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Xiaomi gives a significant boost to the Chinese EV market, while BYD dominates and Tesla faces ongoing difficulties
Xiaomi has recently entered the highly competitive Chinese EV market. Despite previous forecasts, Xiaomi appears to have made a significant impact as it competes with Tesla and BYD, two powerhouses in the EV market.
Xiaomi's shares surged up to 16% in the early hours of Tuesday following substantial intrigue in the company's new electric vehicle, even as a brokerage forecasted that Xiaomi might incur a loss of almost $10,000 per vehicle this year.
The value of the stock peaked to the highest since January 2022, on the opening trading day after Xiaomi launched its premier car, which has design similarities with Porsche. Despite the gains reducing slightly later, it still ended up 9% higher, boosting Xiaomi's market worth by $4 billion.
At its highest trading point, Xiaomi achieved a market value of $55 billion, exceeding the worth of established US car manufacturers, General Motors and Ford, which were valued at $52 billion and $53 billion respectively.
The Speed Ultra 7, or SU7 from Xiaomi, makes its debut in the fiercely contested Chinese EV sector. The starting price of this model is less than $30,000, which gives it a price advantage over the Tesla Model 3 in China.
Experts have pointed out that Xiaomi, due to its substantial financial resources and experience in the smartphone industry, could be ahead of many electric vehicle (EV) start-ups. Xiaomi's sedan has already garnered considerable pre-orders, signifying high demand and prospective waiting periods of four to seven months for customers.
The firm has manufactured 5,000 SU7 units, dubbed the "Founder's Edition," complete with extra add-ons for initial purchasers.
Lei Jun, the Chief Executive Officer of Xiaomi, confirmed via social media that the initial shipment of SU7 vehicles will start in 28 cities in China. Even though there are anticipations of setbacks with the SU7, Xiaomi maintains a positive outlook on its foray into Electric Vehicles, committing to pour $10 billion into the automobile industry.
Nonetheless, a few experts foresee significant deficits, approximating a possible net shortfall 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 capacity of the SU7 to satisfy the growing demand.
In the meantime, the Chinese automobile manufacturer, BYD, has announced a 13% annual growth in the sales of their "new-energy" vehicles. This is in stark contrast to the dwindling predictions for Tesla's vehicle deliveries in the first quarter due to rumors of production reductions in Shanghai.
(Incorporating information from various sources)
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