Chinese smartphone maker Xiaomi said it has received more than 100,000 orders for its first electric vehicle, the SU7, as it began deliveries. Xiaomi, the prominent Chinese smartphone manufacturer, has made a significant foray into the electric vehicle (EV) market with its debut sedan, the SU7, which has garnered immense interest, surpassing 100,000 orders as deliveries commence.
The SU7, an abbreviation for Speed Ultra 7, marks Xiaomi's entry into a fiercely competitive Chinese EV market, distinguished by its enticing price point of under $30,000 for the base model, undercutting Tesla's Model 3 in China. Despite the challenging landscape characterized by an intense EV price war and slowing demand, analysts believe Xiaomi holds a competitive edge owing to its robust financial position and expertise in smartphone technology, particularly in smart dashboard features highly valued by Chinese consumers.
With the first deliveries stemming from an initial batch of 5,000 vehicles, labeled the "founders edition," Xiaomi anticipates meeting strong demand, as evidenced by the 88,898 pre-orders within the first 24 hours of sales. The company advises potential buyers to brace for wait times ranging from four to seven months, indicative of the overwhelming interest in its sedan.
Xiaomi's founder and CEO, Lei Jun, announced the commencement of deliveries across 28 Chinese cities, accompanied by a ceremony at the Beijing factory. However, despite the initial success, Xiaomi has acknowledged the likelihood of incurring losses on the SU7, with analysts projecting substantial deficits.
Citi Research analysts caution that intense competition within the 200,000 to 300,000 yuan segment could lead to losses for all players. Based on projected sales volume for this year, Citi estimates potential net losses amounting to 4.1 billion yuan, averaging 68,000 yuan per car.
Lei Jun's ambitious venture into the EV sector, backed by a $10 billion investment, signifies a pivotal milestone for Xiaomi. The SU7 launch has triggered responses from other Chinese EV brands, prompting price cuts and subsidies as competition intensifies. Notably, the segment is poised for a surge in offerings, with around 240 EV models expected to vie for market share in 2024, a nearly 20% increase from the previous year, according to Citi analysts.