Joining the electric vehicle (EV) race has been a long-standing dream of Apple (NASDAQ: AAPL), but, unfortunately for Tim Cook and his firm, a dream the big tech blue chip had to abandon in 2024 amid its own troubles and the broader slowdown of the EV industry.
Across the Pacific, another technology giant proved undeterred by the current conditions and recently entered the Chinese EV market by launching its very first electric car – Xiaomi’s (HKG: 1810) SU7.
Reports indicate that the model has proven an effective counter to the yet-to-be-launched Tesla (NASDAQ: TSLA) escalation of the electric vehicle price war – initiated with the announcement of a €25,000 ($27,000) – as, priced at 215,900 yuan ($29,870), it has seemingly already found a significant customer base with pre-orders nearing 90,000, and making 50,000 orders in half an hour.
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Xiaomi’s offering is likely to significantly stiffen the already massive competition in the industry as the firm’s approach of offering premium products at an approachable price might be especially effective in an economic climate that ensured that premium car makers like Lucid (NASDAQ: LCID) are doing exceptionally poorly.
Still, depending on how solid Xiaomi’s quality control for the EVs proves to be, the move might not be a slam dunk that initial figures suggest.
The firm boasts a less-than-stellar reputation when it comes to things like its smartphone OS and what is arguably an overly aggressive policy of pushing monetizable apps to offset the low product asking price.
Xiaomi stock price chart
Whether the future for Xiaomi’s EVs is bright, or the company starts feeling the cold grip of the EV winter, the immediate reaction to the release and the initial figures has been overwhelmingly positive.
Indeed, despite the January slaughter in the Chinese stock markets, Xiaomi shares managed to rise 5.17% year-to-date.
The optimism is particularly pronounced in the last 30 days – on March 12, Xiaomi announced deliveries would start on March 28 – and the stock is up 22.04% in the time frame.
The most recent performance – largely driven by the start of EV deliveries – has also been strong and Xiaomi shares are 8.10% in the green on the weekly chart and have climbed 8.97% in the last 24 hours of trading to the press time price of 16.28 HKD ($2.08).
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