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Xiaomi gives a significant boost to the Chinese EV market, while BYD dominates and Tesla faces challenges
The Chinese EV market, known as one of the most competitive globally, welcomes Xiaomi as a new player. Despite previous speculations, Xiaomi appears to have made a big impact as it competes with Tesla and BYD, two leading players in the EV market.
Xiaomi's shares skyrocketed up to 16% on Tuesday morning following considerable attention towards the company's new electric vehicle. This spike came regardless of a brokerage's forecast that Xiaomi might incur a loss of almost $10,000 per vehicle this year.
The value of the stocks peaked since January 2022 on the initial trading day after the introduction of Xiaomi's first car, which draws design inspiration from Porsche. Although the stock's increase eventually slowed down, ending 9% higher, Xiaomi's market worth rose by $4 billion.
At the height of its trading, Xiaomi's worth rose to $55 billion, exceeding the value of established US car manufacturers General Motors and Ford, which were estimated at $52 billion and $53 billion, respectively.
Xiaomi's SU7, alternatively known as Speed Ultra 7, debuts in the competitive electric vehicle market in China. The base model is priced below $30,000, making it a more affordable option compared to Tesla's Model 3 in the same region.
Experts have observed that Xiaomi could have the upper hand over most electric vehicle startups due to its substantial funds and proficiency in smartphone technology. The company's sedan has garnered substantial early orders, suggesting high interest and possible delays of four to seven months for purchasers.
The firm has manufactured 5,000 SU7 cars, dubbed the "Founder's Edition," and included extra accessories for initial purchasers.
Lei Jun, the CEO of Xiaomi, shared on social media that they would start distributing the initial set of SU7 vehicles across 28 cities in China. Even though there are predictions of losses for the SU7, Xiaomi still maintains a positive outlook on their entry into the electric vehicle industry, committing to pour $10 billion into their automobile segment.
Nonetheless, certain experts anticipate considerable deficits, projecting a possible net loss of 4.1 billion yuan ($566.82 million) based on estimated sales figures.
After the introduction of the SU7, other electric vehicle makers from China declared reductions in prices and financial aids. Xiaomi has asked its suppliers to boost the monthly production of the SU7 to cater to the soaring demand.
In the meantime, BYD, a Chinese automobile manufacturer, announced a 13% annual growth in sales of "new energy" vehicles. This is in stark contrast to the anticipated decrease in Tesla's vehicle deliveries for the first quarter, following rumors of production reduction in Shanghai.
(Sourced from various agencies)
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