Xiaomi SUV Takes Aim at Tesla
Preorders for the YU7 hit 289,000 in the first hour of sales, according to Xiaomi. Xiaomi has launched a new car that analysts say might be a serious challenger to Tesla's bestselling Model Y. PREMIUM Xiaomi SUV Takes Aim at Tesla
The Chinese company, a consumer electronics giant that has expanded into electric vehicles, unveiled the YU7 sport-utility vehicle at an event Thursday.
As he presented the car, Xiaomi founder Lei Jun compared it to Tesla's Model Y, pointing out that the YU7 is about $1,395 cheaper.
The starting price for the YU7 is 253,500 yuan, equivalent to $35,367. Prices for Tesla's Model Y start at 263,500 yuan in China.
The more premium YU7 Pro and YU7 Max models have price tags of 279,900 yuan and 329,900 yuan, respectively.
Analysts had been keenly watching the launch, which comes as carmakers lock into another price war as they seek to win over cautious Chinese consumers.
Shares of Xiaomi jumped Friday morning in Hong Kong, rising as much as 8.0% and hitting a new high before paring gains. The stock was last up 3.5% at HK$58.95, and up 71% for the year.
Preorders for the YU7 reached 200,000 within the first three minutes of sales, and hit 289,000 in the first hour, according to Xiaomi.
That already exceeds most buy-side expectations for the first 24 hours, Citi analysts led by Kyna Wong wrote in a note. They see upside to their forecast of 400,000 units in Xiaomi EV shipments this year.
Xiaomi's rollout could stir up more pricing battles in China's fiercely competitive EV space. Last month, BYD—the country's biggest EV maker—slashed prices on several models, prompting similar moves by rivals.
'As the major competitor, we expect Tesla may cut prices further,' Citi analysts led by Jeff Chung said in a note.
Another big EV maker, XPeng, could also cut prices on its G7 SUV to stay competitive, the Citi analysts added. Pricing for Li Auto's all-electric i8 SUV is unlikely to be directly affected, but the analysts think there might be an impact on the i6.
Shares of XPeng were last down 2.7% in Hong Kong, while Li Auto was 0.8% lower.
Shares in Contemporary Amperex Technology Co.–a battery maker that supplies batteries for Xiaomi's cars—were up 0.7%.
Focus now turns to Xiaomi's upcoming earnings and guidance, due in August, which will show how its EV business is stacking up against its smartphone segment, the company's biggest revenue driver. Attention will also be on Xiaomi's Internet of Things and lifestyle products segment, after revenue hit a record in the first quarter, thanks in part to sales of wearables.
The Beijing-based company introduced a new line of wearables and IOT products at Thursday's SUV launch, including AI glasses and smartphones.
Write to Tracy Qu at tracy.qu@wsj.com
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