Xiaomi’s Aspiration in the Automotive Market
Xiaomi has made its foray into the automotive market over the last few years, but it appears the wait for budget-friendly vehicles may take longer than anticipated, especially in Europe. Unlike its competitive pricing strategy in the smartphone arena, Xiaomi has decided to focus on the higher-end segment of the automobile market.
CEO Lei Jun’s Statements
During a live broadcast on April 17, 2026, Lei Jun, the CEO of Xiaomi, confirmed that the company has no plans to release electric vehicles priced below 100,000 yuan (approximately 12,500 euros). This strategy predominantly targets the Chinese market, where the cost of modern electric vehicle (EV) technology constitutes a significant expense.
While driving a new generation SU7 Pro from Beijing to Shanghai—a journey of 1,265 kilometers with minimal charging stops—Jun shared insights about the brand’s future. By engaging directly with viewers during this autonomy test, he effectively communicated Xiaomi’s roadmap and plans for its automotive division.
Why Xiaomi is Avoiding Budget Models
Jun emphasized that current competitive electric vehicles rely heavily on advanced driving technologies that are costly to implement. Thus, pricing a vehicle below 100,000 yuan would clash with the need for such smart tech, which forms the backbone of today’s electric cars.
Further highlighting the complexities of automotive pricing, Jun noted that the latest version of the SU7 boasts over 100 improvements from its predecessor, leading to increased material costs of nearly 20,000 yuan. However, Xiaomi managed to keep the price increase to around 4,000 yuan. This equation illustrates why entering the low-cost market simply does not make financial sense for the company.
The Direction of Xiaomi’s Product Line
The updated SU7 starts at 219,900 yuan (about 27,500 euros), signaling Xiaomi’s intent to secure its place in the mid- to high-end vehicle category. Future models, such as the SU7 Ultra, YU7 GT, and a premium variant of the SU7, indicate an exciting direction aimed at performance-driven consumers.
Industry Trends and Market Position
Xiaomi is not an outlier in avoiding the entry-level market; other Chinese brands, such as XPeng, have also stated they won’t enter this price segment. XPeng’s president, He Xiaopeng, pointed to tight profit margins and the high investment required for advanced technologies as reasons for their strategy.
Sales Data Insights
Recent sales statistics in China align with the decision to avoid entry-level pricing. Data from CarNewsChina indicates that budget electric vehicles like the Wuling Hongguang Mini EV have experienced a year-on-year drop of nearly 58%, exacerbated by the end of tax incentives. The overall market for sedans and utility vehicles has also seen a decline, falling nearly 20% in March alone. While customer interest may exist, profitability remains elusive.
Future Prospects
Despite the current stance, Lei Jun did hint at a long-term vision where Xiaomi aims to position itself among the five largest car manufacturers globally. Achieving this goal will likely require broadening their price offerings in the future, although it appears that step might still be down the road.