Xiaomi’s €24,000 EV Myth: Why the Price Doesn’t Add Up

Xiaomi’s €24,000 EV Myth: Why the Price Doesn’t Add Up

Can an electric vehicle with spaceship-like design, 0-100 km/h acceleration in 2.78 seconds, and ample range cost just €24,000? This claim has circulated widely regarding Xiaomi’s entry into the automotive market, but the consensus is a firm no. The article that sparked this debate—published by a national outlet and shared sarcastically—mentions no official prices, only speculation. From there to headlines declaring Tesla dead is a leap.

First clarification: Xiaomi does not manufacture the car alone. As noted in discussions, the company provides branding and software, while production is handled by an experienced Chinese manufacturer selling millions of units annually. This changes the narrative: it’s not a startup improvising a vehicle, but a consumer electronics giant outsourcing to an established maker. Yet, skepticism remains high.

Why No One Believes the €24,000 Price Tag

Direct answer: because no new electric car sells at that price in Europe. The most common argument compares it to the Opel Corsa-e, which costs around €35,000. If a standard electric hatchback costs that much, how could a premium model be cheaper? Calculations suggest if the base price in China were €24,000, adding VAT, tariffs, fees, homologation, and logistics would push the European street price to between €45,000 and €60,000.

Some argue it won’t even cost that in China. Rumors cite a base price of €42,000 there, placing it alongside the Tesla Model 3 (selling for ~€25,000 in China) rather than the Model X. Segment confusion is total. A car accelerating like a supercar cannot compete on price with a compact.

The Issue Isn’t the Car: It’s Taxes and Bureaucracy

Consensus here is broad. Spain’s 21% VAT versus China’s 0% for EVs is just the tip of the iceberg. Tariffs, homologation fees, customs costs, and administrative hurdles can double the final price according to various estimates. Conclusion: cheap electric cars won’t sell in Europe while fiscal and regulatory frameworks remain unchanged.

France may already be acting. Reports suggest it introduced a disguised ecological tax to penalize transport from Asia, avoiding the term 'tariff' but increasing product costs equally. Question: How will Japanese and Korean manufacturers, who also don’t produce in Europe, react? Protectionism has its quirks.

Is Tesla the Rival or Is the Problem Elsewhere?

Tesla’s alleged drop due to Xiaomi’s announcement is debunked by data. Tesla fell only 0.3% that day, not the implied $25 billion loss. Narratives of collapse are exaggerated, fueled by anti-Musk sentiment. However, it’s true Tesla manufactures batteries in China and its competitive edge is narrowing.

If the car launched at that price, the real loser wouldn’t be Tesla, but every European brand, including Dacia. Logic: if a car with such equipment and performance sold for €24,000, no traditional brand could compete. But that’s a huge conditional. Early promises of Chinese and Indian cars at €3,000–€5,000 never materialized after fifteen years.

Distrust in Quality and After-Sales Service

Skepticism isn’t just economic. Experienced manufacturers still release models with teething problems. What to expect from a brand that has never built a car? Plus, network issues: dealerships, workshops, parts, financing, brand image. A car isn’t sold just with a spectacular launch; it must be sustained for years.

Comparisons to Dyson, which failed in its automotive attempt, serve as warnings. Financial and technological muscle guarantees nothing. China’s advantage lies elsewhere: state subsidies and labor conditions unthinkable in Europe. This allows selling at a loss to gain market share—a known strategy: enter cheap, raise prices later.

Hydrogen and an Uncertain Future

Amid battery debates, some advocate hydrogen fuel cell electric vehicles as more efficient alternatives. Idea: Europe lost the EV race and should keep combustion engines in the mix instead of banning them by 2035. The EU has reportedly softened this ban, allowing new combustion engines beyond that date.

Core problem: no agreement on winning technology. China dominates the battery chain. Europe legislates. Meanwhile, consumers watch prices that don’t fall.

Ultimately, the question isn’t if Xiaomi can build a good car, but if anyone can buy it at that price. For now, even the original article doesn’t dare confirm it.