In the midst of a fierce price war, China’s Xiaomi (1810.HK), opens new tab, announced on Tuesday that it will begin deliveries of its first electric vehicle (EV), the model SU7, this month.
The fifth-largest smartphone manufacturer in China said on Weibo that it will be accepting orders at 59 locations across 29 cities. The new EV’s sticker tag is anticipated to be revealed at a launch ceremony on March 28.
The morning session saw a 7% increase in Xiaomi’s shares.
China had a 21% increase in EV sales for the entire year of 2023, with sales up 18% in January-February. In response to declining domestic demand, market leader BYD (002594.SZ) has opened a new tab in an effort to attract customers, leading to a wave of steeper price cuts this year.
Xiaomi’s chief executive, Lei Jun, stated during the Speed Ultra 7 (SU7) sedan’s December launch that the company aims to rank among the top five automakers globally.
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Lei claimed that the SU7’s “super electric motor” technology could accelerate vehicles more quickly than Porsche’s EVs and Tesla (TSLA.O), opens new tab.
Analysts predict that the car’s operating system, which is similar to that of Xiaomi’s well-known phones and other electronics, will appeal to the company’s current clientele.
With the market for smartphones stagnant, Xiaomi has been attempting to expand into EV sales in addition to its primary business, a strategy it first announced in 2021.
Its vehicles will be manufactured at a Beijing plant with an annual capacity of 200,000 vehicles by a branch of the state-owned carmaker BAIC Group (1958.HK), opens new tab.
Reluctant to contribute to a glut of supply, the smartphone giant has committed to investing $10 billion in cars over a ten-year period, making it one of the few new entrants in China’s EV industry to receive approval from authorities.
Editing by Edwina Gibbs and Tom Hogue; reporting by Sarah Wu, Casey Hall, and Qiaoyi Li
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