Xiaomi's Tesla Killer Budget EV Sparks Nearly 15% Rally After Launch, Heats Up Nio, Xpeng Rivalry

Chinese smartphone giant Xiaomi Corp XIACF saw a nearly 15% surge in its shares on Tuesday following the launch of its first electric vehicle (EV), the SU7. The new car’s competitive pricing and features have significantly impacted the market.

What Happened: Xiaomi’s shares experienced a significant boost on Tuesday, the first trading day after the company unveiled its SU7 EV. The car’s price is approximately $4,000 lower than Tesla Inc‘s TSLA Model 3 but has a longer driving range.

Within the first 24 hours, the company received 88,898 pre-orders. The basic version has a wait time of at least five to seven months. Delivery times for the standard SU7 model could take 18-21 weeks, the SU7 Pro model 18-21 weeks, and the most expensive model, priced at 299,900 yuan, could take 27-30 weeks.

Other Chinese EV manufacturers, such as Xpeng and Nio, have also announced price cuts and purchase subsidies. This move comes amid a slowdown in the growth of new energy vehicles in China, which accounts for the world’s largest auto market.

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Why It Matters: Xiaomi’s entry into the EV market has been highly anticipated. The company aimed to attract 20 million premium users in China with its new EV, and the response has been overwhelming, with 120,000 orders placed within 36 hours of the car’s launch.

Despite the competitive market, Xiaomi’s EV has made a strong impact, with the company’s shares experiencing a significant surge. This development also comes when other Chinese EV manufacturers face challenges due to the slowdown in the market.

In January, Xiaomi announced that it would kickstart the production of the SU7 in February, with a target of 10,000 units by July. The company’s entry into the EV market has been met with enthusiasm and skepticism, with some noting the similarities between the SU7 and Porsche’s models.

Price Action: As of the time of writing, Xiaomi’s shares are trading at 16.62 Hong Kong Dollars. On Thursday, the company’s share value closed at 14.62 Hong Kong Dollars, while the opening price on Tuesday was 17.20 Hong Kong Dollars, reflecting a notable increase of 14.81%, according to the data from Benzinga Pro.

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