“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,” 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 per cent on Tuesday as
the SU7 drew strong interest, though a brokerage forecast the firm would lose
nearly US$10,000 per car this year. Its shares traded more than 3 per cent
lower on Wednesday morning, against a 1.1 per cent fall in the broader Hang
Seng Index.
At Tuesday’s highest, the company had a valuation of US$55
billion at a share price of HK$17.34 – higher than that of traditional US
automakers General Motors and Ford at US$52 billion and US$53 billion,
respectively.
Xiaomi’s SU7 enters a crowded China EV market with an
attention-grabbing price tag – under US$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.
The company earns the majority of its US$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 US$10 billion in the
auto business as “the last major entrepreneurship project” of his life. REUTERS