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Cellphone maker Xiaomi has EV market buzzing

Updated: May 23, 2024 By LI FUSHENG China Daily Print
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Under the influencers

Yet Xiaomi has something that established carmakers are eager to learn — how to garner online traffic, which has become crucial when social media is part of everyone's life and as competition intensifies with an influx of new vehicle models.

At the Beijing auto show, Xiaomi and its CEO Lei were both wildly popular, despite the brand debuting at the event.

Although it only had one model, Xiaomi's booth was the most crowded. Lei was always followed by a large swarm of social media content creators as he visited other brands' booths to shake hands and exchange pleasantries.

His supporters even waited outside the men's restroom when he went to answer the call of nature.

Wei Jianjun, chairman of China's largest sport utility vehicle maker Great Wall Motor, is one of the automotive bosses trying to boost his profile on social media.

He made his first appearance in a livestreaming event just days after the Xiaomi launch in March.

People close to the project said Wei himself proposed the idea, saying that he wants to become "an online influencer". Prior to that, Wei had avoided interviews for years.

At a livestreamed company event in May, Wei said he realized that publicity should be "done in the way it is done now", to exchange ideas with fans and car owners online. "I am still working to get the hang of social media, but I will try to become a 'quality' influencer. We will not do things that attract traffic, but not quality (orders)," he said.

William Li, founder and CEO of startup Nio, admitted the way Xiaomi is doing business is creating pressure for its rivals, but the competitive environment is prompting him to make changes.

"Previously, I seldom used social media. But now what can I do? I make short videos otherwise they don't know who I am."

He acknowledged that the huge online traffic generated by Xiaomi and Lei had put a bigger spotlight on electric vehicles in general, which was good for all companies in the sector.

Charging ahead

Electric vehicles are gaining momentum in China, which has been the world's largest electric vehicle manufacturer and market since it overtook the United States in 2015.

A total of 2.94 million electric vehicles, including plug-in hybrids and battery-only vehicles, were sold in the first four months of this year, according to the China Association of Automobile Manufacturers.

The figure is expected to reach 11.5 million units this year, up from 9.5 million units the previous year, said the association.

The vast potential is good for the EV sector, but it also means intense competition, said Zhang Yongwei, vice-president and secretary-general of China EV 100, a major auto industry think tank.

The next two years will be very crucial, Zhang said, as companies that may not have the necessary competence will likely exit the market after a shakeout.

He Xiaopeng, chairman of startup Xpeng, said there will not be more than seven major carmakers in China by 2030. Currently, there are dozens in the country.

Smart functions, with autonomous driving features at their core, are proving to be more important as automakers try to differentiate their products from others.

Roy Lu, a Shanghai-based automotive analyst, said Xiaomi is competitive in this aspect, thanks to strong capabilities in consumer electronics, operating systems and AI.

But it will take time for these advantages to come to the fore, and some analysts point to a mismatch between Xiaomi cars and its vast number of phone users, who choose the brand for its "value for money "reputation.

Meanwhile, traditional carmakers are quickly partnering with technology companies to tailor products that appeal to car buyers. Recent examples include the partnership between Toyota and Tencent as well as the one between Nissan and Baidu.

Analysts agree that after the brutal competition is over in two to three years, there will be a surge in electric vehicle sales in China.

Ouyang Minggao, an academician at the Chinese Academy of Sciences, estimates that electric vehicles will account for 70 percent of new car sales in 2030, with their annual deliveries reaching around 20 million units.

Chinese EV brands also have a good chance to win their share of the global market, said Christof Engelskirchen, chief economist of Autovista Group, an automotive data, analytics and industry insights provider.

Their competitive edge is the result of their speed in coming up with new models, technologies and innovation, among other things, Engelskirchen said.

In Europe, Chinese manufacturers should study each destination market carefully as they can be "extremely different", he said.

"There are already so many brands, so many models. So if someone comes with a new product, there must be something new, " he said. "It cannot just be about 'good product, good quality, good price and good design', it is too'me too'," he said.

Engelskirchen was at the Beijing auto show when Xiaomi and Lei received their rock star reception. It seems a "fantastic story" in China but "this type of hype around a brand, I think, will be difficult to replicate in Europe," he said.

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