From Smartphones to supercars: How Xiaomi is redefining the EV game

A decade or so ago, car buyers cared most about engineering precision and price. That’s how legacy giants like Volkswagen built their empires-offering reliable machines at competitive prices.

But today, the rules of the road are changing. Software, technology, and convenience now drive consumer preferences.

More than 71% of Indian consumers are willing to pay extra for connected car features like traffic updates, safer route suggestions, and predictive maintenance, far higher than 25% in the U.S. and even ahead of 60% in China as per Deloitte 2024 Global Automotive Consumer Study.

And that’s exactly why companies like BYD and Tesla have seen explosive growth-because they’re building not just cars, but connected ecosystems on wheels.

Into this race comes an unexpected contender: Xiaomi-a brand once mocked as a budget smartphone maker.

Xiaomi’s EV journey

Xiaomi's entry into the EV market has been swift, targeted, and comprehensive—far from incremental.

The company has advanced remarkably quickly from its March 2021 announcement to outselling Tesla in China by April 2025. Along the way, it has constructed its own EV factory, created proprietary autonomous driving technology, integrated its trademark HyperOS, and introduced the SU7, one of China's most talked-about vehicles that outsold Tesla there. We are discussing Xiaomi today for this reason.

It demonstrates how a business best known for smartphones and smart TVs is now using tech-first thinking and complete ecosystem integration to redefine the automotive sector.

Source: Company reports, news

Xiaomi EV. Once considered a copycat, now setting records

Back in 2021, when Xiaomi said it would invest $10 billion into building electric cars, many dismissed it saying even Apple could not make it and had to shelve its EV plans. Fast forward to 2024-25, and the company has pulled off something remarkable. Xiaomi outpaced Tesla in sales during April-25.

Xiaomi launched the SU7 sedan in March 2024. Within its first year, it clocked over 240,000 deliveries. Its SUV version, the YU7, hit 240,000 bookings within 24 hours of launch, outpacing the record of their previous SU7 record which garnered 88,898 bookings.

Xiaomi’s SU7 started outselling the Tesla Model 3 in China by the end of 2024. According to data from the China Passenger Car Association

How Xiaomi became successful in EVs despite China’s competition

China’s EV market is intense, with over 140 brands. Most are unprofitable and struggle to differentiate themselves. However, Xiaomi distinguished itself by taking a different approach:

• Constructed an intelligent, fully automated factory in Beijing that produces one car every 76 seconds using assembly lines with over 700 robots. This high degree of automation contributes to speed and quality assurance.

• Initially concentrated on just two models: the YU7 SUV and the SU7 sedan.

• For eight consecutive months, monthly sales above 25,000 units were consistently maintained.

• In March 2025, $5.5 billion was raised to expand EV operations with focus on R&D and technology including manufacturing

• Using inhouse manufacturing instead of outsourcing, as many other EV startups do

• Xiaomi is the “First in China to treat a car like a consumer device” says Wall Street Journal

• In terms of pricing, Xiaomi’s cars are cheaper than Tesla, though costlier than BYD if they compare similar models. While their fully automated factories lowers the cost of operations.

Source: Company reports, news articles

Xiaomi is known for creating products for masses, this is why they are able to capture explosive growth within months after product launches. Two major secret sauces of Xiaomi's success

• CEO Lei Ju’s vision called "Human × Car × Home" aims to build a seamless tech ecosystem that connects your phone, home, and car. Imagine your car automatically adjusting your home's air conditioning as you drive closer, or allowing you to view your home security camera feeds right from the car's central screen.

• Established household brand: Millions of loyal Xiaomi users already own its smartphones, TVs, and air purifiers. Buying a Xiaomi car was just the next step.

• Lower pricing and efficient operations making it different from all other existing players.

Even Apple failed, but Xiaomi cracked it

The copycat that shipped before the original: Xiaomi delivered. Apple stalled. Apple's ambitious but covert Project Titan plan aimed to create an autonomous electric vehicle. After more than ten years and $10 billion, Apple decided to shut it down. Why, then, was Apple unable to do it?

• Auto margins are low, usually ranging from 6% to 12%, which is significantly less than Apple's typical 25%.

• Apple didn't have complete control over the intricate supply chains and manufacturing ecosystem needed to produce cars.

• Apple pursued complete autonomy, which was a risky move.

