Lei Jun is starting to take Li Xiang's job.

In 2025, Xiaomi Auto delivered over 410,000 vehicles for the full year. Behind this figure, there were only two models: the SU7 and YU7, both 100% electric.

Among mainstream new energy vehicle makers, this approach is extremely rare. While peers are leveraging extended-range EVs to capture the family market and using multiple brands to cover different price segments, Xiaomi has stayed focused on a single track.

This dynamic ended on July 8.

Xiaomi Auto officially announced its new brand, SkyNomad — "Sky" and "Nomad." The brand states its name embodies the ideas of space and lifestyle. Right after the news broke, Xiaomi Group's stock price surged 10% during intraday trading.

Everyone is talking about extended-range powertrains. But that is only the surface.

What truly happened today is that Lei Jun has finally stopped selling just one model, and started building a full automotive group.

The first target is exactly the golden segment of large family-oriented extended-range SUVs that Li Auto has built its entire business on.

I. A Single Hit Model Cannot Sustain an Entire Automaker

Over the past two years, Xiaomi Auto's profile has been very clear: two breakout models, one technical direction, and one unified playbook.

The first vehicle, the SU7, is an all-electric sedan — the first tech-focused car for young people. From launch to delivery, every resource was mobilized around this single product: R&D, supply chain, marketing, retail stores, launch events, and even Lei Jun's personal public image all served one single goal.

This is a typical path for automotive startups. Li Auto established its market foothold with just the Li Auto ONE, and Tesla built its initial brand recognition with the original Model S.

But now, Xiaomi has unveiled its second brand.

According to media disclosures, SkyNomad will cover multiple mid-to-large extended-range SUVs priced between 200,000 and 450,000 RMB. Its target users, product positioning, technical roadmap, and brand tone barely overlap with the SU7 line.

What does this mean?

It means Xiaomi Auto has officially entered the multi-brand matrix phase.

Every mature automaker has gone through this stage. Volkswagen owns Volkswagen, Audi, Porsche, and Lamborghini. Geely's portfolio includes Geely, Zeekr, Lynk & Co, and Volvo. BYD has taken an even more aggressive approach: its main brand is split into the Dynasty and Ocean product lines, complemented by three independent sub-brands — Denza, Fangchengbao, and Yangwang — creating full coverage across the entire price range from 60,000 to 1.5 million RMB.

Xiaomi, by contrast, only had the SU7 and YU7.

A breakout product can build fame, but it cannot support long-term growth for an automaker. Cars are not smartphones: vehicle replacement cycles are far longer than phone upgrade cycles. The ceiling of an automaker's scale is determined by how many user groups it covers and how many niche segments it occupies.

Today Xiaomi has taken that step.

That is why the capital market reacted so directly. The 10% stock rally reflects that investors have spotted a clear signal: Xiaomi Auto's story is no longer about one hit product — it is now about building a full platform.

II. Why Target Extended-Range SUVs?

When Xiaomi enters the extended-range space, a common question arises: does that mean pure EVs are no longer selling well?

The opposite is true. The SU7 and YU7 have already secured top-tier sales positions among all-electric sedans. The real issue is that the pure electric sedan segment itself is not the largest niche in China's new energy vehicle market.

In 2025, within the domestic hot sales rankings for family new energy SUVs above 250,000 RMB, extended-range models from Li Auto and AITO have long occupied leading positions. Extended-range family SUVs are one of the highest-volume segments in the entire new energy market.

Li Auto's L-series has been a long-standing sales benchmark for family SUVs in the 300,000 RMB price bracket. AITO's M-series, consisting of the M7, M8, and M9, has consistently ranked in the first tier of sales in the 300,000–500,000 RMB premium family new energy SUV segment.

The logic behind this is simple.

Core family travel scenarios in China — weekend getaways, long-distance holiday trips, and daily school runs — correspond to three key demands: ample space, no range anxiety, and high ride comfort. Pure EV charging concerns have not been fully resolved for this user group, especially in tier-3 and tier-4 cities and on long journeys.

The core users of the SU7 and YU7 are 25 to 35 years old, predominantly male, tech enthusiasts who enjoy driving and are willing to pay for strong specs and stylish design.

SkyNomad targets users aged 30 to 45, who already have families and may own a car, and need a vehicle that can carry all their loved ones. They prioritize rear-seat space, smooth ride quality, no long-distance range anxiety, and a sense of safety. These are the primary family vehicles.

The two markets barely overlap.

The SU7 opens the wallets of tech-savvy young people, while SkyNomad aims to occupy the garages of Chinese families. Pure EVs will continue to be developed, but extended-range vehicles will be the high-volume business.

