Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Chinese smartphone maker Xiaomi starts delivering the first of more than 100,000 EVs ordered

Published 04/02/2024, 10:50 PM
Updated 04/02/2024, 11:20 PM
© Reuters. People look at Xiaomi's first electric vehicle SU7 which is displayed at a showroom of a newly opened Xiaomi store in Beijing, China March 25, 2024. REUTERS/Tingshu Wang/File Photo

By Sarah Wu

Beijing (Reuters) -Chinese smartphone maker Xiaomi (OTC:XIACF) on Wednesday said it has received more than 100,000 orders for its first car - a sporty electric vehicle called the SU7 - as it began deliveries.

"Xiaomi's car officially debuts, the real revolution in smart cars has officially begun, and China will surely give birth to a great company like Tesla (NASDAQ:TSLA)," CEO and founder Lei Jun said at a ceremony in Beijing marking the first deliveries.

The first deliveries come from a limited batch of 5,000 cars that Xiaomi had already produced - called the "Founder's Edition," equipped with additional accessories for early buyers.

Following last week's launch of the SU7 - short for Speed Ultra 7 - Xiaomi advised buyers of its sedan that they could face wait times of four to seven months, a sign of robust demand.

Xiaomi's shares surged as much as 16% on Tuesday as the SU7 drew strong interest, though a brokerage forecast the firm would lose nearly $10,000 per car this year. Its shares traded more than 3% lower Wednesday morning, against a 1.1% fall in the broader Hang Seng Index.

At Tuesday's highest, the company had a valuation of $55 billion at a share price of HK$17.34 - higher than that of traditional U.S. automakers General Motors (NYSE:GM) and Ford (NYSE:F) at $52 billion and $53 billion, respectively.

Xiaomi's SU7 enters a crowded China EV market with an attention-grabbing price tag - under $30,000 for the base model, cheaper than Tesla's Model 3 in China.

While the world's largest auto market is challenging for newcomers due to a cut-throat EV price war and slowing demand, analysts have said Xiaomi has deeper pockets than most EV startups and its smartphone expertise gives it an edge in smart dashboards - a feature prized by Chinese consumers.

© Reuters. People look at Xiaomi's first electric vehicle SU7 which is displayed at a showroom of a newly opened Xiaomi store in Beijing, China March 25, 2024. REUTERS/Tingshu Wang/File Photo

The company earns the majority of its $37.5 billion revenue from selling smartphones.

The SU7 launch fulfils the ambition of Lei, who announced the company's foray into EVs in 2021, pledging to invest $10 billion in the auto business as "the last major entrepreneurship project" of his life.

Latest comments

Apple blew it
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.