Why Xiaomi electric car $4K cheaper than Tesla’s Model 3


Xiaomi's pricing the SU7 under the Model 3 by $4000 confirms that its strike back against the fully electric car industry that is highly competitive in China. "Xiaomi CEO, Lei Jun, said that selling vehicles at a loss was inevitable at current pricing of 215,900 yuan ($30,408) in China," he added, comparing the model 3 that starts at CNY 245,900 in the country.

Lei Jun claimed that by far the specification of the lower end Xiaomi suv is not inferior to the Model 3, except in two fields where Xiaomi may take three to five years to catch up with Tesla. On top of that, the SU7 gets at least 700 Km of driving range while the Model 3 only gets approximately 606 Km. With such competitive pricing that pursued by Xiaomi, a price war erupts among Chinese electric car makers, and they fight each other in the market.

This price breakup by Xiaomi not only hits buying hearts of car buyers but it also show the kind of contest that engages car providers in price war, which may involve the profit possibilities of companies. With its strong commitment to low-pricing called "aggressive pricing strategy" and electrical capabilities of SU7, the Xiaomi company is expected to create a wave of disruption in the electric car market, China to be more specific. The platforms low cost and good efficiency could look very attractive to a large number of consumers, making difficult the dominance of leaders like Tesla .

Summarily, the choice of Xiaomi to price its electric car at $4000 below Tesla's Model 3 shows a strategic intent of the company to benefit from the ferocious competition that exists in the electric vehicle market in China. A powerful price strategy and the available technology of SU7 helps Xiaomi to behave as a hard-hitter against established players rearranging the layout of the electric car industry.

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