China's Xiaomi unveils first electric car, plans to become top automaker

Chinese smartphone maker Xiaomi (1810.HK) took the wraps off its first electric vehicle on Thursday and promptly announced it was aiming to become one of the world's top five automakers.

The sedan, dubbed the SU7 with the SU short for Speed Ultra, is a highly anticipated model that Chief Executive Lei Jun touted as having "super electric motor" technology capable of delivering acceleration speeds faster than Tesla (TSLA.O) cars and Porsche's EVs.

But the car - likely to go on sale in several months - is making its debut at a time when China's auto market - the world's largest - is wrestling with a capacity glut and slowing demand that have stoked a bruising price war.

That didn't stop Xiaomi Chief Executive Lei Jun from outlining big ambitions.

"By working hard over the next 15 to 20 years, we will become one of the world's top 5 automakers, striving to lift China's overall automobile industry," he said at the unveiling.

Those plans include building "a dream car comparable to Porsche and Tesla," he added.

The SU7 is also expected to appeal to customers due to its shared operating system with Xiaomi's popular phones and other electronic devices. Its drivers will have seamless access to the company's existing portfolio of mobile apps.

"Xiaomi is a well-established consumer electronics brand with hundreds of millions of 'Mi Fans', or members of its smart device ecosystem," said Bill Russo, CEO of Shanghai-based advisory firm Automobility.

"As such, they have a significant opportunity to break through as the automobile becomes a smart device."

The SU7 will come in two versions - one with a driving range of up to 668 km (415 miles) on a single charge and another with a range of up to 800 km. By comparison, Tesla's Model S has a range of up to 650 km.

Pricing has yet to be announced. Lei said the cost would "indeed be a bit high, but one that will have everyone will think is justified."

Amid one of the coldest Decembers for China on record, the SU7 was also being positioned to appeal to consumers worried about winter. Lei said it had fast-charging capabilities in low temperatures and is equipped with advanced tech allowing it to recognize obstacles under challenging conditions such as falling snow.

The autonomous driving capabilities of Xiaomi cars would be at the forefront of the industry, he also said.

Lei's ambitions failed to boost Xiaomi's share price however with the company's Hong Kong-listed stock giving up earlier gains to finish 0.3% lower.

China's fifth-largest smartphone maker has been seeking to diversify beyond its core business to EVs amid stagnating demand for smartphones - a plan it first flagged in 2021. Other Chinese tech companies that have partnered with automakers to develop EVs include telecoms giant Huawei (HWT.UL) and search engine firm Baidu (9888.HK).

Xiaomi has pledged to invest $10 billion in autos over a decade and is one of the few new players in China's EV market to gain approval from authorities who have been reluctant to add to the supply glut.

Its cars will be produced by a unit of state-owned automaker BAIC Group (1958.HK) in a Beijing factory with an annual capacity of 200,000 vehicles.

In an extremely crowded Chinese EV market, its biggest competition will likely come from BYD (002594.SZ) which commands a one-third share while Tesla has 9%, according to third-quarter figures from Zheshang Securities.

Mai Phuong