Benzinga - by Anan Ashraf, Benzinga Editor.
The debut of Xiaomi Corporation’s (OTC:XIACF) electric vehicle (EV) in China has ignited a fierce price war, forcing smaller players to cut prices to protect their market share.
What Happened: The launch of Xiaomi’s first EV, the SU7, has led to a price war in the Chinese EV sector, reducing the profit margins of several players in the country, reported South China Morning Post (SCMP) on Sunday.
The SU7 has a starting price of 215,900 yuan (about $29,850), lower than even the Tesla Model 3 in China. The pricier variants of the sedan, called Pro and Max, start at 245,900 ($33,997) and 299,900 yuan ($41,463), respectively.
Since the presales of SU7 began, smaller players have slashed prices on their vehicles, SCMP said. Zeekr cut the price of the entry-level edition of its refreshed Zeekr 007 by 20,000 yuan ($2,765). The vehicle now has a starting price of 209,900 yuan ($29,020)
Nio said that new vehicle buyers opting for its EV to replace a petrol car will receive a subsidy of 10,000 yuan ($1,383). Aito, too, reduced the price of its M7 sport-utility vehicle’s basic edition by 20,000 yuan to 229,800 yuan ($31,771), the report added.
Why It Matters: Xiaomi started taking orders for the car in the last week of March and received over 50,000 orders in less than half an hour. The company started delivering the limited "Founder's edition" of the vehicle last week.
The car was first unveiled in December, with Xiaomi aiming to become one of the world’s top five automakers. During the unveiling event, the CEO compared the vehicle to other sports electric cars like the Porsche Taycan and the Tesla Model S.
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