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Xiaomi boosts China's electric vehicle sector, while BYD dominates and Tesla faces challenges
Xiaomi has entered the highly competitive Chinese electric vehicle market and appears to be performing well, contrary to previous forecasts. This puts Xiaomi in competition with Tesla and BYD, two major players in the electric vehicle industry.
Xiaomi's shares skyrocketed up to 16% in the early hours of Tuesday as their new electric car generated a lot of attention. This happened even though a brokerage firm predicted that Xiaomi might suffer a loss of roughly $10,000 per car this year.
The share value hit its peak since January 2022 on the initial trading day after the introduction of Xiaomi's first car, whose design is inspired by Porsche. Despite later reducing its profits to end 9 per cent up, Xiaomi's market worth surged by $4 billion.
At the height of trading, Xiaomi's worth rose to $55 billion, exceeding the value of established American car manufacturers General Motors and Ford, which were estimated at $52 billion and $53 billion, respectively.
The Speed Ultra 7, or SU7, from Xiaomi has joined the competitive Chinese electric vehicle market. With a starting price of less than $30,000 for the basic model, it's more affordable than Tesla's Model 3 in China.
Experts point out that Xiaomi, with its substantial financial resources and proficiency in smartphone technology, could have an upper hand over many emerging electric vehicle businesses. Xiaomi has already seen a strong response with numerous pre-orders for its sedan, suggesting high demand and possible waiting periods of four to seven months for purchasers.
The business has manufactured 5,000 SU7 models, dubbed the "Founder's Edition," that come with extra add-ons for initial purchasers.
Lei Jun, the Chief Executive Officer of Xiaomi, declared on social media platforms that the initial set of SU7 vehicles will start shipping in 28 cities across China. Although there are predictions of potential losses from the SU7, Xiaomi still maintains a positive outlook on its exploration into electric vehicles, committing to inject $10 billion into the auto industry.
Nonetheless, a few experts foresee significant deficits, calculating a possible net loss of 4.1 billion yuan ($566.82 million) according to anticipated sales figures.
After the introduction of the SU7, other electric vehicle companies in China declared reductions in prices and offered subsidies. Xiaomi has asked its suppliers to boost the monthly production of the SU7 to keep up with the growing demand.
In the meantime, Chinese auto manufacturer BYD has announced a 13% annual rise in sales of its "new-energy" vehicles. This is in stark contrast to the falling predictions for Tesla's vehicle deliveries in the first quarter, as rumors circulate of production reductions in Shanghai.
(Incorporating information from various sources)
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