Deepika Agrawal 
Chinese electronics giant Xiaomi saw its market valuation surge as much as 16% on Tuesday as it launched its first electric vehicle in the market last week. The SU7 electric sporty sedan drew strong interest from buyers as it garnered 88,898 pre- orders in just 24 hours of the opening. Xiaomi added about USD 7.6 billion to its market value as its shares reached their highest level since January 2022 on the first day of trading after launching the debut car.
The Chinese company gets a majority of its USD 37.5 billion revenue from being a smartphone vendor. It now has a valuation of USD 55.2 billion, surpassing that of traditional US automakers General Motors (GM) and Ford at USD 52.4 billion and USD 53.1 billion, respectively.
The Xiaomi SU7 or Speed Ultra 7 has entered a crowded Chinese EV market with a price tag under USD 30,000 for its base model, which is cheaper than Tesla‘s Model 3 in China. The SU7 draws its styling cues from Porsche and commands an attention-grabbing price tag in a competitive market.
To kick-start the sales, Xiaomi offered 5,000 SU7 vehicles dubbing them the “founders edition”. These were coupled with additional accessories and benefits for early buyers. Deliveries from that batch would start across 28 Chinese cities on Wednesday and would include a ceremony at its Beijing factory. However, a brokerage forecast that Xiaomi would lose nearly USD 10,000 per car this year.
Xiaomi too expects to lose money on the SU7, and some analysts predict the loss would be substantial. “We maintain our cautious view that ultimately everyone could be a loser” within the 200,000 to 300,000 yuan segment, Citi Research analysts told Reuters. However, some analysts believe that Xiaomi has deeper pockets than most EV startups and its smartphone expertise gives it an edge in smart dashboards.
The demand for the SU7 has been robust and the company has advised potential buyers that the sedan could face wait times of four to seven months. Following the launch of the Xiaomi SU7, other Chinese EV brands with comparable models announced price cuts and subsidies to compete with the new entrant.
