As soon as Chinese tech billionaire and Xiaomi (XIACY) founder Lei Jun took the wraps off the world’s first car produced by a smartphone company, automotive enthusiasts knew the source of the design’s inspiration: the Taycan by the 93-year-old German carmaker Porsche.

The Xiaomi SU7, unveiled in December and launched in March, has rocked the world’s biggest car market. Xiaomi had orders for more than 88,000 cars by the end of April. Last month, the company raised its sales target for this year to 120,000 vehicles from 100,000.

Porsche (POAHY), by comparison, suffered a 24 per cent year-on-year decline in first-quarter sales in China to 16,340 cars.

Xiaomi’s stunning debut has highlighted the rapid advance of China’s electric vehicle industry from bygone perceptions of ugly and low-quality models to sleek, high-tech and affordable cars.

Lei Xing, founder of Chinese consultancy AutoXing, said opinions of local industry leader BYD (BYDDY), which now rivals Tesla (TSLA) for the title of world’s biggest EV producer, started to shift about four years ago with its Han saloon. Also in 2019, local start-up Nio (NIO) released its ET concept, which later became the group’s flagship luxury model, in another example of Chinese design progress.

“Styling, proportion, sportiness were different from anything BYD had done before,” said Xing. “Likewise for the Nio ET.”

Since then, China’s EV industry has boomed, and the local industry’s design credibility has made huge strides. The International Energy Agency forecasts that 10.1mn EVs will be sold in China this year, compared with 3.4mn in Europe and 1.7mn in the US.

Tu Le, founder of the Sino Auto Insights consultancy, pointed to Human Horizons’ HiPhi X, a luxury SUV launched in 2020 by a now-struggling Shanghai EV maker, as the “first real-life cyberpunk vehicle that was meant to stand out”.

At the other end of the spectrum, the Wuling Hongguang Mini EV, produced since 2020 by a joint venture involving General Motors (GM) of the US and two Chinese state-owned carmakers, “started a huge trend” for microcars that can be accessorised.

Yet, some experts said the Xiaomi SU7’s unmistakable resemblance to the Porsche design also put the spotlight on the industry’s long-running struggle to find its own identity.

Xiaomi’s first car “very clearly emulates” the Porsche Taycan, said Robert Dooley, a strategist with UK-based advisory Car Design Research. “From a design perspective, it is a wasted opportunity.”

In many elements of car design, including user experience, technology and interiors, some Chinese brands are “leading” their western rivals, said Dooley, yet many still struggle to highlight “their unique qualities of being Chinese”.

“Although they are more technologically advanced in some cases, they are largely trying to emulate a western brand,” he said. “What are our strengths? What does the market know us for positively? How do we deliver upon those things? . . . To me, that is a big challenge which is not being addressed.”

Companies are now hiring more local staff who better understand Chinese consumers. Xiaomi brought in Li Tianyuan, the first Chinese designer hired by BMW (BMWYY), as head of its car design team in 2021, while Chinese employees comprise 90 per cent of Geely’s (GELYF) Shanghai-based design team.

The rise of the country’s EV industry is also enabling the integration of advanced driver assistance and entertainment systems into car designs at a faster pace than the rest of the world.

“Foreign brands’ infotainment systems might not be as good as Chinese EV makers,” said Guo, a 27-year-old car buyer in Beijing who expressed a preference for spacious interiors and luxurious decor. Her favourite brands, Li Auto (LI) and Huawei-backed Aito, are known for their full-size SUV models equipped with huge in-cabin screens and seats with built-in massagers.

Chinese carmakers are increasingly rethinking — and redesigning — interiors around the lifestyles of their local consumers. In many premium models, far greater attention is paid to the layout of the so-called second row, where most business executives sit while they are driven by private chauffeurs.

These efforts follow years of poaching top design talent from the west, including Kris Tomasson, a former Ford (F) and BMW designer who joined Nio in 2015 when it was an ambitious start-up founded by serial entrepreneur William Li.

Tomasson, whose industrial design credits range from the Gulfstream G650 business jet to a Coca-Cola bottle, said Li understood from the beginning that a “strong design DNA” would be critical for the company as it challenged rivals with decades of experience.

“The capabilities have grown here, the talent has grown here, the expertise has grown here. It’s just experience,” he said. “Now they’ve actually gone through the process of designing cars.”

Tomasson added that foreign rivals still underestimated the speed at which Chinese companies could move through the design process, “working almost from the gut” with fewer design iterations.

Stefan Sielaff, who spent 30 years working at European carmakers including Audi, Volkswagen and Bentley, before joining Geely, said the “high demands” of China’s tech-savvy consumers had pushed him to develop increasingly connected and autonomous cars at an unprecedented speed.

“They are very energetic, open to technology and living a fast-paced lifestyle . . . [while] in other parts of the world, people still think a car is [merely] an object which you drive from A to B,” he said.

Zeekr, the Geely brand Sielaff has helped launch, typically takes two years to turn around a new model, shorter than half the development cycles at most of the established European carmakers.

Sielaff attributed the pace to a “low hierarchy” at the company that has helped it respond to recent changes in Chinese consumer tastes, with simplicity and understatement being new watchwords.

“[Western carmakers] have the advantage of a very good name and high value in the eyes of customers,” he said, “but when it comes to reinventing and disrupting themselves, this is also a burden. This is a burden we don’t have.”

Additional reporting by Wenjie Ding in Beijing

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