Xiaomi Shares Surge 8% After 289,000 Orders For New EV

Xiaomi Corp.’s shares surged 8% to a new high after the company received an overwhelming 289,000 orders for its new electric SUV, the YU7, within the first hour of its launch. The YU7, priced at 253,500 yuan ($35,360), is Xiaomi's second car and is designed to compete with Tesla Inc.’s Model Y in China. The strong initial response from consumers indicates a high level of interest and confidence in Xiaomi's entry into the electric vehicle (EV) market.

The YU7's launch is a significant milestone for Xiaomi, as it diversifies its product portfolio beyond smartphones and consumer electronics. The company's founder, Lei Jun, has been vocal about his ambition to challenge Tesla and other major players in the EV market. During the launch event, Lei Jun directly compared the YU7 to Tesla's Model Y, highlighting its competitive pricing and advanced features. The YU7's price tag is slightly lower than the latest version of the Model Y, positioning it as a strong contender in the premium EV segment.

The YU7's success is not only a testament to Xiaomi's brand strength but also to the growing demand for electric vehicles in China. The SUV's features, including a range of up to 760 kilometers on a single charge, fast acceleration, and advanced driver assistance technology, make it an attractive option for consumers. The company's ability to process over 200,000 pre-orders within three minutes further underscores its operational efficiency and preparedness for the launch.

Xiaomi's entry into the EV market comes at a time when Chinese authorities are scrutinizing the industry for price wars and other irregularities. Despite these challenges, Lei Jun remains optimistic about the prospects for Xiaomi's EV unit, predicting that the new model will help the company achieve profitability in the second half of the year. This would make Xiaomi one of the fastest brands to reach this milestone in the automotive sector.

The YU7's launch also coincides with Xiaomi's broader strategy to expand into new arenas, including chip design and AI glasses. The company has pledged to spend 200 billion yuan over five years to become a global device leader. The success of the YU7 could further fuel this ambition and solidify Xiaomi's position as a leading technology company.

In addition to the YU7, Xiaomi also showcased other innovative products during the launch event, including AI glasses, a new folding phone, and a tablet equipped with its in-house Xring O1 chip. These products demonstrate Xiaomi's commitment to innovation and its ability to leverage its technology expertise across multiple sectors.

Overall, the strong initial orders for the YU7 reflect a growing consumer interest in electric vehicles and Xiaomi's ability to capitalize on this trend. The company's success in the EV market could drive future growth and further establish its position as a leading technology company. As Xiaomi continues to expand its product portfolio and innovate in new areas, it is well-positioned to compete with major players in the global technology and automotive industries.