Shares of China’s Xiaomi (1810.HK) soared by as much as 16% on Tuesday, bolstered by the successful launch of its sporty electric vehicle last week. The company, primarily known for its smartphones, added a staggering $7.6 billion to its market value, reaching its highest valuation since January 2022.
Xiaomi’s debut electric vehicle, the SU7 (Speed Ultra 7), has captured significant attention in the market, drawing styling inspiration from Porsche. Priced aggressively at under $30,000 for the base model, the SU7 aims to compete with established players like Tesla’s Model 3 in China.
Despite entering a competitive EV market in China, Xiaomi’s strong showing indicates a promising start. The company has already produced 5,000 “founders edition” SU7 vehicles, equipped with additional accessories for early buyers. CEO Lei Jun announced on social media that deliveries from this batch would commence across 28 Chinese cities, starting with a ceremony at the Beijing factory on Wednesday.
Xiaomi’s valuation now stands at an impressive $55.2 billion, surpassing traditional U.S. automakers General Motors and Ford. Analysts note that while Xiaomi expects losses on the SU7, its expertise in smartphones gives it an advantage in developing smart dashboards, a feature highly sought after by Chinese consumers.
With 88,898 pre-orders within the first 24 hours of sales, the SU7’s popularity suggests strong consumer interest. Despite potential challenges in a competitive market and the anticipated losses on each car sold, Xiaomi’s foray into the electric vehicle segment has marked a significant milestone for the tech giant’s diversification strategy.