III. Xiaomi Has Reached an Inevitable Crossroads

Looking back at Xiaomi Auto's moves over the past two years, we can see a clear rhythm of change.

From 2024 to the first half of 2025, every action of Xiaomi Auto was centered on one goal: making the SU7 and YU7 breakout hits. From product definition, pricing strategy, production ramp-up, to Lei Jun's test-drive livestreams and the carefully planned communication for every OTA update, everything followed the single-product playbook.

The essence of this phase was proving that Xiaomi could build cars, and that its cross-sector entry was not just a publicity stunt.

The SU7 and YU7 delivered exactly that. Brand recognition was built quickly, and they even raised the overall public attention for the pure electric sedan category.

But after a single product succeeds, what comes next?

The answer is exactly what we see today: evolving from a product company to a platform company.

This path was not invented by Xiaomi. Looking at the leading players in China's new energy industry, almost all of them expanded their brand portfolios aggressively between 2024 and 2025.

NIO launched two new brands, Onvo and Firefly, in 2024, extending its price coverage from the premium NIO brand above 400,000 RMB all the way down to entry-level vehicles priced at 110,000 RMB. Zeekr went public independently in 2024, while Geely had already rolled out its Galaxy new energy product line, further widening the gap between its high-end and mass-market brands.

Every automaker that reaches a certain scale eventually faces the same problem: the growth curve of a single product will inevitably flatten. To sustain overall growth, new user groups and new price segments must be opened up.

Xiaomi has now arrived at that crossroads.

Its timing is very smart. The SU7 and YU7 have already completed the mission of brand building, establishing Xiaomi Auto's reputation for high quality, technological sophistication, and strong value for money. Entering the family SUV market with this existing brand momentum is far easier than launching a completely unknown brand from scratch.

For SkyNomad, Xiaomi's R&D platform, supply chain system, intelligent driving capabilities, and sales network can all be shared with the SU7 and YU7. This means lower marginal costs and stronger economies of scale.

One successful vehicle brings linear growth; one successful platform brings exponential growth.

IV. From Tech Competition to Brand Warfare

From an industry-wide perspective, the core focus of competition in China's new energy vehicle market is shifting.

Over the past five years, what was the central theme of competition?

Technology.

Battery energy density, charging speed, intelligent driving computing power, urban NOA coverage, chassis architecture, motor power — every launch event was a showcase of stacked specs. Consumers were trained to make purchase decisions based on spec sheets.

But starting in 2025, a new change is unfolding: the technology gap is narrowing, while the brand gap is widening.

Top players in urban intelligent driving have all reached a usable level, and the pace of battery technology iteration is slowing down. When everyone has a sufficiently capable technology foundation, the focus of competition naturally shifts.

Where does it shift? To branding.

Li Auto has secured the "dad car" positioning, AITO is associated with Huawei-powered intelligent driving, and Zeekr holds the high-performance pure EV niche.

Over the next few years, the core battle in China's new energy vehicle market will shift from "who has better technology" to "who has broader brand portfolio coverage."

This is very similar to the path the traditional automotive industry took. Toyota did not win because of one single model — it won through full-segment coverage from the Corolla to the Camry to Lexus. Volkswagen did not win with the Golf alone — it built a complete brand ladder from Skoda to Volkswagen to Audi to Porsche.

Today, two distinct strategies are emerging in China's new energy industry:

Strategy 1: One single brand to cover everything. Tesla is the most typical example. Li Auto once stuck to this path, even though internal changes were already brewing.

Strategy 2: Multi-brand portfolio. BYD, Geely, and NIO are already following this path. Today, Xiaomi has officially joined their ranks.

Based on current trends, the second strategy will become the mainstream in the Chinese market.

The reason is simple. China's auto market is enormous and highly stratified. Tech-savvy young people in tier-1 cities and family users in tier-3 and tier-4 cities live in almost two different worlds. If one brand tries to cover everything from 150,000 to 500,000 RMB, from sedans to SUVs to MPVs, and target both young people and large families, the brand's identity will be stretched to breaking point.

A multi-brand approach is pragmatic. Each brand targets a specific user group, delivers a clear value proposition, and offers a precisely tailored product line.

SkyNomad is Xiaomi's first strategic move in this direction.

V. Taking Market Share Is Easy — Winning Mindshare Is Hard

Having discussed the opportunities, let us now look at the challenges.

Some media reports state that SkyNomad will be priced between 200,000 and 450,000 RMB. Within this price bracket, its direct competitors are the Li Auto L6/L7/L8 and the AITO M7/M9.

Lei Jun has chosen the largest market — and also the toughest competitors.

The core difficulty is that family users make purchase decisions in a completely different way than young users.

