Xiaomi plans to enter EV market with new SU7 model

China's Xiaomi (1810.HK, XIACY) is entering the electric vehicle market after investing over $1.5 billion into developing its first EV model, the Xiaomi SU7. The consumer tech manufacturer, known for smartphones and electronics, aims to become a top automaker within 15 to 20 years per CEO Lei Jun's recent statements.

Yahoo Finance Autos Reporter Pras Subramanian analyzes Xiaomi's goal, discussing the SU7's positioning and its similarities to luxury EVs currently on the market.

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Video Transcript

BRAD SMITH: Well, switching gears here, China's Xiaomi is officially entering the heavy populated EV market after spending over $1.4 billion on production. The electronics company is squaring up against the likes of Tesla and Porsche with its first EV model, the Xiaomi SU7. Yahoo Finance senior reporter Pras Subramanian has the details on this one for us. Pras, what do we know? And is it going to perhaps make a dent in the market shares of some of those other behemoths?

PRAS SUBRAMANIAN: You know, when I heard Xiaomi's owner say that he said it matches up to a Porsche, I kind of had a little chuckle. But then I saw the SU7. And it has the-- it looks like it's a clone of a Taycan or a Panamera. You know, I don't want to count out Xiaomi's billionaire owner here, because the car has some impressive stats.

It'll apparently use batteries made by CATL battery cells and packs from BYD. Estimated range of 500 miles. But that's very optimistic there. Will use HyperCasting or good-- or giga casting techniques that Tesla uses. And a sub-3-second 0 to 60 time.

So very impressive stuff here. No launch date or pricing. But you know, like I said, Xiaomi's billionaire owner Lei Jun says he wants the company to be a top automaker in 15 to 20 years. That's a long game right there.

BRIAN SOZZI: Come on, Pras, how many of these realistically can they sell? But more importantly, how many could they make? I mean, you just don't go from being a consumer products company or a electronics company like them, who has had a disappointing IPO relative to when it came public in 2018, and start spending billions of dollars to make cars.

PRAS SUBRAMANIAN: Yeah, I agree. I was trying to find-- trying to find who they might use as a manufacturing partner. And I couldn't. I know they have a battery partner with BYD and CATL. But you really need a manufacturing partner to make a car, right? But like I said, these guys have been making smartphones and devices for a long time. They now make, I think, scooters and bikes. So I think they're just trying to ramp up that manufacturing footprint.

But you're exactly right. This is-- making a car is no joke. It's-- we're talking about 10,000 parts coming together at once. So I kind of have a hard time understanding how they're going to ramp up even in 10 years.

BRIAN SOZZI: Well, Pras, when you get one of these review, please include me in that review. I'd be happy to sit in that front seat, both of us wearing Yahoo Finance vests. Pras Subramanian, senior reporter, good to see you.