Just when the auto industry was struggling with BYD’s rapid growth, Chinese smartphone company Xiaomi entered the market, vowing to overtake Tesla and become a global player. Despite Apple discontinuing development of its electric self-driving car this year, Xiaomi founder and CEO Lei Jun said that making the car was not only his last legacy project, but also propelled the company into the top five. In the next 20 years, one of the automakers has vowed to become a product that will change the world. Xiaomi’s Hong Kong-listed shares soared to a two-year high last week after the company launched the SU7, an electric sedan that costs about $4,000 less than Tesla’s Model 3 and has similar technology features. . Widespread attention from analysts In recent days, Xiaomi has attracted widespread attention from analysts in the automotive and high-tech industries, beyond those who previously covered it as just a smartphone market. “This is an attractive partnership candidate as legacy Western auto companies seek ways to achieve greater scale, improve capital discipline and lower execution risk,” said Morgan Stanley Automotive Analyst Adam Jonas. Xiaomi should be added to the list of talented Chinese auto and high-tech companies that have the potential to become Be careful on Thursday. Meanwhile, Tesla last week revealed that deliveries in the first quarter were down compared to the same period last year. Excluding the coronavirus, this is the first time Tesla vehicle deliveries have declined since 2012, Jonas said. Although he still likes Tesla long-term, he and his team will be hosting a client webinar on Xiaomi, Tesla, and EVs around the world on Tuesday. “If Xiaomi can continue to outperform its competitors, [driver assist] Morgan Stanley Greater China tech hardware analyst Andy Meng reiterated the bank’s overweight rating on Xiaomi and its price in a note on Monday. The target price is HK$17.50 ($2.24). Xiaomi stock soared last week to almost reach that price. The stock later regained much of that gain and is now little changed since the beginning of the year. Meanwhile, Tesla stock is down 34% since the beginning of the year. Xiaomi announced on Wednesday that it had received more than 100,000 orders for the SU7, of which more than 40,000 have already been confirmed and are not subject to cancellation, and held a ceremony to celebrate the first deliveries on the same day. Most customers face wait times of nearly six months or more, according to Xiaomi’s online sales platform, said Taylor Organ, CEO of Shenzhen-based Snow Bull Capital. ) said they are keeping a close eye on how consumers actually like to drive their cars. Promises to purchase Xiaomi stock. “I don’t think it’s going to be a particularly good outcome for the stock price.” [in] The next two quarters,” he said in an interview Friday. “Then it could be a cash cow. This is what all the avid users of the Xiaomi ecosystem need.” A few months before the car launch, Xiaomi announced a new operating system called HyperOS, It announced a strategy to connect consumers with their homes and cars. The company derives most of its revenue from smartphones. During the recent launch of his SU7, Xiaomi CEO Lei touted that connected lights and home appliances could automatically turn on in advance when drivers approach their homes. Organ said that such an ecosystem offers “a built-in recurring revenue model that every CEO dreams of,” and “on top of that, you also get subscriptions,” so he sees a low chance that SU7 will fail. , he said. “If the car doesn’t meet expectations, it will be difficult for Xiaomi to recover. Xiaomi is trying to build its own ecosystem, but the company also supports Apple’s CarPlay system and iPad. I believe in the results.” [of Xiaomi’s EV market entry] “ICE brands and products will be the main losers as BEV/NEV adoption accelerates in China,” Nick Lai, head of China equity research and Asia Pacific automotive research at JPMorgan, said on Monday. stated in the memo. Awareness and cash Xiaomi’s advantages include existing brand recognition in China and his 110 billion yuan ($15.7 billion) of cash on the balance sheet to help the company weather short-term price wars. It will be. According to the report, Lei said that although Xiaomi is currently producing cars in the red, it is investing in its own factories to expand production, and that the facilities are still fully operational. It is not clear whether the factory will be operational, but Lei claimed last month that the factory could be operational. “Xiaomi also showcased its EV factory with highly automated production lines for key processes (painting, stamping, die-casting, body assembly, etc.) backed by smart manufacturing expertise.” In a separate note, JPMorgan technology analyst Gokul Hariharan said he believes advanced automation will accelerate EV profitability over the medium to long term. The bank is overweight on Xiaomi, with a price target of HK$21.00 US Treasury Secretary Janet Yellen on Friday highlighted concerns about China’s overcapacity. This is about 35% above the stock’s closing price on Friday. “Xiaomi currently sells smartphones around the world, but not in the United States.”
Xiaomi enters China’s EV market in direct competition with Tesla
