Xiaomi's SU7 orders reach 70,000, EV business to stay focused on China

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China's Xiaomi has secured locked-in orders for more than 70,000 of its SU7 electric cars as of Saturday and the company intends to keep its automotive business "100% focused" on the Chinese market for the next three years, founder Lei Jun said on Tuesday.

The smartphone maker is targeting more than 100,000 deliveries for the SU7 in 2024, he said in comments at an investor conference posted on his official WeChat account.

Locked-in orders refer to those where buyers have opted for non-refundable deposits.

Xiaomi launched its car, which draws styling cues from Porsche, late last month. It enters a crowded China EV market with an attention-grabbing price tag - under $30,000 for the base model, which is $4,000 cheaper than the base model of Tesla's Model 3 in China.

The company has said it expects to lose money on the SU7 and Lei said on Tuesday, while also noting that most of its suppliers also supplied the likes of Mercedes Benz, BMW and Audi.

"With such expensive suppliers and such expensive parts, the gross profit margin will not be very high," he said.

"I estimate that the gross profit margin will be around 5-10%," he said, adding that Xiaomi was discussing increasing production capacity and further cost support from suppliers.

Better known for making affordable smartphones and home appliances, Xiaomi intends to invest another 11-12 billion yuan this year in new businesses including the automotive unit and the operating mobile system for its phones, he said.

Ultimately, his goal was for Xiaomi to become one of the top five automakers globally in 15-20 years, he said.

Car giants vie for EV crown at Beijing's Auto China show

Chinese car giants locked in a cut-throat price war descend on the capital for the start of the Auto China show Thursday, vying to draw consumers and headlines in the world's biggest electric vehicle market and abroad.

China's EV sector has exploded in recent years, and firms are now engaged in a no-holds-barred battle to offer customers the coolest accessories at the lowest prices.

EV makers from China have made inroads into markets from Europe to Southeast Asia and Tesla's Elon Musk described them in January as "the most competitive car companies in the world".

Beijing's Auto China show, which lasts until May 4, will see dozens of firms square off in a bid to draw customers at one of the country's biggest car shows.

There are a staggering 129 EV brands in China, but just 20 have managed to achieve a domestic market share of one percent or more, according to data compiled by Bloomberg.

Among the most closely watched firms will be BYD -- "Build Your Dreams" -- a Shenzhen-based battery and automotive giant that beat Tesla in last year's fourth quarter to become the world's top seller of EVs.

Tesla reclaimed that title in the first quarter of this year, but BYD remains firmly on top in its home market.

The firm is expected to unveil its first electric pickup -- the BYD Shark -- at the event.

The Shark's price has yet to be disclosed, but BYD has said it will be equipped with the firm's dedicated off-road technology platform.

Traditional automaking juggernauts -- who have struggled to keep up with a surging wave of domestic challengers in recent years -- will also be present.

Volkswagen, which last year lost its crown as the best-selling brand in China to BYD, has moved to prevent a sales slide in its most important market.

The German auto giant announced earlier this month that it would invest 2.5 billion euros ($2.7 billion) to expand a production and innovation hub in the eastern province of Anhui.

It has also invested tens of billions globally in its pivot to EVs, including by taking a minority stake in Chinese automaker XPeng last year.

- Rapid growth abroad -

Nio -- a Shanghai-based manufacturer of premium EVs -- will also be at the auto show, hoping it can breathe new life into its business with the unveiling of a 2024 lineup of eight models.

A fresh entrant to the fierce electric market is Xiaomi, a consumer tech giant that last month launched its first EV model, with CEO Lei Jun saying he was putting his "reputation on the line".

Initial signs are positive: Lei said during a livestream last week that sales of its SU7 had been three to five times higher than expected.

The show also comes in the face of an intensifying price war between EV companies, made all the more competitive as consumer spending slows in China.

On Monday, Beijing-based Li Auto slashed the prices of its models by up to 30,000 yuan ($4,141).

That followed a decision by Tesla in China to lower its prices by 14,000 yuan.

And as competition turbo-charges in China, the rapid expansion of its EV production has raised eyebrows in the West, where regulators fret that an oversupply of cheap Chinese vehicles could outprice local competitors.

Beijing has labelled foreign concerns of overcapacity "groundless", insisting that the success of its EV sector is down to innovation and advanced supply chains, not subsidies.

But it had long given EV firms a boost, funnelling generous amounts of state cash towards domestic manufacturers and offering purchasing discounts in a bid to spur growth and speed up the shift towards clean-energy cars.

Those central government retail subsidies were phased out in late 2022.

But as firms push aggressively into countries across Europe, Southeast Asia and Latin America, they are increasingly under the spotlight.

The European Union launched an investigation last year into Chinese state EV subsidies, which it said had given companies from the country an "unfair" leg up in the local market.

The probe coincides with reports of Chinese vehicles piling up at European ports, as logistics networks struggle to cope with the surge and local consumers are slow to buy them.

Those headwinds haven't stopped BYD from launching a future EV factory in Hungary, making it the first Chinese firm to manufacture passenger cars in Europe.

