Xiaomi stock jumps as new SUV racks up 289,000 orders within an hour
Xiaomi Corp. shares surged 8% to an all-time high following the smartphone manufacturer’s impressive initial orders for a $35,000 SUV aimed at rivaling Tesla Inc.’s Model Y in China.
On Thursday, the company unveiled the YU7, priced at 253,500 yuan ($35,360), marking its second entry into the competitive EV market while facing examination of its assisted-driving technology. Xiaomi garnered 289,000 orders in its first hour of availability, surpassing expectations.
Xiaomi founder Lei Jun attacked Tesla head-on during Thursday’s launch event, stacking his vehicle against the Model Y much as he compares Mi devices with the iPhone. The YU7’s price tag — largely in line with analysts’ expectations — comes in just under the 263,500 yuan for the latest version of the Model Y, China’s most popular SUV. BYD Co.’s Tang L SUV, slightly smaller than the YU7, sells for between 239,800 yuan and 289,800 yuan.
At the launch event in Beijing, Lei stated, “We will confront the largest competitor and also encounter intense challenges from all the other manufacturers.”
Analyst Expectations Surpassed by Xiaomi YU7 Pre-Orders: Street Wrap
With audacious plans to dethrone Apple Inc. in China, Lei has become a well-known figure and now hopes that electric vehicles will help him challenge Elon Musk’s Tesla and bring his business career to a triumphant conclusion. He has propelled Xiaomi into new fields ranging from chip design to AI glasses, committing to a 200 billion yuan expenditure over five years in an effort to establish the Chinese company as a global device leader.
With a deposit of 5,000 yuan, the company started accepting pre-orders on Thursday. In an unexpected turn of events, Lei announced that purchasers of Xiaomi’s inaugural automobile—the SU7 sedan—have a three-day window to change their order to the SUV if they have not yet received the initial vehicle. Shortly after the event, Xiaomi announced that it had processed over 200,000 pre-orders for the YU7 within three minutes.
Goldman Sachs Group Inc. analysts, including Timothy Zhao, stated, “Consumer demand for Xiaomi’s YU7 far exceeds our expectations and those of the market, which should allow Xiaomi to further consolidate its leadership position in China’s premium auto market.” They increased their price target for the stock by 6%, setting it at HK$69.
What Bloomberg Intelligence Says
The introduction of the YU7 SUV by Xiaomi, along with the possibility of converting current SU7 sedan orders to YU7, might enhance its EV sales growth to 209% in 2025. In China, SUVs have surpassed sedans in popularity. The new model enhances Xiaomi’s product range and aims to broaden its customer base, possibly attracting orders from Tesla and Nio. In the second half of the year, YU7 could account for 41% of Xiaomi’s electric vehicle deliveries and assist in surpassing its electric vehicle sales target by 13%.
The highest-end model is priced at 329,900 yuan and boasts a travel range of 760 kilometers (470 miles) on one charge, with an acceleration to 100 kilometers per hour in just 3.23 seconds. Available in 9 colors, they all feature lidar to enhance driver assistance technology and an 800-volt platform for rapid charging.
Many include the touches and amenities that Chinese drivers are now accustomed to, such as large touch screens, massage chairs, and drawers.
Following a fatal incident involving an SU7 sedan that drew Chinese authorities’ scrutiny and significantly reduced orders, the new model will serve as a crucial assessment of demand for Xiaomi cars.
The introduction of the YU7 comes at a time when Chinese authorities are increasingly worried about a prolonged price war. More than a dozen other automakers, including Xiaomi and BYD, were cautioned to self-regulate and avert the use of “zero-mileage” used cars for inflating sales figures. They were also advised to ensure timely payments to suppliers in order to enhance the overall cash flow of the entire supply chain.
Lei continues to have faith in the potential of Xiaomi’s entry into the automotive market, forecasting that the new model will enable the company’s EV division to turn a profit in the latter half of the year — making it one of the quickest brands to reach that landmark in the auto industry.
That vision has attracted the interest of investors, who have sent shares up. With a value of approximately $200 billion, it surpasses BYD — the electric vehicle giant that leads the Chinese market — and its SU7 has outperformed the Tesla Model 3 in sales this year to date.
In addition to cars, the event on Thursday featured a pair of AI glasses priced at 1,999 yuan that have black rims and can record video and respond to questions based on visual cues; Xiaomi’s latest folding phone, the MIX Flip 2; and a tablet featuring its proprietary Xring O1 chip.