AsianFin — In a luxury auto market long dominated by foreign brands, two unlikely challengers have emerged from China's smartphone industry.
Huawei and Xiaomi are rewriting the rules of high-end carmaking, outpacing traditional automakers in one of the most competitive price segments: vehicles priced above 500,000 yuan ($69,000).
Huawei-backed AITO's M9 SUV was China's best-selling car in the segment in 2024, while Xiaomi's performance-focused SU7 Ultra sedan followed with monthly sales surpassing 2,000 units for two consecutive months in 2025. It's the first time Chinese brands have cracked the upper-tier luxury space at this scale.
The moves represent a milestone moment for China's homegrown EV industry—especially given that no Chinese car priced over half a million yuan had ever topped the charts before. State-owned Hongqi tried in 1998 with the CA7460, priced in the same range as the Mercedes-Benz S-Class, but failed to gain market traction.
Today, AITO and Xiaomi represent two distinct playbooks: Huawei is doubling down on "tech luxury", with advanced intelligent systems and connectivity; Xiaomi is going all-in on "performance luxury", targeting sports-car-level specs and Nürburgring lap records.
BYD, widely considered a leader in EV technology, has made headlines with megawatt charging, floating-capable SUVs, and high-end components like the blade battery. But so far, its sales haven't kept up in the 500,000+ yuan segment.
The company's luxury push is concentrated in two sub-brands: Denza and Yangwang. While the Yangwang U8 did break the 1,000-unit monthly sales mark when it launched in 2023, BYD has struggled to maintain momentum. Analysts say the group lacks sufficient product coverage in the 500,000–1 million yuan range—where models like the M9 and SU7 Ultra are thriving and where traditional players like BMW and Mercedes-Benz are strong.
"BYD chose to start at the ultra-luxury million-yuan level and work down—a classic trickle-down strategy," one industry analyst said. "But in this case, they may have missed the moment to compete where volume and brand conversion happen."
NIO, another key EV player, once made headlines for its 2017 EP9 supercar, which clocked a record-breaking Nürburgring lap time. But the EP9 was never mass-produced, and subsequent models like the ET and EC series shifted focus toward comfort and minimalist luxury.
"Performance was never embedded in the mass product DNA," said one auto analyst. "The EP9 was a PR win, not a commercial one."
Meanwhile, Zeekr, a Geely-backed EV brand, has also targeted performance luxury but with mixed results. Its high-end Zeekr 001 FR entered too late, arriving over two years after the standard 001 and failing to gain global recognition for its track performance. Limited to 99 units per month, it's been boxed into an awkward niche—not quite mainstream, not quite ultra-luxury.
In contrast, Xiaomi's SU7 Ultra followed a meticulously timed launch strategy: buzz around performance was seeded early, a Nürburgring lap record confirmed months later, and final pricing landed it squarely in the range of mainstream European luxury sedans. The Ultra's price—starting at 529,900 yuan—came in nearly 300,000 yuan lower than expected.
At the core of both brands' breakout success lies two critical assets: product definition and marketing firepower.
Huawei's M9 came loaded with proprietary features like intelligent projection headlights, full-vehicle perception systems, and in-car satellite connectivity—tailored for its positioning as a luxury six-seater family car.
Xiaomi's SU7 Ultra took a different route, packing over 1,500 horsepower and targeting drivers who might otherwise look at BMW M cars or Porsches. It positioned the car as a performance bargain, offering supercar-level dynamics at executive-sedan prices.
"Strong marketing isn't just advertising—it's how you define the product from day one," said an auto investor focused on China's EV sector. "Both Huawei and Xiaomi knew exactly who they were building for."
Both companies also brought a smartphone-era marketing toolkit to the table—leveraging livestreams, social buzz, and product drops more akin to consumer electronics than legacy automakers. The result: broad name recognition even among non-buyers.
Despite the early wins, Huawei and Xiaomi are still in the early innings of their luxury auto plays. Whether they can maintain momentum and grow into global luxury brands—like Mercedes-Benz, BMW, or Porsche—remains to be seen.
For other Chinese EV makers, the message is clear: tech alone isn't enough. Success at the luxury end of the market requires timing, precision positioning, and the kind of brand narrative that resonates beyond spec sheets.
"Xiaomi and Huawei are proving that the rules of the smartphone wars—speed, marketing, and product definition—are starting to dominate the car industry too," one tech analyst noted. "And right now, traditional automakers are still playing catch-up."
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