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 automobile, 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 automobile, a undertaking three years within the making that has attracted lots of consideration however which, Lei has warned traders, will lose cash.
Throughout Thursday’s two-hour occasion – a livestream thousands and thousands of Chinese language tuned in to observe – Lei made a jibe at Apple (NASDAQ:) for dropping its automobile 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 suggests thunder in Chinese language. Some commented that his outfit – a gray blazer over a black t-shirt – regarded 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, mentioned Yale Zhang, managing director at Automotive Foresight.
“One individual equals a whole advertising and marketing workforce,” Zhang mentioned. “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 develop into chief government 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 12 months, Xiaomi launched costlier smartphones to compete with Apple’s iPhone, however Lei’s choice to promote a sporty EV that pulls styling cues from Porsche will check the Chinese language firm’s capacity to shift to a brand new, premium market.
In 2021, Lei introduced Xiaomi would construct its personal EV, an endeavor he mentioned then can be “the final main entrepreneurship undertaking” of his life.
“Within the three years of creating this automobile, my largest realization is that making automobiles is extraordinarily troublesome,” Lei mentioned on Thursday. “Even a large like Apple gave up on it.”
BEIJING BACKING
The SU7 – brief for Velocity Extremely 7 – enters a crowded China EV market with an attention-grabbing price ticket, below $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 automobiles yearly earlier than it had regulatory approval to start out manufacturing in China. State-owned automaker BAIC Group disclosed in November it could make the automobiles for Xiaomi – on the similar Xiaomi plant.
Xiaomi, which plans to promote the SU7 solely in China for now, didn’t instantly reply to a request for remark.
Lei mentioned with out the assist of the Beijing authorities, it could have been “unimaginable” to finish the automobile 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 received assist from the Shanghai authorities when establishing the Tesla manufacturing facility there. The development of Tesla’s Shanghai plant took lower than a 12 months after it broke floor in 2019.
Analysts stay cut up on whether or not Lei’s undertaking will transcend creating buzz to earn money in a hyper-competitive EV market. “The chance is that they focus an excessive amount of on the EV area and lose concentrate on the sectors and merchandise that received them there,” mentioned Tu Le, founding father of consultancy Sino Auto Insights.
Lei mentioned he had initially deliberate to promote the high-end model of the SU7 for round $48,500 earlier than slicing 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 doable, Xiaomi will search for methods to build up more money,” Lei mentioned.
Xiaomi mentioned it had acquired 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)
