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In a strategic move to expand its electric vehicle (EV) portfolio, Chinese tech giant Xiaomi is set to unveil a new mid-to-large SUV, the Kunlun N3, in the last quarter of the year. Unlike its fully electric models, the Kunlun N3 will feature an EREV powertrain, making it a range-extended hybrid SUV [3].
The Kunlun N3 is expected to cater to a different market niche, with a likely three-row seating layout, setting it apart from Xiaomi’s all-electric offerings like the successful YU7. The YU7 has seen remarkable market success, with 240,000 orders in just 18 hours and wait times reaching nearly a year [1][2][5].
Contrary to speculation, Xiaomi’s EREV strategy for the Kunlun N3 does not appear to be a direct response to the underwhelming market performance of Li Auto’s Li Mega MPV. Instead, it seems Xiaomi is expanding its portfolio to cover both fully electric SUVs and range-extender hybrids to compete broadly in the evolving Chinese EV and hybrid market [3].
The Chinese market for luxurious SUVs is increasingly favouring EREV vehicles. It's common for such vehicles to have an EREV powertrain, as seen in models like the YangWang U8, Fang Cheng Bao Bao 5, Li 9, and Aito M9 [4].
Xiaomi’s decision to offer an EREV SUV aligns with market demand for different vehicle types and consumer preferences. The company has previously launched an electric sedan, the SU7, priced at 215,900 yuan (29,900 USD) [6].
The Kunlun N3 is expected to join Xiaomi's lineup, which already includes the SU7 with a base model boasting a 700 km CLTC range and a 73.6 kWh LFP blade battery from BYD [1]. In comparison, the base model of the Tesla Model 3 offers a CLTC range of 606 km with a 60 kWh battery from CATL [2].
Meanwhile, Li Auto has been selling only EREV SUVs and has grown to nearly 400,000 sold cars in China in 2023, with plans to double that number to 800,000 units in 2024 [3]. However, the market acceptance of Li Auto’s Li Mega was disappointing, leading to a lowered 2024 sales target of 560,000 - 640,000 units for the company [3].
With the increasing popularity of SUVs in China and the overcrowded 200-300k yuan sedan segment, Xiaomi’s strategic move to introduce an EREV SUV could prove to be a shrewd decision, aiming to capitalise on the evolving Chinese EV and hybrid market [3].
References: 1. Xiaomi SU7 specifications 2. Tesla Model 3 specifications 3. Xiaomi's EREV SUV strategy 4. EREV SUVs in China 5. Xiaomi YU7 pre-orders 6. Xiaomi SU7 price
The business strategy of Xiaomi in launching the Kunlun N3, an EREV SUV, reflects their aim to compete broadly in the evolving Chinese EV and hybrid market, as seen in the increasing popularity of EREV vehicles in the industry. This move also aligns with the market demand for different vehicle types and consumer preferences, similar to Xiaomi's previous foray into the electric sedan market with the SU7.
In the realm of finance and technology, the shifting trends in the Chinese automobile market, particularly toward EREV vehicles, present potential growth opportunities for companies like Xiaomi, as demonstrated by the successful sales of EREV SUVs by companies such as Li Auto. The energy sector also plays a crucial role, as advancements in battery technology contribute to the development and success of vehicles like the Kunlun N3.
