From Smartphones to Smart EVs: How Lei Jun Makes Big Bets
The strategic mindset behind Xiaomi's most consequential moves
Twice in Xiaomi’s history, Lei Jun made company-defining decisions: first, to enter the smartphone market in 2010; then, in 2021, to invest $10 billion over a decade in electric vehicles. Neither decision was impulsive. Both were driven by deep convictions about timing, capability, and user value. More importantly, both followed the same strategic logic that defines the Xiaomi Methodology: user-centric thinking, long-term commitment, and ruthless efficiency.
This post unpacks how and why Lei Jun made these two high-stakes calls, and what they reveal about how to bet big while staying grounded.
I. The Smartphone Gamble: Starting Without a Factory
In 2010, China’s mobile market was dominated by global giants and local OEMs. Xiaomi had no factory, no supply chain, no physical prototype—just a software team and a founder with a vision. Lei Jun believed deeply that the product development model of the internet—iteration, speed, and user engagement—could be applied to hardware.
So Xiaomi began not with a phone, but with software: the MIUI operating system. Its first version focused only on four core functions: call, SMS, contacts, and home screen. Early adopters (recruited through forums) flashed MIUI onto their own devices. Lei Jun called this the “community-first” approach, using user feedback to shape product direction before a device even existed.
“Modify, modify, modify—then modify again.”
By 2011, Xiaomi launched the Mi 1 smartphone, priced at 1999 RMB, with specs rivaling flagship models that cost more than twice as much. They sold over 300,000 units in just 22 hours—with no traditional advertising.
Why it worked:
Timing: Android was rapidly growing, but Chinese users lacked optimized devices
Positioning: “Better than iPhone, at half the price”—Lei Jun’s framing became legendary
Cost-performance: Xiaomi prioritized flagship performance with disruptive pricing
Distribution: Online-only sales model cut out middlemen and inflated retail margins
By 2014, Xiaomi became China’s #1 smartphone brand and ranked among the top 3 globally with over 60 million units shipped.
“We sold smartphones the way people sold software on the internet.”
II. The EV Commitment: $10B and a 10-Year Horizon
In 2021, Lei Jun announced Xiaomi’s formal entry into the EV space, pledging an initial $10 billion investment over 10 years. It wasn’t a diversification experiment. He made it clear: this was Xiaomi’s next long game.
“This is the last major entrepreneurial project of my life. I am all-in.”
Why EVs?
Smartphones had reached saturation. Growth in units was flattening globally.
EVs were becoming “computers on wheels”—a natural extension of Xiaomi’s tech and ecosystem.
China's EV market was hitting a strategic inflection point: strong government backing, maturing supply chains, and growing consumer acceptance.
Lei Jun reflected that he was inspired by Steve Jobs and Elon Musk, but more importantly by the success of Xiaomi’s own ecosystem in applying internet thinking to hardware.
“If we had missed smartphones, we couldn’t afford to miss EVs.”
In 2024, Xiaomi launched its first model, the Xiaomi SU7, with the following key specs:
800V platform with a 0–100 km/h time of 2.78 seconds
Range exceeding 700 km
Deep MIUI and ecosystem integration
Starting price under 215,900 RMB (~$30,000)
Why it may work:
Xiaomi already has 600 million+ active users across its ecosystem
The brand is associated with high-value, high-performance design
They own key capabilities: OS, smart home integration, e-commerce distribution, and fan community
As Lei Jun described it, the car will not be a standalone product but part of a larger “smart life” platform.
III. How Lei Jun Makes These Calls
Whether it’s phones or EVs, Lei Jun follows a rigorous decision model:
Wait for the strategic window
Smartphones: 2010–2011 was the moment Android opened the market
EVs: By 2020, costs fell, platforms matured, and users shifted expectations
Only enter when you can lead with user value
Phone: clear price-performance advantage, online-only distribution
EV: smart integration, better OS, beautiful design, honest pricing
Go all-in with a 10-year mindset
$10B investment wasn’t a marketing headline. It came with Lei Jun personally leading the initiative and relocating his office to the EV division.
Design from first principles around the user
Don’t build for feature parity. Build for user flow. Xiaomi avoided screen overload on its first smart band to keep battery life top-tier. That same thinking informs their EV interface today.
Conclusion: Betting Big with Discipline
It’s easy to admire big entrepreneurial bets in hindsight. But Lei Jun’s genius lies in how he de-risks them in real time. He doesn’t just spot the wave—he studies the curve, builds internal conviction, and then commits fully with a systems-level plan.
The takeaway isn’t just to be bold. It’s to build in a way that makes boldness rational:
Know your user better than anyone else
Earn trust before monetization
Align product, brand, and org around one clear idea
“A startup only gets one shot. If we can’t win with one product, we won’t win with ten.”
That’s the spirit behind every major move Lei Jun has made—and why Xiaomi remains one of the most strategically disciplined tech companies in the world.
Recommended Strategy Books
Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, by W. Chan Kim et al. 2014
Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance, by Felix Oberholzer-Gee 2021
Good Strategy Bad Strategy: The Difference and Why It Matters, by Richard Rumelt 2011