Following the smartphone manufacturer's successful early orders for a $35,000 sport utility vehicle aimed at competing with Tesla Inc.'s Model Y in China, Xiaomi Corp.'s shares surged eight percent to a record high.
The 253,500 yuan ($35,360) YU7, the company's second vehicle in a congested EV market, was unveiled as it battled criticism of its assisted-driving technology.
In its first hour of availability, Xiaomi received 289,000 orders, which was more than expected.
During the launch event, Xiaomi founder Lei Jun took aim at Tesla, comparing his car to the Model Y and comparing Mi gadgets to the iPhone.
The price of the YU7, which is slightly less than the 263,500 yuan for the most recent model of the Model Y, China's most popular SUV, is mainly in line with analysts' predictions. Slightly smaller than the YU7, the Tang L SUV from BYD Co. costs between 239,800 and 289,800 yuan.
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Lei, who rose to prominence with audacious intentions to overtake Apple Inc. in China, is relying on electric vehicles (EVs) to challenge Elon Musk's Tesla and support the last phase of his business career. He has pushed Xiaomi into new areas, such as chip design and AI eyewear, and has committed to investing 200 billion yuan over five years in an effort to make the Chinese business a leader in devices worldwide.
The company started accepting pre-orders with a 5,000 yuan down payment.
In a shocking turn of events, Lei announced that customers who have not yet received their original Xiaomi vehicle—the SU7 sedan—had three days to swap to the SUV.
Shortly after the ceremony, Xiaomi declared that it had completed over 200,000 YU7 pre-orders in under three minutes.
With the introduction of the YU7 SUV and the possibility of converting current SU7 sedan orders to YU7, Xiaomi may increase its EV sales growth to 209 percent by 2025. In China, SUVs are more popular than sedans, and the new model adds to Xiaomi's lineup to reach a wider audience and possibly win orders from Nio and Tesla. YU7 might help Xiaomi surpass its EV sales goal by 13 percent and account for 41 percent of its EV deliveries in the second half.
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The top model, which costs 329,900 yuan, can accelerate to 100 kilometers per hour in 3.23 seconds and cover 760 kilometers (470 miles) on a single charge. They have an 800 volt platform for quick charging and lidar, which enhances driver assistance technology. They are available in nine different colors. Many include the features and conveniences that Chinese drivers are accustomed to, such as drawers, massage chairs, and huge touch displays.
Following a catastrophic accident involving an SU7 sedan that drew attention from Chinese authorities and hammered orders, the new model will serve as a crucial test of demand for Xiaomi automobiles.
Chinese officials are increasingly concerned about a prolonged pricing war at the same time as the YU7's introduction. In order to enhance the total cash flow of the entire supply chain, BYD, Xiaomi, and over a dozen other manufacturers were cautioned to self-regulate, stop using "zero-mileage" used cars to falsify sales numbers, and pay suppliers on time.
Lei is nonetheless optimistic about the future of Xiaomi's auto venture, forecasting that the new model will help the company's electric vehicle division become profitable in the second half, making it one of the quickest brands in the automotive industry to do so.