Imitation game: Can Big Auto emulate Xiaomi’s EV strategy?

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If the global auto industry wants to survive the next decade, it had better start following that maxim, and fast. Xiaomi’s $5.5 billion share sale in Hong Kong on Tuesday, coming just a few weeks after BYD raised $5.6 billion in the same market, is another warning tremor ahead of the tsunami that’s heading for the world’s legacy carmakers. Those delaying the switch to electric vehicles (EVs) must act quickly, or they will be swamped.

The move will raise funds for Xiaomi to invest in its burgeoning EV business to build on the success of its SU7, a sporty model launched just a year ago that looks like a Porsche Panamera but costs roughly what you’d pay for a Toyota Camry. Like BYD’s announcement of five-minute fast-charging technology last week, it is a sign of a Chinese EV industry at the peak of its powers. It might seem surprising that Xiaomi, of all companies, should be the herald of doom for Big Auto.

For years, the company was treated like a punchline—an Apple imitator whose founder Lei Jun looked like a Steve Jobs cosplayer. It spent much of the 2010s flailing around for a business model selling robot vacuum cleaners, massage guns and rice cookers after Huawei and Oppo squeezed its position in the Chinese smartphone market. All along, Xiaomi was quietly learning Apple’s most profound lesson, one BYD’s rise to dominance recently shows it learnt too: “If you keep your eye on the profit, you’re going to skimp on the product [...] but if you focus on making really great products, then the profits will follow." This quote is most often attributed to Jobs.