Xiaomi Set to Launch First Electric Vehicle on March 28
By Jiahui Huang
Chinese mobile phone maker Xiaomi will launch its first electric vehicle this month, a four-door tech-laden sedan that it hopes will capture interest at a time when EV sales in China are slowing and a host of competitors are cutting prices.
The company, best known for its popular smartphones and home appliances, will launch its SU7 model on March 28 in China, Chief Executive Lei Jun said in a post on his Weibo account Tuesday. Xiaomi Motor, the consumer electronics giant's auto unit, said in a separate post on Weibo the car will be available for delivery at the same time.
Xiaomi didn't specify a price for the car. Company shares were up 9.55% by midday in Hong Kong trade, on track for their largest percentage jump since January 2023.
The launch of the SU7 comes three years after Xiaomi said it would enter the car-making business, which Lei said at the time would be "the last big start-up project of my life."
"This is to fulfill our agreement made three years ago," he wrote Tuesday. In a separate post, Lei added that he's confident about entering the EV market, despite intensifying competition.
Xiaomi unveiled the SU7 at its technology conference in December, saying it was capable of acceleration speeds faster than Tesla cars and Porsche EVs, with one version capable of hitting 100 kilometers per hour in 2.78 seconds. One version has a driving range of up to 800 kilometers, it added.
The SU7's release comes as EV makers battle for sales in the world's largest auto market. Xiaomi will enter the fray as leading brands like BYD and Tesla are cutting prices aggressively to entice consumers to buy their EVs in an oversupplied market, as economic pressures weigh on demand.
February retail sales of electric vehicles and plug-in hybrids dropped 12% on year to 388,000 units, according to data from the China Passenger Car Association. Chinese EV startups including NIO and XPeng, which have been selling EVs for more than five years, are still posting operating losses.
Analysts said the SU7's release will likely cut into Xiaomi's bottom line as marketing and other expenses for the venture rise. Xiaomi posted a net profit of 4.87 billion yuan ($677.9 million) in the third quarter, up 52% from the preceding quarter on the back of improved margins.
The key thing to watch for the launch will be the price, specifically if it's below or above CNY200,000, Huatai Securities equity analyst Leping Huang said. The level serves as a sort benchmark for EVs in the same class as the SU7.
Xiaomi may have some advantages over competitors since it is "already a very well-known brand and may be able to leverage on existing distribution channels," Morningstar equity analyst Dan Baker said. But "near-term profit forecasts could well be negative."
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
March 12, 2024 01:18 ET (05:18 GMT)
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