Chinese Tech Billionaire Lei Jun Launches Electric Vehicles At Cheaper Prices Amid Heavy Competition

Lei Jun, the cofounder of Chinese smartphone giant Xiaomi, said the company’s first electric vehicle, the SU7, will be sold at a starting price of 215,900 yuan ($30,000) during a launch ceremony on Thursday evening that marks the mogul’s official entry into China’s hotly contested market.

The tech tycoon, whose fortune is currently estimated at $12.4 billion on Forbes’ Real-Time Billionaires list, also unveiled two other models that Xiaomi plans to sell at higher prices. The SU7 Pro, which promises to deliver an extended driving range of 830 kilometers versus the base model’s range of 700 kilometers, has been priced at $34,000. And the SU7 Max that’s said to rival Porsche’s Taycan sportscar in terms of its performance will sell for $41,000. Xiaomi will begin delivering the vehicles towards the end of April, Lei said.

“To make a good car, we spared no cost,” said the mogul.

The pricing is relatively cheap when taking into account the features that are being offered, according to Wang Hanyang, a Shanghai-based analyst at research firm 86Research. Xiaomi might be sacrificing profits in the hopes of generating greater demand by offering the EVs at lower prices. Wang estimates that Xiaomi might deliver 80,000 vehicles by the end of the year.

Based on the SU7’s starting price of $30,000, Xiaomi could add at least $2.4 billion in new revenue for 2024, according to Wang’s estimates. By comparison, the company generated $37.5 billion in total sales last year, mostly from smartphones and internet services.

To be sure, the tech entrepreneur, who had previously described Xiaomi’s $10 billion venture into making EVs as his “last major startup project,” is entering into a new market at a difficult time. In the three years since Lei first expressed his ambitions, the Chinese market for EVs has begun showing signs of becoming saturated. Last year, one out of every three cars sold in the country was already a new energy vehicle.

In the beginning of this year, industry momentum softened further amid a weak economy. Not to mention the ongoing price war started by Tesla, which compelled rival car builders like BYD and Xpeng to slash prices across the board. The aggressive discounts have squeezed margins and even led industry leader BYD to miss profit estimates in the final three months of 2023.

Social media users had previously joked that Xiaomi should price its vehicle below 100,000 yuan ($14,000) to make friends with younger consumers, prompting Lei to respond that the company’s car might come across as “a little bit expensive” to them. During Thursday’s event, the mogul acknowledged that he isn’t making any money with the SU7. Lei did, however, reaffirm his commitment to the EV market, saying that he hopes to eventually make a “dream car.”

The mogul also added that he was surprised by Apple’s decision to call off its decade-long effort to build EVs. He thinks every company that continues to be committed to building such cars should be classed as a “hero of the times.”

Similar to Xiaomi’s ceremony in late 2023 when Lei first took the wraps off the SU7, the tech mogul was addressing another packed audience. But this time, he also invited fellow billionaires and competitors including Li Auto’s Li Xiang, Nio’s William Li and Xpeng’s He Xiaopeng, and thanked them for the advice given along the way.