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By Sarah Wu
BEIJING (Reuters) – He was known as China’s reply to Steve Jobs for taking Xiaomi (OTC:) from scrappy startup to an electronics large identified for its smartphones.
With the launch of a much-hyped and against-the-odds electrical automotive, Lei Jun, Xiaomi’s co-founder and CEO, is taking over Elon Musk with a method that takes a web page from Tesla (NASDAQ:)’s playbook.
Lei, 54, took the stage in Beijing on Thursday to unveil Xiaomi’s SU7 automotive, a undertaking three years within the making that has attracted a variety of consideration however which, Lei has warned traders, will lose cash.
Throughout Thursday’s two-hour occasion – a livestream hundreds of thousands of Chinese language tuned in to look at – Lei made a jibe at Apple (NASDAQ:) for dropping its automotive undertaking and declared Xiaomi’s EV superior to Tesla’s Mannequin 3.
Followers dubbed the Xiaomi CEO “Thor” on social media, a play on his surname which implies thunder in Chinese language. Some commented that his outfit – a gray blazer over a black t-shirt – appeared like one thing Musk would put on.
Already a family identify in China, Lei’s advertising and marketing technique for his EV borrows immediately from Musk, stated Yale Zhang, managing director at Automotive Foresight.
“One individual equals a complete advertising and marketing crew,” Zhang stated. “With each phrase he says, the eye he attracts on-line is of a special magnitude.”
Born in central China, Lei graduated from Wuhan College with a level in pc science earlier than working his means as much as turn into chief govt of software program agency Kingsoft.
In 2010, he co-founded Xiaomi. By 2014, the tech startup had a valuation of $46 billion.
The Beiijng-based firm has grown with the recognition of its smartphones and residential home equipment, beloved in Chinese language households for his or her affordability and glossy styling.
Final yr, Xiaomi launched costlier smartphones to compete with Apple’s iPhone, however Lei’s resolution to promote a sporty EV that attracts styling cues from Porsche will take a look at the Chinese language firm’s capability to shift to a brand new, premium market.
In 2021, Lei introduced Xiaomi would construct its personal EV, an enterprise he stated then can be “the final main entrepreneurship undertaking” of his life.
“Within the three years of growing this automotive, my largest realization is that making vehicles is extraordinarily tough,” Lei stated on Thursday. “Even an enormous like Apple gave up on it.”
BEIJING BACKING
The SU7 – brief for Pace Extremely 7 – enters a crowded China EV market with an attention-grabbing price ticket, underneath $30,000 for the bottom mannequin, cheaper than Tesla’s Mannequin 3 in China.
Xiaomi constructed a Beijing manufacturing facility able to producing 200,000 vehicles yearly earlier than it had regulatory approval to begin manufacturing in China. State-owned automaker BAIC Group disclosed in November it might make the vehicles for Xiaomi – on the identical Xiaomi plant.
Xiaomi, which plans to promote the SU7 solely in China for now, didn’t instantly reply to a request for remark.
Lei stated with out the help of the Beijing authorities, it might have been “not possible” to finish the automotive in three years, in line with a transcript posted by auto blogger Chang Yan, who was amongst a bunch of Chinese language reporters invited to interview Lei on Thursday.
Musk additionally gained help from the Shanghai authorities when organising the Tesla manufacturing facility there. The development of Tesla’s Shanghai plant took lower than a yr after it broke floor in 2019.
Analysts stay cut up on whether or not Lei’s undertaking will transcend creating buzz to become profitable in a hyper-competitive EV market. “The danger is that they focus an excessive amount of on the EV house and lose give attention to the sectors and merchandise that received them there,” stated Tu Le, founding father of consultancy Sino Auto Insights.
Lei stated he had initially deliberate to promote the high-end model of the SU7 for round $48,500 earlier than reducing that to about $41,500 as different automakers slashed costs.
“Xiaomi has sufficient money reserves to deal with any fierce competitors within the subsequent 5 years. And whether it is potential, Xiaomi will search for methods to build up extra cash,” Lei stated.
Xiaomi stated it had obtained 50,000 orders within the first 27 minutes of the SU7 happening sale. The corporate had not posted an up to date quantity on Friday.
($1 = 7.2277 renminbi)
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