Xiaomi SU7 Ultra are trying to challenge BBA and Porsche to rebuild the pricing rights

Reflecting on corporate history, Lei Jun acknowledged that Xiaomi's 2014 achievement of becoming world's third-largest smartphone vendor obscured underlying challenges. Specifically, the failure to capitalize on Samsung's decline in China and establish premium market presence created disproportionate obstacles for later high-end smartphone initiatives. 

Building on the SU7's unexpected success, Xiaomi decisively pursues premium positioning in 2025. The SU7 Ultra garnered over 10,000 firm orders within two hours of its February 27 release. Priced at 26.5% of the Porsche Taycan Turbo GT's ¥1.998 million tag while delivering superior power (1,548 PS vs 1,304 PS), Xiaomi's value proposition gains market validation. The company redefines "cost-performance" as perceived consumer value rather than mere affordability. 

More valuable

By December 2024, the SU7 series achieved 248,000 firm orders and 135,000 deliveries within nine months of launch. While the base SU7 focuses on volume, the Ultra variant distinguishes itself through extreme performance metrics, intelligent integration capabilities, and disruptive pricing strategy. 

The tri-motor powertrain (V8s+V8s+V6s configuration) delivers 1,548 PS, achieving 0-100km/h in 1.98 seconds and a top speed of 359km/h. Since January 2025, the model has set new lap records at four major Chinese circuits (Zhuzhou, Chengdu, Zhuhai and Shanghai). 

CEO Lei Jun highlighted the SU7 Ultra's record-breaking performance at Shanghai International Circuit, surpassing Porsche Taycan Turbo GT's previous benchmark. 

At the launch event, Xiaomi emphasized localized intelligent driving innovations. The new "Acceleration Error Suppression Assist" prevents unintended acceleration even with pedal misapplication. The battery pack incorporates ballistic-grade underbody protection, enhancing scratch/puncture resistance for extreme condition safety. 

Despite its premium positioning, the SU7 Ultra Standard Edition is priced at ¥529,900 - significantly below pre-sale estimates and undercutting rivals like NIO ET7 (starting at ¥548,000) and Tesla Model S (¥789,900). However, the limited Nürburgring Edition starts at ¥814,900, aligning with original pre-sale pricing. 

Xiaomi enhances perceived value through innovative services. In April, the company plans to launch intelligent driving insurance products with coverage up to ¥3 million, along with the Xiaomi EV Ultra Club membership program (annual fee: ¥3,999, limited to 2,000 founding members) offering exclusive experiences like Nürburgring track tours and official circuit events.

The ecological expansion reshapes the dynamics of product pricing power

In 2024, global sales figures revealed declines for German luxury brands: Mercedes-Benz (2.389 million units, -4% YoY), BMW (2.451 million, -4%), and Audi (1.671 million, -11.8%). Despite global recovery efforts, these manufacturers continue to lose ground in China, with 2024 sales dropping 6.7%, 13.4%, and 9% respectively for Mercedes, BMW, and Audi in the Chinese market. 

As the brand premium traditionally commanded by BBA gradually diminishes, Xiaomi Auto is strategically positioned to redefine product pricing authority. 

Since 2021, Xiaomi Group and Shunwei Capital have collectively invested in nearly 50 automotive supply chain enterprises spanning power batteries, autonomous driving solutions, automotive-grade chips, and lidar technologies. This comprehensive investment portfolio covering upstream, midstream, and downstream sectors empowers Xiaomi to construct a genuine ecosystem chain, thereby strengthening its influence within the industry.

In terms of pricing positioning, the SU7 Ultra directly challenges established benchmarks set by Porsche, Tesla, and German luxury marques (BBA) in performance, technological sophistication, and premium appeal. Enhanced features like UV-resistant glass and illuminated vanity mirrors, already popular among female users in the SU7, have been upgraded to new heights in the Ultra variant, specifically targeting the female consumer segment. 

The Xiaomi SU7 Ultra and its product line are integral components of Xiaomi's ecosystem strategy. Through deep integration of MIUI Car OS and Xiaomi Smart Home systems, users can control household devices from their vehicle or manage car status remotely via smartphones. This ecosystem synergy not only strengthens user engagement but also transforms vehicles into mobile terminals within Xiaomi's IoT ecosystem, creating new traffic portals and data value streams. 

This strategic approach not only enhances user loyalty to the Xiaomi brand but also provides robust support for Xiaomi Auto's market expansion. These developments are reshaping the competitive landscape of the luxury car market, compelling traditional premium brands to reevaluate their pricing strategies. 

In the first two months of 2025, Xiaomi's stock price has accumulated over 50% gains. Industry sources indicate that following the launch of the Xiaomi SU7 Ultra, the release pace of the Xiaomi YU7 will accelerate accordingly. The immediate challenge for Xiaomi Auto lies in production capacity ramp-up, while long-term success will depend on the ability and speed to transform its "Human-Vehicle-Home Integrated Ecosystem" into essential consumer needs.