The company Xiaomi's stocks had the largest intraday value growth in over a year after the company announced that it will start selling its long-awaited electric vehicles this month.
The Chinese company has been developing its own electric car for a long time. At the end of last year, Xiaomi unveiled its first electric sedan with a panoramic glass roof and a top speed of 265 km/h. Now the company is ready to start selling its cars and enter the highly competitive electric vehicle market in China, dominated by Tesla and BYD.
Xiaomi will offer its SU7 series for purchase starting from March 28 in 29 cities, the company announced on Weibo, but did not disclose the prices. Following this news, its stocks rose by 9.9% in Hong Kong.
However, Xiaomi is entering the electric vehicle market at a challenging time. Recently, this niche has become less attractive as Tesla and BYD are engaged in a price war to attract Chinese consumers, while the rest of the industry is facing declining margins and slowing sales growth. Apple recently canceled its long-standing electric car project as it struggled to adapt its technological expertise to a completely new manufacturing field.
Xiaomi hopes to succeed where Apple failed. The electric car initiative started 3 years ago significantly differs from the previous experience of the Chinese company. Xiaomi's main business is online sales of phones and other electronic devices at relatively affordable prices. However, co-founder Lei Jun stated that Xiaomi's electric car will not be a budget offering. Analysts expect the average price to be $30.7-$36.2 thousand with production volumes of 30-50 thousand units in the first year.
Xiaomi is collaborating with the state-owned company Beijing Automotive Group to avoid lengthy waiting for production approval from Chinese regulators. The SU7 (Speed Ultra) cars can accelerate from 0 to 100 km/h in just 2.78 seconds.
Source: bloomberg
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