Can a smartphone manuf start building cars & challenge Tesla?

A few short years ago Xiaomi was a cell phone maker with zero auto experience. In about 2+ years they've vaulted to become the world's $5 EV car maker. The other guys?

• BYT 4.3 million sold (globally in 2024)

• Tesla 1.8 million

• Geely Group (China) 1.4 million

• SAIC (also China) 1 million

• Volkswagen 750,000 million

• Xiaomi 350,000 estimated in 2025.

Xiaomi is speedrunning building an electric vehicle business

Going first is hard, and scary. You have to forge a path, fixing problems no one else has ever faced, without the ability to ask anyone for help. There’s a reason Google wasn’t the very first search engine and Facebook wasn’t the OG social media platform. It’s almost always easier to build on existing work — and no company is proving that better than Chinese tech giant Xiaomi, with its new electric vehicle business.

SU got a fast car

Before 2021, no one at Xiaomi knew how to make cars. Indeed, going from smartphones to EVs isn’t exactly a logical or easy next step — just ask Apple, which finally gave up on its moonshot car project after a decade.

But when faced with a fresh round of US trade sanctions, execs at Xiaomi ran a scary thought experiment: what would happen to the company if the sanctions killed off its phone business? Xiaomi Auto was founded in September of that year, and now, less than four years on, the company thinks it can deliver 350,000 electric vehicles like its SU7 this fiscal year. That’s a milestone that took Tesla more than a decade, and domestic rival BYD even longer.

Phone down, car up

As yesterday’s earnings report revealed, cars are speeding up to become Xiaomi’s future, as the company — which has a ~15% share of the smartphone market — noted that the global smartphone industry is likely to experience near to zero collective growth this year, while intense price wars continue to chip away at profitability.

Meanwhile, Xiaomi’s smart EVs, AI, and new initiatives segment reached some $3 billion (RMB 21.3 billion) in revenue — finding a swath of middle- to high-income consumers that already love Xiaomi and aren’t swayed by rival BYD’s cheaper EV alternatives. The company is now looking to expand into Europe by 2027.

Being first is nice, but being second (or more like 50th in Xiaomi’s case) doesn't prevent you from catching up quick.