The success of the SU7 and YU7 relied heavily on Lei Jun's personal influence and the tech-focused narrative of the Xiaomi ecosystem. Young people are willing to buy into a launch event, pay for specs, design, and community belonging. Xiaomi's proven traffic-driving playbook — trending topics, livestreams, social media viral marketing — works perfectly for this demographic.

Family users do not behave that way.

When a 35-year-old father decides to spend 300,000 RMB on a family SUV, he will think through these questions: will three people fit comfortably in the back seat? Is it stable on the highway? How much will it be worth in three years? Is the 4S store nearby? Is maintenance convenient? Will the whole family enjoy the ride?

These demands cannot be satisfied by traffic campaigns and launch events alone.

Li Auto secured its foothold in this market because Li Xiang spent six years building a direct association between Li Auto and family travel. From the Li Auto ONE to the full L-series rollout, every product decision, advertisement, and user story has consistently reinforced one single message: buying a Li Auto means buying a car for your family.

This kind of brand recognition takes time to accumulate.

The core problem Xiaomi faces now is how SkyNomad can build trust in the minds of family users.

Lei Jun's personal influence is a strong card to play. But its conversion rate among family users will not be as high as it is among young tech enthusiasts.

Strong product capabilities will be the foundation. If SkyNomad can match or even exceed Li Auto's standards in space, ride comfort, safety, and reliability, while leveraging Xiaomi's ecosystem advantages to create unique smart features, it will have a real opportunity at the product level.

But catching up at the brand level requires patience. The family-focused mindshare Li Auto built over six years cannot be matched by Xiaomi in just one year. This will be a long battle.

Another non-negligible challenge is distribution.

The sales network for the SU7 and YU7 is primarily concentrated in tier-1 and tier-2 cities, with stores mostly located in shopping malls. This model works well for young users, who can browse and buy cars while out shopping.

But family users have very different car-shopping habits. They prefer dedicated auto malls or traditional 4S stores, where they can bring their whole family for test drives and discuss configurations and financing plans in detail with sales staff. If SkyNomad simply inherits the SU7's distribution strategy, it may find its user reach insufficient.

This means Xiaomi may need to build an entirely new sales system for SkyNomad, covering more cities and opening larger suburban stores that prioritize offline service. This will test both its capital strength and organizational capabilities.

VI. Building One Great Car vs. Running an Entire Automaker

Whether SkyNomad can succeed hinges on a rarely discussed but potentially critical question.

Over the past two years, what role has Lei Jun played at Xiaomi Auto?

The super product manager and the number one brand ambassador.

He personally oversaw product definition, participated in design reviews, and appeared in public-facing communications. Lei Jun could talk for half an hour in a livestream about every tiny detail of the SU7 — the hinge angle of the trunk, the UI animations on the dashboard, the side bolstering of the seats.

This is the most effective playbook for the single-product phase. A CEO with an extreme obsession for quality personally overseeing every detail ensures the first car has no obvious flaws.

But starting now, the limitations of this approach will become increasingly obvious.

When you only sell one car, the CEO can be the chief product manager.

When you have two brands, four or five models, two powertrain architectures, and two completely different user profiles, the CEO must evolve into an organizational leader.

The problems he needs to solve are completely different.

How can internal friction between the two brands be avoided? How should pricing be segmented? How to divert users appropriately? How to allocate R&D resources? How to share the supply chain without creating conflicts? How should the sales teams be managed? How to clearly differentiate the brand tones?

None of these questions can be answered by relying solely on product intuition.

They require organizational design, process management, talent pipeline development, and brand governance — things that do not sound glamorous, but which determine whether a multi-brand automaker can operate successfully.

BYD manages multiple brands effectively thanks to Wang Chuanfu's 20 years of accumulated vertically integrated system and cost control capabilities. Geely allows Zeekr to run independently alongside the core Geely brand thanks to Li Shufu's commitment to independent brand operations and more than a decade of multi-brand management experience.

Does Lei Jun have these capabilities?

To be frank, Xiaomi's smartphone era offers some reference. The dual-brand strategy of Xiaomi and Redmi was indeed successful: Xiaomi focused on the mid-to-premium segment, while Redmi prioritized value for money, and both brands developed at their own pace.

But the complexity of the automotive industry is not comparable to that of smartphones. Developing a single smartphone model costs hundreds of millions of RMB, and replacing a phone costs just a few thousand yuan. Developing a single automotive brand or model easily costs tens of billions of RMB, while the user's cost to switch vehicles ranges from 200,000 to 450,000 RMB — the margin for error is drastically smaller.

This means SkyNomad is ultimately a test of Xiaomi's organizational strength, while product capabilities are the relatively easier part.

Today, Lei Jun's challenge has been upgraded