As Apple Tosses Away EV Plans, Chinese Smartphone Titans Rev Up To Dominate Space

The electric vehicle (EV) market is witnessing a shift in momentum as Apple Inc. AAPL scales back its EV plans, while Chinese smartphone companies are accelerating theirs, potentially reshaping the high-end EV landscape.

What Happened: Apple has put a damper on its electric vehicle (EV) ambitions, while Chinese smartphone companies are aggressively moving forward, with Xiaomi making a significant entry into the EV market, The Wall Street Journal reported on Wednesday.

Smartphone manufacturers, with their software and supply chain prowess, may possess an advantage in the burgeoning “computers on wheels” market. Despite facing tough pricing competition in China’s crowded EV market, Xiaomi’s shares saw a 9% increase after the announcement, indicating investor confidence.

Xiaomi Corp. XIACF, a Chinese phone manufacturer, unveiled its first EV, the SU7 sedan, last Thursday. Within the first 24 hours, the company received nearly 90,000 refundable orders. The SU7, priced around $30,000, undercuts a Tesla Model 3 in China by about $4,000.

Alongside Xiaomi, Huawei is also making inroads into the EV sector through partnerships and its “Huawei Inside” technology initiative. Xiaomi has set up its own EV production facility in Beijing, in partnership with state-owned automaker BAIC.

Xiaomi’s reputation for providing quality electronics at competitive prices could bode well for its automotive ventures. However, the company is aware of the substantial challenges it faces, including the need for significant capital investment and extensive research and development.

Despite the obstacles, Xiaomi and other Chinese tech giants are strategically positioning themselves in the EV market, preparing for a pricing war with wide-ranging economic and political consequences.

Why It Matters: The shift in focus from Apple towards other ventures, such as home robotics, after stepping back from its EV project, has opened the door for other players to fill the void. Apple’s challenges in the EV space have been well-documented, with an analyst pointing out the headwinds faced by the company in China, including smartphone sales. Furthermore, the discontinuation of Apple’s car design has led to speculation about the potential impact of its EVs had they come to fruition.

Apple’s recent pivot to home robotics suggests a strategic redirection to explore new technological frontiers, leaving a gap in the EV market. This gap is now being eyed by Chinese tech firms like Xiaomi and Huawei, who are leveraging their existing expertise to make a mark in the EV industry.

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