Chinese tech giant Xiaomi announced on Wednesday the remarkable reception of over 100,000 orders for its inaugural electric vehicle, the SU7.
During a ceremony held in Beijing to commemorate the commencement of deliveries, Xiaomi’s CEO and founder, Lei Jun, hailed the occasion as the dawn of a new era in smart mobility.
“Xiaomi’s car officially debuts, the real revolution in smart cars has officially begun, and China will give birth to a great company like Tesla,” Lei Jun remarked, reflecting the aspirations underlying the SU7’s release.
The initial deliveries stem from a limited batch of 5,000 vehicles, known as the “Founder’s Edition,” tailored with additional accessories for early adopters. Following the recent launch of the SU7, which stands for Speed Ultra 7, Xiaomi cautioned prospective buyers about potential wait times ranging from four to seven months, indicative of robust market demand.
Despite Xiaomi’s shares soaring by up to 16 percent on Tuesday, buoyed by the SU7’s overwhelming appeal, financial forecasts from brokerage firms suggest an impending loss of nearly $10,000 per car for the company this year.
At its peak on Tuesday, Xiaomi boasted a valuation of $55 billion, with its share price reaching HK$17.34, surpassing the market capitalizations of traditional U.S. automakers General Motors and Ford, valued at $52 billion and $53 billion, respectively, Reuters news report said.
A recent Canalys research said the global EV market will grow by 27.1 percent in 2024, hitting 17.5 million units.
The sales of global electric vehicles (EVs) grew 29 percent to 13.7 million units, equating to a penetration rate of 17.1 percent in 2023. China remains the largest EV market, shipping 7.6 million units with 55.5 percent market share in 2023.
Amidst a fiercely competitive Chinese electric vehicle market characterized by aggressive pricing and decelerating demand, Xiaomi’s SU7 emerges with an enticing price point, priced below $30,000 for the base model, undercutting Tesla’s Model 3 in China.
While navigating the complexities of the world’s largest automotive market presents challenges, analysts contend that Xiaomi’s substantial financial resources and expertise derived from its dominance in the smartphone industry confer a competitive advantage, particularly in integrating smart dashboards, a sought-after feature among Chinese consumers.
The enthusiasm surrounding Xiaomi’s foray into electric vehicles materializes the vision articulated by Lei in 2021, when he announced the company’s ambitious venture into the automotive sector, pledging a $10 billion investment as the culminating entrepreneurial endeavor of his career.
It’s worth noting that the bulk of Xiaomi’s $37.5 billion revenue is derived from smartphone sales, underscoring the significance of the SU7’s launch as a strategic diversification initiative for the company.
Baburajan Kizhakedath