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Xiaomi boosts the Chinese EV market significantly, while BYD dominates and Tesla faces challenges
The Chinese EV market, known as one of the most competitive globally, welcomes Xiaomi as a new competitor. Despite previous forecasts, Xiaomi appears to have made a significant impact as it competes with Tesla and BYD, two powerhouses in the EV market.
The value of Xiaomi's shares surged up to 16% early Tuesday morning following substantial interest in the company's latest electric vehicle. This is despite a brokerage's forecast that Xiaomi might lose almost $10,000 per car this year.
The stock hit its peak since January 2022 on the initial trading day after Xiaomi's first car was launched, which has been inspired by Porsche's design. Even though it later reduced its profits to end 9 percent higher, Xiaomi's market worth rose by $4 billion.
At the height of trading, Xiaomi achieved a market value of $55 billion, surpassing established American car manufacturers General Motors and Ford, which were valued at $52 billion and $53 billion, respectively.
Xiaomi's SU7, also referred to as Speed Ultra 7, is making its debut in the highly competitive Chinese EV market. Priced under $30,000 for the standard version, it's more affordable than Tesla's Model 3 in China.
Observers point out that Xiaomi, due to its substantial financial resources and proficiency in the smartphone industry, might hold an upper hand against many electric vehicle (EV) newcomers. Xiaomi's sedan has attracted a significant number of pre-orders, suggesting a high level of demand and prospective delivery delays of four to seven months for consumers.
The firm has manufactured 5,000 SU7 units, dubbed as the "Founder's Edition," supplemented with extra features for initial purchasers.
Lei Jun, the CEO of Xiaomi, revealed on social media that the initial shipment of SU7 vehicles will commence in 28 cities across China. Even though there are anticipations of losses with the SU7, Xiaomi maintains a positive outlook towards its entry into the electric vehicle market, committing to a $10 billion investment in the automotive industry.
Nonetheless, certain experts forecast significant deficits, projecting a possible net loss of 4.1 billion yuan ($566.82 million) based on anticipated sales figures.
After the release of the SU7, other electric vehicle manufacturers in China declared reductions in prices and grants. Xiaomi has asked its suppliers to boost the monthly production capability of the SU7 to cater to the rising demand.
Concurrently, the Chinese automobile manufacturer, BYD, announced a 13 per cent annual rise in the sales of "new-energy" vehicles. This progress stands in stark contrast to the falling predictions for Tesla's vehicle deliveries in the first quarter, due to rumored production reductions in Shanghai.
(Incorporating information from various sources)
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