BEIJING, March 28 (Reuters) - China's Xiaomi ( XIACF )

will launch its highly anticipated electric vehicle (EV) on

Thursday when it will reveal its pricing and start taking

orders, marking the electronics company's entry into the world

of automobiles.

The world's third largest smartphone vendor has only said so

far that its car will be priced below 500,000 yuan

($69,170.64). Models it unveiled in over 70 stores across China

on Monday have drawn comparisons to Porsche's Taycan and

Panamera sports car models.

The launch fulfills an ambition of Xiaomi's ( XIACF ) CEO and founder

Lei Jun, who announced the company's foray into EVs in 2021. He

pledged to invest $10 billion in Xiaomi's ( XIACF ) auto business,

describing it as "the last major entrepreneurship project" of

his life.

Since then, updates on the project, from its manufacturing

partnership with state-owned automaker BAIC Group to the

December showcase of the SU7 - short for Speed Ultra 7 - sedan,

have been feverishly followed in China.

Analysts have been split on whether Xiaomi's ( XIACF ) car project

will succeed. Some say it is a natural extension for Xiaomi ( XIACF ) -

whose rice cookers, air purifiers, and other electronics are

ubiquitous in Chinese homes - allowing it to offer its users a

more seamless digital experience and to collect more data.

In China's digitally oriented car market, "there are no

better companies at knowing how to monetise screens than mobile

device companies", said Bill Russo, CEO of Shanghai-based

advisory firm Automobility.

But, in a departure from the company's image as an

affordable brand, Lei has said the SU7 will be "a bit

expensive".

Some analysts estimated that the car will be priced at

200,000 to 300,000 yuan ($27,668.26 to $41,502.39) or above.

"Can (Chinese consumers) take that leap psychologically from

mass-market, cool, inexpensive consumer products and home

products to premium EV?" asked Tu Le, founder of consultancy

Sino Auto Insights, noting that most of the vehicles sold in

China are below 300,000 yuan.

Xiaomi ( XIACF ) did not immediately respond to a request for comment.

PRICE WAR

Xiaomi's ( XIACF ) SU7 is going on sale at a time when China's auto

market, the world's biggest, is battling challenges on several

fronts, including a price war and a slowing domestic economy

that has sapped demand for cars.

"The current market environment is quite challenging for

newcomers with the top 10 players continuously expanding their

market share," said Gavekal Dragonomics analyst Ernan Cui.

"If Xiaomi ( XIACF ) can't sell at scale in a short time, it's facing

the risk of being a profit dragger for the company for longer."

Working in Xiaomi's ( XIACF ) favor, however, is revenue generated

from other business units, added Le of Sino Auto Insights.

"The risk is that they focus too much on the EV space and

lose focus on the sectors and products that got them there."

Xiaomi ( XIACF ) has deep pockets compared to other EV players, a

Bernstein analysis of 12 companies in January showed. It ranked

Xiaomi ( XIACF ) third, behind Huawei and SAIC, but ahead of

nine automakers including BYD and Xpeng ( XPEV ),

in terms of cash and cash equivalents.

Moreover, analysts say Xiaomi's ( XIACF ) smartphone expertise gives

it an edge over traditional automakers when it comes to smart

cockpits - a feature Chinese consumers prize.

The SU7 uses the company's self-developed Hyper OS as the

operating system that connects EV users to its other devices,

including smartphones.

One version of the sedan comes with a driving range of up to

668 km (415 miles) on a single charge, while the other has a

range of up to 800 km. In comparison, Tesla's Model S

has a range of up to 650 km.

Bernstein analysts said that they believe Xiaomi's ( XIACF ) most

direct competitors will be the likes of XPeng ( XPEV ) and Tesla.

($1 = 7.2285 Chinese yuan renminbi)

(Reporting by Sarah Wu and Yelin Mo in Beijing; Editing by

Brenda Goh and Muralikumar Anantharaman)