And last week, state-owned Chery signed a deal to produce mainly electric vehicles in Spain.

China drives both EV production and sales—but the fate of the country’s EV brands could soon be in the hands of emerging markets like Thailand

China is the center of the global EV market. More than half of all EVs sold last year were produced by Chinese companies, according to a recent report from the International Energy Agency. Sixty percent of all EV sales in 2023 were in China.

Yet China’s EV success could be running out of room to grow. Automakers in China are already engaging in price wars to boost sales—and a protectionist backlash in Europe and the U.S. (as well as consumer preference for hybrids) could close off those markets to Chinese cars.

That may put the fate of China’s EV brands partly in the hands of economies in Southeast Asia and Latin America, according to the IEA’s recent report. While sales in developing economies still lag China, Europe, and the U.S., growth is accelerating in economies like Thailand and Vietnam.

Thailand in particular could be an opportunity for Chinese carmakers. The Thai government has introduced a series of incentives such as subsidies and lower import taxes in a bid to boost EV adoption, and that has already attracted Chinese EV manufacturers like BYD and Great Wall Motor to set up facilities in the country.

Chinese-owned EV brands, which tend to sell cheaper models than their non-Chinese counterparts, doubled their market share in Thailand last year. Collectively, they have 11% of the Thai market, according to figures released by Toyota’s Thai subsidiary in February.

In a Bloomberg interview earlier this year, the president of the Electric Vehicle Association of Thailand forecast that EVs will account for 20% of all vehicle registration in Thailand this year.

Indonesia is also trying to boost EV adoption, though its EV market is still small. Only 2% of its auto sales last year were EVs, according to the IEA. Outgoing president Joko Widodo previously set a target for EVs to make up 20% of all Indonesian car sales by 2025. Chinese brands like BYD and Chery, as well as Vietnam’s VinFast, currently sell in the country.

Despite concerns from automakers about slowing EV sales, the IEA is upbeat on the EV market’s prospects for 2024. The international agency predicts that EV sales could hit 17 million units this year, or over one in five of all cars sold.

Tesla just said it's going to launch cheaper EVs sooner than expected

  • Tesla says cheaper models are coming sooner than they'd planned.

  • The news comes as the carmaker announced Q1 results and noted global EV sales are under pressure.

  • CEO Elon Musk has long promised the launch of a $25,000 Tesla.

Tesla is pivoting its plan for vehicle production amid a steep revenue drop in the first quarter of 2024.

The electric vehicle maker said Tuesday it will be launching "new and more affordable products" ahead of its previous timeline, which had predicted production to start in the second half of 2025.

To make the process move along faster, the new EVs "will be able to be produced on the same manufacturing lines as our current vehicle line-up," it said.

"Ultimately, we are focused on profitable growth, including by leveraging existing factories and production lines to introduce new and more affordable products," the company said.

Tesla's revenue slumped 9% year-over-year in Q1 — the steepest drop since 2012. Deliveries of its vehicles fell 9%, far faster than its 2% drop in production.

"Global EV sales continue to be under pressure," it also said today.

In recent weeks, Tesla has slashed the prices of the Model S, X, and Y in the US and China. It has faced stiff competition from Chinese automakers who also slashed vehicle prices.

Since 2020, Musk has claimed that a $25,000 EV is attainable in the near future. It has also launched the Cybertruck —with a retail price that can reach six figures.

The company is also turning to job cuts. CEO Elon Musk told staff earlier in April that Tesla plans to slash more than 10% of its workforce.

Cybertruck’s latest design fail looks like the beginning of the end

 A photo of Tesla's Cybertruck.

Call me cynical, but I think the Cybertruck has seemed destined to flop since its conception. From the early ever-extending release date to Elon Musk smashing the armour-glass windows while 'demonstrating' the vehicle's strength, it's been an endless tale of Cybertruck fails. But what started as trivial has now become a dangerous issue.

Due to a defect with the truck's accelerator pedal, thousands of vehicles have been recalled, marking a painful blow to Tesla's stock (and credibility). This isn't even the first product recall in recent months, as in February Tesla was forced to recall all of its cars over a dangerous font mishap. With the Cybertruck's mounting issues, it's starting to look like the beginning of the end.

According to a report by the National Highway Traffic Safety Administration. the faulty acceleration was the result of an "unapproved lubricant" that caused the pedal to slip, keeping it stuck at full speed. Now 3,878 happy Cybertruck customers will have the delight of lugging their potential death traps to their closest dealership to fix the issue.

We've seen an array of problems with the Cybertruck, from rusty exteriors to frunk (front trunk) faux pas, but most have been laughable cosmetic issues that were worthy of mild annoyance from owners and collective amusement for the internet. In a dramatic switch from frivolous to perilous, the Cybertruck has become a self-fulfilling prophecy of failure and this latest flaw feels like the final nail in the coffin.

Cybertruck
Cybertruck

If you're after more Tesla news, check out the early Cybertruck sketches that show how the design could've looked very different. For some more practical car design inspiration, take a look at how Lexus's "human-centric" design has evolved.

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