From Sanctions to Sedans: How Trump’s Trade War Spurred Xiaomi’s Electric Vehicle Ambitions

Coverage: US Measures Prompted Tech Giant's Shift to Electric Vehicles

Former President Donald Trump's disdain for Chinese electric vehicles was well-known, yet the punitive measures his government imposed on China's tech firm Xiaomi in 2021 led to the company's pivot towards manufacturing electric vehicles, according to a statement from CEO Lei Jun at a recent corporate gathering reported on Friday by Reuters.

Renowned primarily for its mobile phones, Xiaomi unveiled its inaugural electric vehicle earlier this year. This venture, according to Lei, was initiated only after discovering that the Trump-led government had added the firm to a list of sanctions in the U.S.

Lei shared that he got a call from a pal informing him about the imposed penalties, which led to Xiaomi hastily organizing a crisis board meeting that same day, initiating their venture into electric vehicles.

Upcoming 2024 Xiaomi SU

Lei expressed that the unforeseen U.S. sanctions significantly influenced their hasty decision to dive into the intricate car-making sector. In a legal battle, Xiaomi contested the 2021 sanctions, and by May secured a court victory overturning them, which would have otherwise limited U.S. investments, as reported by Reuters. However, the sanctions had already prompted the commencement of the Xiaomi SU7 electric sedan's development.

At the close of 2023, the market saw the introduction of the SU7, a contender comparable in size to Tesla's Model S but priced similarly to the more affordable Model 3, with a starting cost of approximately $30,000 exclusive to the Chinese market. This positions the SU7 as a direct competitor not just to Tesla but also to various established Western car manufacturers. Buyers will have a selection of different powertrains and battery configurations, with offerings including a potent 664-horsepower dual-motor setup and the potential to travel up to 600 miles based on China's rather lenient CLTC testing standards.

Upcoming 2024 Xiaomi Model

President Joe Biden has imposed increased tariffs on electric vehicles from China and is endorsing measures to enhance the sale of electric vehicles in the U.S. through investments in charging stations and an updated tax credit for EVs. With Vice President Kamala Harris poised to be the Democratic candidate after Biden's decision not to run in the 2024 presidential race, her position on importing Chinese electric vehicles is somewhat unclear. However, it's expected that her administration's approach would closely align with the current policies.

Trump has pledged to impose a tariff of 100% on cars produced in Mexico, regardless of whether they are electric vehicles (EVs), specifically aiming at vehicles by Chinese firms produced in that country. While he has indicated that Chinese manufacturers can produce EVs in the United States using American workers and materials, Trump's broader approach to electric vehicles appears to favor gasoline-powered cars, at least according to certain viewpoints.

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