New Xiaomi EV gets 90,000 orders in a day

Xiaomi Corp. surged in Hong Kong as orders for its first electric vehicle topped estimates, fueling optimism the smartphone maker may succeed in China’s cutthroat car market.

Shares rose as much as 16% on the first day of trading since Beijing-based Xiaomi kicked off sales of its cars. The company said it received orders of nearly 90,000 units within the first 24 hours.

Analysts said orders for Xiaomi’s SU7 came in stronger than expected, and may put it on par with Tesla Inc.’s Model 3 as one of the best-selling premium EV sedans in China.

Goldman Sachs Group Inc. projected that orders may reach 100,000 this year, while Citigroup Inc. estimated full-year sales at around 55,000-70,000 units.

One question is how quickly Xiaomi will be able to manufacture and deliver the vehicles.

“Manufacturing capability ramp-up, on the other hand, will likely become the top focus over the next couple of months,” Goldman Sachs analysts including Timothy Zhao wrote in a note.

“The average waiting time for the SU7 has extended to 18-21 weeks as of late compared to 5-8 weeks initially.”

The global EV market, once a booming sector with vast subsidy-assisted opportunity, has turned into a highly competitive arena.

China’s electrified-car market is projected to slow for a second year, with a key industry body predicting sales growth in 2024 to drop to 25% from 36% last year and 96% in 2022.

Xiaomi’s strong entry may pose a threat to its more established peers.

Carmakers including XPeng Inc. and BYD Co. may follow with pricing adjustments to keep up with the competition, Citigroup analysts including Jeff Chung said.

XPeng fell as much as 9% in Hong Kong, while BYD rose 2.9%.