Xiaomi Bets Big on New Electric Vehicle, Targets 20 Million Premium Users
Chinese smartphone company Xiaomi believes it has identified a niche in the electric car market, targeting its 20 million premium users. The company plans to launch its electric car soon, with a range of price points. Xiaomi's strategy includes its operating system for connecting the car with its existing products. The company aims to survive in a competitive industry through ecosystem development and expansion into the overseas market.
Xiaomi's Strategy: Targeting Premium Users
Xiaomi believes it's a good move to enter the premium segment of the electric car market because it already has a large user base of 20 million premium users in China through its smartphones. The company expects the initial purchases of its electric car to be from this user base, as there is likely to be overlap.
Xiaomi has considered a range of price points, from entry level to luxury, for its electric car. The company is investing $10 billion in developing the electric car and plans to release it soon, with domestic deliveries starting in the second quarter.
Xiaomi's Approach and Competitors
Xiaomi is known for its affordably priced products, which raises doubts about its ability to sell an electric car in a market where even established giants like BYD are slashing prices. However, Xiaomi's approach is based on ecosystem development and a smartphone "premiumization" strategy that has shown progress.
The company's primary competitors in the electric car market are Huawei and Apple. Huawei, a telecommunications and smartphone company, has entered the electric car market with its Aito vehicle brand and offers its HarmonyOS operating system to auto manufacturers. Apple, on the other hand, has yet to formally enter the electric car market.
Xiaomi's Ecosystem Development and Overseas Expansion
Xiaomi has launched a new operating system called HyperOS, which includes an artificial intelligence component that can adjust connected devices based on user behavior. The company plans to roll out HyperOS to appliances and its electric car in the coming months.
To survive in the competitive industry, Xiaomi is spending billions of dollars on ecosystem development and the electric car. The company also aims to expand its presence in the overseas market, which is about triple the size of China's consumer electronics market.
Xiaomi acknowledges the challenges posed by the political environment in going global, but believes it can overcome them by building in-house capabilities and diversifying its business globally and by product. The company plans to launch its electric car overseas in the next two to three years.
