Chinese smartphone maker Xiaomi starts delivering the first of more than 100,000 EVs ordered

Chinese smartphone maker Xiaomi on Wednesday said it has received more than 100,000 orders for its first car - a sporty electric vehicle called the SU7 - as it began deliveries.

 

"Xiaomi's car officially debuts, the real revolution in smart cars has officially begun, and China will surely give birth to a great company like Tesla," CEO and founder Lei Jun said at a ceremony in Beijing marking the first deliveries.

The first deliveries come from a limited batch of 5,000 cars that Xiaomi had already produced - called the "Founder's Edition," equipped with additional accessories for early buyers.

Following last week's launch of the SU7 - short for Speed Ultra 7 - Xiaomi advised buyers of its sedan that they could face wait times of four to seven months, a sign of robust demand.

Xiaomi's shares surged as much as 16% on Tuesday as the SU7 drew strong interest, though a brokerage forecast the firm would lose nearly $10,000 per car this year. Its shares traded more than 3% lower Wednesday morning, against a 1.1% fall in the broader Hang Seng Index.

At Tuesday's highest, the company had a valuation of $55 billion at a share price of HK$17.34 - higher than that of traditional U.S. automakers General Motors and Ford at $52 billion and $53 billion, respectively.

Xiaomi's SU7 enters a crowded China EV market with an attention-grabbing price tag - under $30,000 for the base model, cheaper than Tesla's Model 3 in China.

While the world's largest auto market is challenging for newcomers due to a cut-throat EV price war and slowing demand, analysts have said Xiaomi has deeper pockets than most EV startups and its smartphone expertise gives it an edge in smart dashboards - a feature prized by Chinese consumers.

The company earns the majority of its $37.5 billion revenue from selling smartphones.

The SU7 launch fulfils the ambition of Lei, who announced the company's foray into EVs in 2021, pledging to invest $10 billion in the auto business as "the last major entrepreneurship project" of his life.