Chinese EV market gets a major push from Xiaomi, BYD reigns supreme as Tesla continues to struggle

Xiaomi’s stock soared by as much as 16 per cent on early morning Tuesday after the company’s new electric vehicle attracted significant interest, despite predictions from a brokerage that Xiaomi could lose nearly $10,000 per car this year.

The stock reached its highest level since January 2022 on the first day of trading following the launch of Xiaomi’s debut car, which takes design cues from Porsche. Although it later eased its gains to close 9 per cent higher, Xiaomi’s market value increased by $4 billion.

During peak trading, Xiaomi reached a valuation of $55 billion, surpassing traditional US automakers General Motors and Ford, valued at $52 billion and $53 billion, respectively.

More from Tech

How ChatGPT is becoming everyone’s BFF and why that’s dangerous America ready for self-driving cars, but it has a legal problem

Xiaomi’s SU7, also known as Speed Ultra 7, enters a competitive Chinese EV market with an attractive price tag of under $30,000 for the base model, making it cheaper than Tesla’s Model 3 in China.

Analysts have noted that Xiaomi, with its deeper pockets and expertise in smartphones, may have an advantage over most EV startups. Xiaomi has already received robust pre-orders for its sedan, indicating strong demand and potential wait times of four to seven months for buyers.

The company has produced 5,000 SU7 vehicles, named the “Founder’s Edition,” with additional accessories for early buyers.

Xiaomi’s CEO, Lei Jun, announced on social media that deliveries of the first batch of SU7 vehicles would begin across 28 Chinese cities. Despite expectations of losses on the SU7, Xiaomi remains optimistic about its venture into EVs, pledging to invest $10 billion in the auto business.

Impact Shorts

More Shorts

America ready for self-driving cars, but it has a legal problem

Alibaba, Baidu begin using own AI chips as China shifts away from US tech amid Nvidia row

However, some analysts predict substantial losses, estimating a potential net loss of 4.1 billion yuan ($566.82 million) based on projected sales volume.

Following the SU7 launch, other Chinese EV brands announced price cuts and subsidies. Xiaomi has requested suppliers to increase the SU7’s monthly production capacity to meet surging demand.

Meanwhile, Chinese carmaker BYD reported a 13 per cent year-over-year increase in “new-energy” vehicle sales, contrasting with declining expectations for Tesla’s first-quarter vehicle deliveries amid reports of production cutbacks in Shanghai.

(With inputs from agencies)