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Xiaomi’s shares hit a record high after the Beijing-based smartphone maker said it received 200,000 pre-orders for its latest electric vehicle in three minutes, threatening the positions of BYD, Tesla and other carmakers competing in China’s cut-throat market.
The Chinese group’s Hong Kong-listed shares rose 8 per cent after the market opened on Friday to an all-time high of HK$61.45 (US$7.83) before paring gains to trade up 4.5 per cent.
The jump came after Xiaomi, which started as a smartphone maker but has since branched out to other electronics, including electric cars, launched pre-orders for its YU7 sport utility vehicle on Thursday.
The latest EV, priced at Rmb253,500 ($35,370) to compete directly with Tesla’s Model Y, has been launched at a critical juncture for carmakers in China. While sales of battery EVs and plug-in hybrids are outstripping traditional fuel-powered cars, the fast pace of technological development and extreme competition is straining the finances of carmakers and their suppliers.
Citi analyst Jeff Chung said Tesla, currently fifth in the Chinese EV market, might have to reduce its own prices in response, end subscription fees for its so-called full self-driving platform, extend a zero-interest loan offered to customers from five to seven years and provide more financing incentives.
Xiaomi said in a social media post it had received more than 289,000 pre-orders for the YU7 within one hour of the sale starting on Thursday. Chung estimated future monthly sales of the YU7 to be about 60,000 to 80,000 cars.
The strong initial sales of the Ferrari-looking vehicle marks a reprieve for Xiaomi’s founder, billionaire Lei Jun, who has faced criticism after three people were killed in an accident involving an SU7 electric sedan with semi-autonomous capabilities. The crash also added to regulator concern over the safety of driverless cars.
Lei Xing, founder of Chinese consultancy AutoXing, said in a post on LinkedIn that he had expected sales of the YU7 to reach as much as 100,000 in the first 24 hours, noting that last year’s release of the SU7, the company’s first car, drew 50,000 orders in 27 minutes.
Production of so-called new energy vehicles, including EVs and hybrids, has increased by more than 46 per cent in the first four months of the year, while cars with internal combustion engines are down 6 per cent, according to data from Shanghai-based consultancy Automobility.
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BYD leads China’s EV market, with a share from January to the end of April of 29 per cent on sales just shy of 1mn cars.
That compares with Tesla’s market share of just under 5 per cent and 3.5 per cent for Xiaomi. Foreign groups, which for decades dominated the market, now have a share of 31 per cent across EVs and fuel-powered cars.
Xiaomi’s shares have risen more than 70 per cent this year, making it one of the top-performing companies on the Hong Kong stock exchange this year.
Shares of BYD fell 1.6 per cent in Hong Kong on Friday but are still up more than 40 per cent year to date. That compares with a 23 per cent rise for the Hang Seng index this year.
Additional reporting by Wang Xueqiao in Shanghai