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Xiaomi provides a significant boost to the Chinese EV market, while BYD dominates and Tesla faces challenges
The Chinese EV market, considered one of the most competitive worldwide, welcomes new participant, Xiaomi. In contrast to prior forecasts, Xiaomi appears to have made a substantial impact as it competes with Tesla and BYD, two major players in the EV market.
Xiaomi's shares skyrocketed up to 16% on Tuesday morning following considerable enthusiasm around the company's latest electric car. This occurred even though a financial services firm projected that Xiaomi might suffer a loss of almost $10,000 for each car sold this year.
The stock achieved its peak value since January 2022 on the initial trading day after the introduction of Xiaomi's first car, which has design influences from Porsche. Even though it eventually reduced its profits, closing 9% up, Xiaomi's market worth rose by $4 billion.
At the height of trading, Xiaomi's value soared to $55 billion, exceeding the valuation of established American car manufacturers General Motors and Ford, which were worth $52 billion and $53 billion, respectively.
Xiaomi's SU7, also referred to as Speed Ultra 7, has been introduced in the fiercely contested Chinese EV market. Its base model is priced less than $30,000, making it more affordable than Tesla's Model 3 in China.
Experts suggest that Xiaomi, due to its substantial financial resources and proficiency in the smartphone industry, could possibly outperform most electric vehicle (EV) startups. The company has experienced a surge in early orders for its sedan model, suggesting a high level of interest and potential delivery delays ranging from four to seven months for purchasers.
The firm has manufactured 5,000 units of the SU7 model, dubbed the "Founder's Edition," complemented with extra features for initial purchasers.
Lei Jun, the chief executive officer of Xiaomi, declared on social platforms that the initial set of SU7 vehicles would start being delivered in 28 cities in China. Even with anticipated deficits on the SU7, Xiaomi maintains a positive outlook on its EVs initiative, committing to a $10 billion investment in the car industry.
Nonetheless, several experts forecast significant deficits, approximating a possible net loss of 4.1 billion yuan ($566.82 million) grounded on expected sales volume.
After the introduction of the SU7, other electric vehicle manufacturers in China declared reductions in prices and incentives. Xiaomi has asked its suppliers to boost the monthly production rate of the SU7 to keep up with the skyrocketing demand.
In the meantime, BYD, a Chinese automobile manufacturer, noted a 13% annual rise in the sales of their "new-energy" vehicles. This growth is in stark contrast to the dwindling forecasts for Tesla's vehicle deliveries in the first quarter, following stories about production reductions in Shanghai.
(Incorporating information from various sources)
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