China’s Xiaomi has introduced a new SUV range called Sky Nomad, stepping up its move into the automotive sector as expansion in its core smartphone business eases.
The new vehicles will be sold as extended-range electric models, a format that combines battery power with a combustion engine used to recharge the system and lengthen driving distance.
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In comments posted on Weibo and cited by Reuters, chief executive Lei Jun described the line, branded Xiaomi Pengcheng in Chinese, as made up of “smart, versatile, spacious” SUVs. His post was accompanied by a preview image of one of the vehicles.
The launch signals a further step in Xiaomi’s vehicle strategy, taking the company beyond purely battery-driven saloons and crossovers and into a larger SUV class that has been brought to prominence by manufacturers such as Li Auto.
The company’s automotive arm has grown into a meaningful contributor to turnover during the past two years, supported by sales of the SU7 saloon and the YU7 crossover, the report said.
Xiaomi entered the vehicle market as it looked for additional income sources at a time when the global smartphone and home appliance industries were showing weaker growth.
That expansion has come with high costs, however, as car production demands substantial capital and typically delivers slimmer margins than Xiaomi’s established businesses.
In the electric vehicle market, Xiaomi has set its sights on Tesla, with its SU7 and YU7 models positioned against the Model 3 and Model Y from the US manufacturer.
Although Xiaomi has built up confirmed demand for its existing models, it is contending with a softer domestic market and, unlike a number of Chinese competitors, has yet to begin overseas shipments.
The company has said Europe is due to be its next vehicle market from next year.
“They (car owners) want their car to be a second home. For them, a car is not merely a means of transport but another moving space,” Lei was quoted as saying.
Separate reports earlier this year said Ford had opened early-stage discussions with Xiaomi over a possible production tie-up in the US.
Ford has also examined the option of establishing a joint venture with Xiaomi to manufacture electric vehicles in the US.
