Xiaomi Corp.’s shares rose 8% to a lifetime high after the smartphone maker drew strong initial orders for a $35,000 sport utility vehicle intended to compete with Tesla Inc.’s Model Y in China.
The company on Thursday took the wraps off the 253,500 yuan ($35,360) YU7, debuting its second car in a crowded EV market while grappling with scrutiny over its assisted-driving technology. Xiaomi drew a better-than-anticipated 289,000 orders in its first hour of availability.
“We’re going to face the biggest competitor, and also face fierce challenges from all the other manufacturers,” Lei said at the launch event in Beijing.
Lei, who shot to fame with bold plans to unseat Apple Inc. in China, is counting on EVs to take on Elon Musk’s Tesla and fuel the final chapter of his entrepreneurial career. He’s pushed Xiaomi into new arenas from chip design to AI glasses, pledging to spend 200 billion yuan over five years to try and turn the Chinese company into a global device leader.
The company began taking pre-orders Thursday with a 5,000 yuan deposit. In a surprise twist, Lei declared that buyers of Xiaomi’s first car—the SU7 sedan—have three days to switch to the SUV if they haven’t taken delivery of the original vehicle. Xiaomi announced shortly after the event it had processed more than 200,000 pre-orders for the YU7 within three minutes.
“Consumer demand for Xiaomi’s YU7 far exceeds our and market expectations, which should enable Xiaomi to continue consolidating its leadership position in the premium auto market in China,” Goldman Sachs Group Inc. analysts including Timothy Zhao wrote. They raised their price target on the stock 6% to HK$69.
Beyond cars, Thursday’s event also showcased a pair of 1,999 yuan black-rimmed AI glasses that can film video and answer questions off visual cues; the MIX Flip 2, Xiaomi’s new folding phone; and a tablet that uses its in-house Xring O1 chip.
