Xiaomi, a Big Name in Tech, Now Zooms into the Electric Vehicle Race
Xiaomi, known for its smartphones, is making headlines with its new electric vehicle (EV), causing its market value to jump by $7.6 billion. The company’s shares soared up to 16% this Tuesday, reaching their highest point since January 2022. This spike came right after Xiaomi unveiled its first car, the SU7, last Thursday, which seems to have caught everyone’s attention with its sleek design inspired by Porsche and a surprisingly affordable price tag.
The SU7: Xiaomi’s Bold Answer to Tesla
Entering China’s competitive EV market, the SU7 stands out with a base price of under $30,000—cheaper than Tesla’s Model 3. Despite the fierce competition and slowing demand in China’s EV market, Xiaomi is off to a promising start. Thanks to its deep pockets and expertise in smartphones, Xiaomi brings a fresh edge to the EV table, especially with smart dashboards that appeal to tech-savvy drivers.
The company has already seen a wave of interest, with wait times for the new sedan stretching between four to seven months. Xiaomi announced a staggering 88,898 pre-orders within just 24 hours after the sales began.
Financial Challenges Ahead
However, it’s not all smooth driving for Xiaomi. The company has openly said that it will lose money on each SU7 sold, with estimates suggesting a loss of around $9,400 per car. Analysts from Citi Research express concern, predicting a tough road ahead in the EV price range of $27,650 to $41,475. They estimate that, based on selling 60,000 units this year, Xiaomi could face a total loss of about $567 million.
Xiaomi’s Electric Dream
The launch of the SU7 is a dream come true for Xiaomi’s founder, Lei Jun, who in 2021 shared his vision of entering the EV market. Lei Jun sees this as his last major venture and is committed to investing $10 billion in Xiaomi’s auto business.
Following Xiaomi’s bold move, other Chinese EV makers have started slashing prices and offering subsidies to stay competitive. With about 240 EV models expected to compete in the same price segment next year, the race is getting tighter.
Xiaomi’s venture into electric vehicles is more than just a business move; it’s a significant step towards innovation and sustainability in the auto industry. While the financial road ahead may have its bumps, Xiaomi’s entry into the EV market marks an exciting new chapter for the tech giant and electric vehicle enthusiasts alike.
