Xiaomi Corp.'s stock price soared after the company's first electric vehicle orders exceeded expectations, giving rise to optimism that the smartphone maker may thrive in China's fiercely competitive car sector.
In the first day of trading following the launch of automobile sales, shares of Beijing-based Xiaomi surged up to 16% before losing some of their gains. Within the first day, the business claimed to have gotten orders for approximately 90,000 pieces.
According to analysts, the SU7 from Xiaomi has exceeded expectations in terms of sales and could perhaps compete with the Model 3 from Tesla Inc. as one of the top-selling luxury electric sedans in China
Orders might hit 100,000 units this year, according to Goldman Sachs Group Inc., while full-year sales are expected to be between 55,000 and 70,000 units, according to Citigroup Inc. How fast will Xiaomi be able to make and ship the cars is an unknown.
"In contrast, manufacturing capability ramp-up is expected to take center stage in the coming months," a note from Goldman Sachs analysts Timothy Zhao and others read. "The average waiting time for the SU7 has recently increased to 18-21 weeks from 5-8 weeks initially."
Lei Jun, co-founder of Xiaomi, said on the Chinese social media platform Weibo that deliveries will begin in 28 locations on Wednesday. The Founders Edition cars were likely the first to receive the mass shipment, which was initially said to happen at the tail end of April.
Once a thriving industry with enormous opportunities helped along by subsidies, the global EV market is now a cutthroat battleground. The electrified-car market in China is expected to have a further slowdown in 2024, according to a prominent industry association. Sales growth was predicted to fall to 25% from 36% in 2023 and 96% in 2022.
The more established competitors may find themselves threatened by Xiaomi's formidable entrance. After XPeng Inc. and BYD Co., several analysts at Citigroup, like Jeff Chung, predicted price cuts, the automakers may follow suit.
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