The rise of the Chinese EV manufacturers has been astounding, with Chinese EV manufacturers responsible for 70% of global EV production in 2024. Many of the companies leading this charge did not start as car manufacturers, including the largest producer of EVs in the world today, BYD, established in 1995 as a battery manufacturing company, and Geely Auto, founded as a refrigerator parts company in 1986.
In 2024, Xiaomi, one of the biggest smartphone companies in the world, also entered the market, launching its first EV, the SU7. Ford CEO Jim Farley even admitted to driving one, saying that he has been completely humbled by China’s EV progress during his many visits to the country over the last couple of years.
Traditional automakers like Ford and Mercedes-Benz, which have been in the industry for more than a century, have been challenged by these much less established businesses, not because they overlooked the EV opportunity but because they didn’t act quickly enough and didn’t realize that success in traditional automobiles didn’t guarantee success in EVs. Automakers’ historic capabilities (gearboxes, engines, mechanical systems) don’t transfer easily to the EV future, whereas a company like Xiaomi, which had never made combustion engine cars, already had expertise in batteries, software development, and consumer electronics. It only had to build a few more capabilities to enter the EV market.
The challenge is knowing when and how to pivot successfully towards future capabilities without killing the core business. Success in the EV market for a company like Xiaomi, which took just seven months to deliver 100,000 units of its SU7 electric sedan, has come not from any legacy automotive expertise but from strong adjacent capabilities and a fresh go-to-market approach, which sees it market its vehicles in a similar way to the way it markets its smartphones to its loyal customer base.