Xiaomi CEO Lei Jun said that Tesla has the unique advantage of being able to raise the prices of its electric vehicles, a move that other companies cannot pull off because they are risking “huge losses.”

Xiaomi is set to launch its first EV, the SU7, in about a week. It will start at around $36,948, or 266,000 RMB. Its top trim will be priced at $46,671, or 336,000 RMB.

Xiaomi’s SU7 is priced high compared to many other EVs in the Chinese market.

However, Jun said Tesla holds a distinct advantage over its competitors. While other companies are able to offer cheap and affordable EVs, new companies are placed in a strange spot as they risk being undercut and outsold by established names on the block.

Tesla, on the other hand, has a strong reputation for building quality EVs that are supported by a strong charging infrastructure. With Tesla’s plans to hike Model Y pricing, Jun believes the company is able to handle a higher price and get away with it because they won’t take “huge losses” like other automakers.

Tesla to increase Model Y price in the U.S. next month

“Tesla is so cool, truly impressed,” Jun said on Weibo, according to CnEV Post. “With the current pure electric vehicles, except for Tesla, many of them are making huge losses.”

“The current EV market is so competitive, that only Tesla dares to raise prices,” he said.

Although Tesla is not the best-selling EV company in China, it still has a strong presence in the country, and it has the best-selling car in the world in the Model Y, outpacing the sales of any electric or gas-powered vehicle globally.

Tesla’s ability to manipulate pricing has put it in a place where it can still remain competitive with the up-and-comers in the EV space.

As for the SU7, Jun believes the vehicle will be highly competitive with the Model 3. He cites better specs, solid materials, and high sourcing costs.

This has put pressure on pricing for its initial rollout, but Jun believes pricing could be adjusted, and this could happen even before the car launches in eight days.

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