Carmakers in reverse gear can hardly take on EVs from China

Legacy automakers must give up on combustion engines to compete

- DAVID FICKLING

For a beaten-down European car industry, the news that Xiaomi is on its way must feel like a death knell. The Chinese phone-maker's first electric vehicle (EV), the SU7 sedan, has been a hit in its home market. With the looks of a Porsche Panamera at the price of a Toyota Camry, it earned rave reviews from Jim Farley, CEO of Ford, and sells for as little as $30,000. Xiaomi will start shipping the car to Europe from 2027, its president told investors last week, adding that fans in the UK and Germany are already importing models on the grey market. An SUV-styled companion, the YU7, has been selling out in China.

It's an alarming prospect. European automakers' China businesses have struggled for several years, while EU tariffs seem to have done little to dim the appeal of imported Chinese EVs. Xiaomi is at times worth more than Volkswagen, BMW and Mercedes-Benz put together. So is domestic market-leader BYD.

Is there any hope for the continent that invented the automobile? Well, yes. But the continent's carmakers can't afford any missteps.

The first lesson is Chinese carmakers aren't quite as scary as the hype. With taxes included, the average SU7 in the first half of the year sold for about $40,000. That's pretty close to what you'd pay for a US-built Tesla Model 3, a peer competitor whose base models come in at $35,000 including EV tax credits, and $42,500 without them.