Chinese smartphone giant Xiaomi's car will mainly target the sub-RMB 200,000 ($30,525) price band, analysts at Pingan Securities said on March 31.

The analysts, Wang Dean and Xu Yong, said that Xiaomi has a significant advantage in building cars and that it is expected to apply its success in the cell phone and smart home industries to building cars.

The analysts said Xiaomi has strong supply chain management and cost control capabilities and will launch a very cost-effective model.

In addition, Xiaomi has a certain brand influence and user base, strong user operation and management capabilities, and a sales model that integrates online and offline.

But technology media 36kr quoted sources close to both sides as saying that Lei Jun, CEO of Xiaomi, and William Li, founder of Nio, reached a consensus at the end of February to "pursue the brand upward".

This means that Xiaomi's car-making position is in line with that of cell phones, creating a high-quality and high-tech experience that makes it difficult to compete in the price range of less than RMB 150,000, according to 36kr.

Whether it's traditional car companies transforming or emerging car-making forces including Nio, Xpeng Motors, and Li Auto, all want to cut through the mid-to-high-end positioning, so Xiaomi is likely to do the same, the report said.

With a $10 billion investment over 10 years, Xiaomi is bound to invest heavily in R&D in hardware and software technology and will pursue a high degree of control in manufacturing, the report said, adding that "the target will obviously not be the low-price market."

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