.
Only 1,000 units of the Xiaomi SU7's commemorative model will be available, with the first 1,000 consumers placing an order to have it customized at the factory, the report said.
($1 = RMB 7.1994)
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