A pivotal decision by the Trump administration to sanction Xiaomi Corp in early 2021 prompted the tech giant to venture into the electric vehicle (EV) market, according to CEO Lei Jun.
Speaking at an annual event in Beijing, Lei revealed that the unexpected sanctions accelerated Xiaomi’s plans to diversify beyond its well-known smartphones and home appliances.
Lei recounted the moment he learned about the sanctions: “I received a phone call from a friend saying that we had been sanctioned. It was like a bolt from the blue.” The sudden move led to an emergency board meeting, where Xiaomi swiftly decided to enter the complex automotive industry. “If it weren’t for the huge impact of the unexpected U.S. sanctions, we would not have rashly entered the complex automotive industry,” Lei added.
Despite the sanctions being overturned in federal court by May 2021, Xiaomi had already set the wheels in motion for its EV project. The company introduced the SU7, a sporty electric vehicle with a starting price below $30,000, designed to compete with brands like Tesla, BMW, Audi, and Mercedes. Lei noted that Xiaomi had declined venture capital funding that would have valued its EV operations at $10 billion.
Xiaomi’s entry into the EV market has been ambitious, with plans to deliver at least 100,000 SU7 EVs this year, aiming for 120,000 sales. This marks a significant increase from the initial target of 76,000 vehicles, reflecting the company’s confidence in its production capacity and market appeal.
The launch event, streamed by over 1.5 million people on WeChat, highlighted Xiaomi’s determination to establish a strong presence in the competitive EV landscape.
Read more on Xiaomi becomes China’s 8th largest electric vehicle start-up after successful SU7 launch
