BEIJING – Chinese language smartphone firm Xiaomi believes it is recognized a client area of interest that can pay up for its upcoming electrical automotive in a fiercely aggressive market.

“We predict it is a good start line for us within the premium section as a result of we’ve already 20 million premium customers in China based mostly on the smartphone,” Xiaomi Group President Weibing Lu advised CNBC forward of the automotive’s worldwide reveal on the Cellular World Congress in Barcelona, which kicks off Monday.

“I believe the preliminary purchases might be very overlapped with the smartphone customers.”

He stated the corporate thought of a variety of value factors, from entry degree to luxurious, for a automotive it is spending $10 billion to develop.

Xiaomi revealed its SU7 electrical automotive in China in late December however has but to announce a selected value. Lu stated a proper launch would come “very quickly” and indicated home deliveries would begin as quickly because the second quarter.

The Beijing-based firm is a market chief within the smartphone business, rating third in international shipments behind Apple and Samsung, based on Canalys. Information from the tech market evaluation agency confirmed that Xiaomi captured about 13% of the worldwide market and shipped 146.4 million telephones in 2023.

The corporate lately has additionally branched out into TVs and residential home equipment, that are smartphone-controllable and sometimes sport a smooth, white design. Most of Xiaomi’s income is from telephones, with just below 30% coming from home equipment and different client merchandise.

Xiaomi has usually been recognized for extra affordably priced merchandise. That is raised doubts about whether or not it may promote an electrical automotive – promoted as a rival to Porsche – in a market the place even established EV giants like BYD are slashing costs.

Lu stated Xiaomi’s strategy relies on ecosystem growth, in addition to a smartphone “premiumization” technique launched in 2020 that has since “achieved superb progress.”

In an earnings name in November, he famous the corporate benchmarked its newest Xiaomi 14 telephone to the iPhone 15 Professional, and claimed the brand new system was “overtaking” Apple‘s, based on a FactSet transcript.

Nevertheless, additionally consuming into Apple’s market share is Huawei, whose standard Mate60 Professional begins at 6,499 yuan ($900), between the worth vary of the Xiaomi 14 Professional and iPhone 15 Professional.

Huawei noticed smartphone shipments within the mainland surge by 47% year-on-year within the fourth quarter, placing it forward of Xiaomi, based on Canalys.

Constructing on its tech capabilities as a telecommunications and smartphone firm, Huawei has swiftly grow to be a participant in China’s electrical automotive market.

The corporate launched the Aito automobile model in late 2021 and sells its HarmonyOS working system and different software program to a number of auto producers. Huawei additionally promotes a few of these vehicles, together with the premium-priced Aito M9 SUV, by exhibiting them in its smartphone shops.

Apple has but to formally enter the electrical automotive market regardless of studies it has been engaged on one. Within the fall, Chinese language startup Nio launched its personal Android smartphone.

Xiaomi launched a brand new working system within the fall known as HyperOS.

It claims the system contains a synthetic intelligence part that may be taught from person habits to mechanically alter linked units, akin to dwelling lighting.

“Sooner or later, we predict it is not [that] we give the instruction to the system however truly [that] the system can perceive your wants and meet your wants proactively,” Lu stated.

The corporate calls the technique “human x automotive x dwelling.”

HyperOS is simply out there on Xiaomi’s 14 telephone proper now. However the system is due for rollout within the coming months to home equipment and the forthcoming automotive, Lu stated.

Spending billions of {dollars} on the ecosystem and the automotive are all a part of Xiaomi’s efforts to outlive in an business the corporate expects will grow to be much more aggressive.

In 10 or 20 years, the electrical automobile market will seemingly be similar to that of smartphones at the moment — with the highest 5 manufacturers holding about 70% of the market, Lu stated. “With out large funds, we do not suppose we will be the ultimate gamers.”

After the primary automotive, the following step for Xiaomi is to construct its personal factories and make the important thing elements in-house, Lu stated.

Xiaomi earlier this month introduced its new smartphone manufacturing facility in Beijing had began operations, with manufacturing capability for greater than 10 million units.

For the SU7 automotive, Chinese language authorities releases presently checklist a subsidiary of state-owned Baic Group because the producer. Xiaomi advised CNBC it did not have public data to share in the intervening time.

Just like an rising variety of Chinese language corporations, Xiaomi is wanting abroad for future progress. For the final six years, between 40% to 50% of the corporate’s income got here from exterior mainland China, primarily Europe and India.

Lu, who joined Xiaomi Group in 2019, can be president of its worldwide enterprise division and stated he spends “lots of time” on the abroad market.

“It will likely be the amplifier of Xiaomi’s enterprise,” he stated, noting the abroad client electronics market is about triple the scale of China’s.

As a part of his journey to Barcelona for MWC, Lu stated he is visiting Paris, together with Africa and the Center East.

He acknowledged the political surroundings makes it tougher for Xiaomi to go international, however stated the corporate can overcome these challenges by increase in-house capabilities and diversifying the enterprise globally and by product.

As for the automotive, Lu declined to specify a timeframe for its abroad launch, however stated it usually takes two to 3 years.