by Impressions of Rivian’s Leader from the Xiaomi SU7
During a recent teardown of the Xiaomi SU7 electric sedan, Rivian CEO RJ Scaringe expressed admiration for its design and technical solutions. He noted that it is a well-integrated and high-quality technological platform. Scaringe even mentioned that if he lived in China, he would personally consider the possibility of purchasing this car.
Ford’s Previous Experience with Xiaomi
A year ago, Ford CEO Jim Farley surprised many by revealing that his daily car is a Xiaomi SU7, secretly imported to the USA. Now, another American automotive leader has joined the discussion of the Chinese electric car that is causing a resonance worldwide.
Results of Rivian’s Analysis
After a detailed teardown of the SU7, Scaringe confirmed that the car is truly impressive in its quality. However, he emphasized that the development and production of a similar vehicle in China significantly differ from analogous processes in the USA. Scaringe remarked:
It is a very well-executed, highly vertically integrated technology platform that is well implemented.
Key Advantage – Affordable Price
One of the most important advantages of the Xiaomi SU7 is its price – starting from 215,900 yuan, which is approximately $30,000. This makes it significantly more affordable than most competitors. However, Scaringe admitted that after disassembling the car, Rivian did not discover any secrets regarding how Xiaomi manages to maintain such low costs. He explained that it’s not about engineering tricks or secret cost-saving methods, but rather about large-scale state support.
Impact of State Support on Competitiveness
Scaringe explained in detail how state aid changes the economic conditions for Chinese manufacturers. He noted that in China, the cost of capital is often zero or even negative, meaning companies receive funding to build factories. Furthermore, lower labor costs further reduce overall expenses. Scaringe said:
When you reduce the cost of capital to zero or below zero and have low labor costs – you can do the calculations and precisely understand how they do it.
Comparison with American Conditions
Unlike Chinese grants, Rivian received a $6.6 billion loan for a new production complex in Georgia. Scaringe emphasized that the direct financing received by manufacturers in China simply does not exist in the USA. He also drew an analogy with “The Wizard of Oz,” noting that there is no magic behind Xiaomi’s success – everything can be analyzed and calculated.
This situation demonstrates how different economic models can impact the development of the automotive industry. Chinese manufacturers like Xiaomi receive significant advantages due to state support, allowing them to offer competitive products at lower prices. At the same time, American companies like Rivian are forced to operate under market financing conditions, which complicates direct competition. This raises the question of how Western manufacturers can adapt to such global challenges while maintaining innovation and efficiency.
