The Chinese Gadget Maker Taking on Tesla and Apple

Formerly dismissed as a 'Lego' assembler, Xiaomi is building its reputation as a high-tech manufacturer.

- Gloria Li and Eleanor Olcott

An electric vehicle (EV) factory built by China's largest smartphone maker has become a tourist attraction in Beijing, with visits to the company's plant needing to be booked a month in advance and entry sometimes decided by lottery at peak times.

Xiaomi's loyal fans, styled "mi fen", pack its smart car factory every day to watch the production line churn out a car every 76 seconds.

Tour guides proudly compare the manufacturing processes to those of Tesla, as the Chinese company seeks to emulate its American rival's automated production line and build key EV components in-house.

Although only two models have been launched, the cars rolling off the end of the line are expected to outnumber those sold by Tesla in China in 2026, according to Citic Securities' estimates.

Its new sport utility vehicle (SUV) attracted hundreds of thousands of pre-orders within minutes of its launch in June, while its original sports sedan ranked second in premium car sales in China in the first half, only behind Tesla's Model Y.

The excitement around its cars has helped drive Xiaomi shares almost 200 per cent higher over the past year.

Once an assembler that built its success on suppliers' components, Xiaomi is aiming to reinvent itself as a manufacturing powerhouse.

Xiaomi had humbler ambitions when it was formed just 15 years ago.

Its name is Chinese for millet, with founder Lei Jun saying the company was created in 2010 in the spirit of "millet plus rifles", a reference to Mao Zedong's description of the Communist Party's modest military resources during the civil war.

But in the space of its first three years, it leapfrogged incumbents to become the world's third-largest handset vendor and expanded its product line-up to include everything from rice cookers to robot vacuums.

Despite its early success, critics have consistently drawn attention to its lack of core technologies and over-reliance on suppliers.