This month, China’s Xiaomi will begin delivering its first electric car

Xiaomi (1810.HK), opens new tab announced on Tuesday that it will begin delivering its first electric vehicle (EV) in China this month. This marks the company’s entry into the largest auto market in the world during a period of intense pricing competition.

The fifth-largest smartphone manufacturer in China said on Weibo that orders for its new Speed Ultra 7 (SU7) vehicle will be accepted at 59 of its locations across 29 cities. The public is anticipated to see the new EV’s sticker tag unveiled at a launch ceremony on March 28.

China had a 21% increase in EV sales for the entire year of 2023, with sales rising by 18% in January-February. This year, in an attempt to win over customers despite declining domestic demand, market leader BYD (002594.SZ) opened new tab and initiated a series of steep price cuts.

Xiaomi’s CEO, Lei Jun, declared during the SU7’s December launch that the company aimed to rank among the top five automakers globally.

According to Lei, the SUV’s “super electric motor” technology can accelerate cars faster than Porsche’s and Tesla’s (TSLA.O) EVs.

Analysts predict that the car’s operating system, which is similar to that of Xiaomi’s well-known phones and other electronics, will appeal to the company’s existing customer.

“Xiaomi’s cars are going from zero to one in a very different growth stage and facing very different user expectations compared to when Xiaomi’s smartphones went from zero to one 14 years ago,” Lei wrote on Weibo on Tuesday.

“Xiaomi’s cars need to be different, and the most important aspect is smart technology.”

Xiaomi originally announced its intention to diversify into EVs in 2021, seeing that the market for smartphones is currently stagnate.

A division of the state-owned manufacturer BAIC Group (1958.HK), opens new tab, will make its cars at a factory in Beijing with an annual capacity of 200,000 vehicles.

The company behind smartphones, which has promised to invest $10 billion in cars over the course of ten years, is one of the few new entrants in China’s EV industry to receive approval from authorities, who have been hesitant to add to an already extra of supply.