Investment Research Team
Huawei’s Harmony Intelligent Mobility Alliance (HIMA) reintroduced its Luxeed S7 electric vehicle today, following a string of production hurdles that plagued the vehicle’s initial debut.
HIMA, spearheaded by Huawei, stands as a pivotal player in the electric vehicle (EV) market. The revamped Luxeed S7 is now available at a price range of U$34,516 to US$48,333, aligning closely with the newly unveiled Xiaomi SU7.
This move is seen as reigniting the longstanding rivalry between Huawei and Xiaomi, a rivalry that has been previously played out in the fiercely competitive smartphone sector over the past decade.
The Luxeed S7 stands as Huawei’s inaugural venture into the pure EV domain under the HIMA umbrella, while Xiaomi’s SU7 marks the Chinese smartphone maker’s first entry into the EV sector. The performance of their respective EVs will undoubtedly redefine China’s new energy vehicle landscape.
Huawei HIMA’s Luxeed S7 had its initial launch in November 2023 but has faced prolonged production issues. It has now been re-released after five months on the market, indicating that its initial market performance has been less than satisfactory.
The Luxeed S7 initially had a promising outlook, with over 30,000 pre-orders within a month of its debut. However, in the first four months after its launch, the total realized sales of the Luxeed S7 were only 2,297 units, averaging around 500 units per month due to production issues.
It is a stark contrast to the Xiaomi SU7, which started off strong, securing nearly 90,000 orders within 24 hours of its launch. The materialized sales (with the registration of vehicle insurance) of the Xiaomi SU7 between April 1 to 7 is 1,093. Moreover, the buzz surrounding SU7 is still going strong.
The design and technology of the Luxeed S7 are mainly provided by Huawei, while manufacturing is handled by the Chinese carmaker Chery. An executive from Huawei’s Consumer Business Group explained that the Luxeed S7’s initial product quality did not meet the requirements for large-scale production, leading to delays in production due to certain components and software issues.
There have been rumors that the Luxeed S7 project’s difficulties have led to some departure of executives from Chery.
The production capacity issues of the Luxeed S7 persisted until March before gradually easing. On March 15th, Huawei’s Executive Director Yu Chengdong stated that the relocation of factories and chip supply shortages had delayed the mass production and launch of the Luxeed S7, but has begun to normalize in April.
The delivery of the Luxeed S7 in March increased to 3,197 units, exceeding the total delivery volume of the previous four months.
To retain pre-order customers, Huawei HIMA released a compensation plan for delayed delivery of the Luxeed S7. Customers who paid the down payment for their orders between November 28, 2023, and January 15, 2024, will receive cash compensation if the waiting time exceeds 6 weeks.
However, the several months that the Luxeed S7 lost are critical. A large number of new models in the same price range, including the ZEEKR 007, the new version of ZEEKR 001, and the Xiaomi SU7 were launched, engulfing the Luxeed S7 in terms of public attention and sales. The new GEEKR 001, which has been on the market for over a month, has received nearly 40,000 pre-orders.
Today’s reintroduction of the Luxeed S7 includes several updates to the EV. Some models will see price cuts of around US$2,763, making it more competitive with Xiaomi’s SU7.
A top-of-the-line ultra four-wheel-drive flagship version is added to the series, and the battery pack of the base model has been upgraded from 62 kWh to 82 kWh.
One thing to note is that the Luxeed S7 Pro is equipped with Huawei’s ADS Basic Edition – an advanced intelligent driving system. The Huawei ADS Basic Edition adopts a pure visual solution and removes the most expensive hardware, the lidar, to achieve low-cost ADS capabilities.
In order to appease existing users who are unhappy about price drops so soon after the car’s debut, Huawei is providing them with a Huawei MagLink tablet package worth 3,000 yuan and a cash red payout of 10,000 yuan.
Both the Luxeed S7 and Xiaomi SU7 are pure EV emphasizing sporty performance and driving dynamics, with advanced smart driving features as their core selling points.
Huawei and Xiaomi have also brought their respective software advantages from the smartphone industry to their cars. The Xiaomi SU7 can synchronize with Xiaomi smartphones, while the Luxeed S7 can synchronize with Huawei smartphones. Their intelligent cockpits are widely recognized as industry-leading.
The advanced intelligent driving system, Huawei ADS 2.0, has been fully installed in the Luxeed S7, while similar updates for Xiaomi SU7 will have to wait until August of this year.
The battery capacity and official range of the Xiaomi SU7 are higher than those of the Luxeed S7. But Huawei has more offline stores than Xiaomi, and its sales and after-sales service system is also more comprehensive. Furthermore, the four-wheel-drive version of the Xiaomi SU7 is cheaper than the four-wheel-drive version of the Smart Selection S7.
For consumers, the most significant difference between the two is probably the exterior design. The Luxeed S7 is more akin to a typical family sedan, while the Xiaomi SU7 is a standard coupe model targeting young consumers.
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