Chinese smartphone giant Xiaomi announced on Wednesday that it has commenced deliveries of its inaugural electric vehicle, the SU7, after receiving an overwhelming response of more than 100,000 orders. The SU7, touted as a sporty electric sedan, marks Xiaomi’s entry into the competitive automotive market.
CEO and founder Lei Jun expressed his enthusiasm at a ceremony in Beijing commemorating the vehicle’s debut, declaring, “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.”
The initial deliveries stem from a limited production run of 5,000 vehicles, known as the “Founder’s Edition,” which includes additional accessories for early adopters. Following the SU7’s launch last week, Xiaomi cautioned potential buyers about potential wait times of four to seven months, underscoring the robust demand for the sedan.
Xiaomi’s shares experienced a surge of up to 16% on Tuesday as the SU7 garnered significant interest. However, despite the strong reception, analysts forecasted a substantial loss of nearly $10,000 per car for the company this year. Consequently, Xiaomi’s shares saw a decline of over 3% on Wednesday morning, amidst a broader fall in the Hang Seng Index.
At its peak on Tuesday, Xiaomi boasted a valuation of $55 billion, surpassing traditional U.S. automakers General Motors and Ford, which were valued at $52 billion and $53 billion, respectively.
The SU7 enters China’s bustling electric vehicle market with an attractive price tag, starting at under $30,000 for the base model, making it more affordable than Tesla‘s Model 3 in China.
While navigating the competitive landscape of China’s EV market presents challenges, analysts believe Xiaomi’s substantial financial resources and expertise in smartphones provide it with a competitive advantage, particularly in the realm of smart dashboards – a feature highly valued by Chinese consumers.
With the majority of its revenue derived from smartphone sales, the launch of the SU7 marks a significant milestone for Lei, who announced Xiaomi’s venture into EVs in 2021, committing to a $10 billion investment in the auto business as “the last major entrepreneurship project” of his life.
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