Xiaomi’s EV Pivot Delivers Its First Payoff

In 2010, Lei JunDealroom has a profile for this one. Try Dealroom →—a veteran of China’s early software scene and former CEO of KingsoftDealroom has a profile for this one. Try Dealroom →—founded Xiaomi with a small team of friends. Their first product wasn’t a phone, but MIUI, a polished Android interface that rapidly gained traction with China’s tech-savvy users. When Xiaomi launched its first phone in 2011, the Mi 1, it stunned the market: premium specs, clean design, and a sub-$320 price tag. Online-only flash sales turned the brand into a cult phenomenon. By 2014, Xiaomi was one of the world’s most valuable startups, heralded as a new face of Chinese innovation.

But by 2015, its meteoric rise slowed. The Chinese smartphone market had matured, and competitors like HuaweiDealroom has a profile for this one. Try Dealroom →, Apple, and BBK GroupDealroom has a profile for this one. Try Dealroom → (Oppo, Vivo) gained ground. Supply chain issues, delays, and a weak offline presence compounded Xiaomi’s challenges. Lei Jun regrouped—scaling retail stores, repositioning the brand upmarket, and expanding a smart device “ecosystem” that offered everything from air purifiers to electric scooters.

Still, nothing tested the company like the shock of January 2021, when the U.S. designated Xiaomi a “Communist Chinese Military Company.” Though the label was overturned in court, it forced Xiaomi to confront its vulnerability. What if it could no longer make smartphones?

That existential threat prompted a 75-day internal study of a new frontier: electric vehicles. The team concluded that EVs, now modular like smartphones, could be Xiaomi’s next leap. In March 2021, Lei Jun announced a $10 billion investment into EVs, calling it the final entrepreneurial bet of his career.

By March 2024, Xiaomi unveiled the SU7, a sleek sedan with design led by a former BMW designer and software deeply integrated via HyperOS. 50,000 orders arrived within 27 minutes. Xiaomi delivered 140,000 units by year’s end, generating $2.1 billion in revenue. EVs now account for over 10% of revenue and are helping reduce the company’s dependence on phones.

The SU7 is more than a car—it’s a bold reinvention. Lei Jun bet that Xiaomi’s formula—user-first software, loyal fans, and tight ecosystem control—could work on four wheels. While Apple retreated from the EV dream, Xiaomi shipped. Whether it scales or stumbles, it stands as one of China’s boldest strategic pivots to date.



Source: Asianometry



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