Xiaomi took a more practical stance. It was already very good at making low-profit, high-quality hardware, such as wearables, TVs, and smartphones. Transitioning to EVs meant entering a capital-intensive space, but it didn’t need to reinvent itself. Instead, Xiaomi focused on creating a powerful, connected, stylish car that could compete on price and performance. Xiaomi’s competitive edge is not automotive-it is digital.

Its cars are connected devices first, and a vehicle second.

• HyperOS integration: Using a single operating system in homes, cars, tablets, and phones. Smartphone Ecosystem Sync: Utilise your Xiaomi phone or smart home panel to operate your SU7. SU7 enables toll payments through phone-car sync, home device control, and Xiaomi AI assistant.

• Lidar, 11 cameras, Nvidia Orin chips, and real-time mapping are all features of the Xiaomi Pilot's in-house autonomous driving software.

• The Smart dashboard features a co-driver display, a 16.1-inch 3K central screen, and full voice assistance.

• In the speed limit, the first Chinese EV, the SU7, outperformed the Porsche Taycan.

• Fast time to market: Only three months separate the unveiling of the prototype from the price and order opening.

• The most costly and important component of an EV is its battery technology. Here, Xiaomi is acting assertively: The SU7/YU7 models of today use 900V CATL Qilin 2.0 batteries.10–80% charge in about 11 minutes.Range: up to 835 km (CLTC standard).

• Battery design: To save space and increase safety, Xiaomi employs a "cell-to-body" (CTB) battery system.

• Proprietary chips: Its new automobile chip, the Xring O1, which is based on a 3nm process, helps to maximise performance and power consumption.

• Prioritising safety Battery Shell: China's most stringent thermal runaway and puncture tests were passed by the "bulletproof" battery shell used in the SU7 Ultra.

As CNBC puts it: “It’s a smartphone on wheels.” , a user says in smart EVs like Xiaomi they don't need to look at phones at all, car tech systems can do what you need to do with a phone in the car.

Financial success

Xiaomi’s EV success is also reflected in its financial numbers: while revenue has grown 10x from 2023 to 2024, its losses have been consistently declining in new businesses. The company has increased its 2025 target to 350,000 EVs. Management now expects Xiaomi to break even by H2 2025.

Source: Company reports, news articles

Even Ford’s CEO Is Impressed

But Xiaomi’s success is not just in sales numbers. It has caught the attention of industry veterans-including Ford CEO Jim Farley. In an episode of the Everything Electric Show podcast (October 2024), Farley shared his surprising experience: “Everyone was talking about the Apple car. But the Xiaomi car, which now exists and it’s fantastic-they sell 10,000, 20,000 a month. They are sold out for six months. That is an industry juggernaut, and [it comes from] a consumer brand that is much stronger than car companies.”

“I don’t like talking about the competition so much,” he added. “But I drive a Xiaomi. We flew one from Shanghai to Chicago, and I’ve been driving it for six months now, and I don’t want to give it up.” When one of America’s top auto executives says he doesn’t want to return a Xiaomi, you know the game has changed.

Challenges ahead

Despite the encouraging trend, Xiaomi still has some significant obstacles to overcome:

• Although early reports suggested driver-related factors rather than system failure, a tragic crash involving an SU7 during assisted driving in March 2025 raised concerns. Since then, in an effort to increase safety, the Chinese government has placed limitations on autonomous system beta testing.

• Long-term battery durability for Xiaomi is still mostly unknown for their particular battery pack and thermal management system, particularly in extremely cold weather where EV range can drop dramatically.

• The EV unit continues to lose money, and cost control and volume scaling are necessary to break even.

• Global expansion is still a ways off. By 2027, Xiaomi intends to join the EU market, which will require it to comply with stringent safety standards like Euro NCAP crash tests, adjust to new charging standards like CCS, and establish brand credibility against well-known European automakers. They will also need to deal with fierce local competition and possible tariffs.

• Additionally, competition is getting more fierce. Companies like Li Auto, BYD, Huawei, and Nio are not doing anything. To remain relevant, Xiaomi must keep coming up with new ideas.

Conclusion

Xiaomi has strategically positioned itself as a high-end-looking, high-performing substitute at a significantly lower cost. Xiaomi's success with EVs is the result of clever execution, not luck:

• Introducing feature-first thinking and speed into the manufacturing of consumer electronics.
• Best-in-class features (record-breaking dynamics, quick charging) at prices comparable to Tesla's.
• Quick expansion through in-built demand, partner manufacturing, and factory innovation.
• Deep integration with its ecosystem of devices, creating a digital experience that is centred on mobility.