China’s Xiaomi said on Tuesday it will start shipping its first electric vehicle (EV) model SU7 this month, entering the world’s biggest auto market amid a brutal price war.

The smartphone maker, China’s fifth-largest, said in a Weibo post that it has 59 stores in 29 cities across the country that will be accepting orders. A launch event is scheduled for March 28, when the new EV’s sticker is expected to be announced.

Shares of Xiaomi rose 7% in morning trading.

Electric car sales in China rose 18% in January-February, not far off the 21% growth seen for the whole of 2023. This year we’ve seen a round of deeper price cuts, led by market leader BYD , to woo consumers amid weakening domestic demand.

At the unveiling of the Speed ​​Ultra 7 (SU7) sedan in December, CEO Lei Jun said Xiaomi plans to become one of the world’s top five automakers.

The SU7, touted by Leigh, has “super electric motor” technology capable of delivering acceleration speeds faster than Tesla and Porsche electric cars.

Analysts say the car’s shared operating system with Xiaomi’s popular phones and other electronic devices will appeal to the company’s existing customers.

Xiaomi is looking to diversify beyond its core business into electric cars amid stagnant smartphone demand, a plan it first hinted at in 2021.

Its cars will be produced by a division of state-owned automaker BAIC Group at a factory in Beijing with an annual capacity of 200,000 cars.

The smartphone giant has pledged to invest $10 billion in cars over a decade and is one of the few new players in China’s electric car market to win the approval of authorities reluctant to add to the supply glut.

© Thomson Reuters 2024

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