Xiaomi has entered China's electric vehicle market with a blistering start, with the company touting 120,000 firm orders in 36 hours for its SU7 sedan, a Tesla Model 3 rival.
Xiaomi, a major Chinese handset maker, launched the much-anticipated sedan on Thursday, promising deep smart-car connectivity, fast acceleration and an aggressive price.
The 120,000 orders means the SU7 production capacity for 2024 is sold out.
Lei Jun, Xiaomi's founder, chairman and CEO, made it clear that the Tesla Model 3 is in sights.
"Many people ask me who the Xiaomi SU7 is built for. My answer is, isn't it time for Tesla Model 3 users to upgrade?" Lei said at Thursday's event.
The SU7 will start at 215,900 yuan ($29,901) vs. 245,900 yuan ($34,056) for the entry-level Model 3. Lei conceded that Xiaomi will lose money on every car sold.
Tesla gave a modest upgrade to the Model 3 late last year, but that didn't provide much of a sales boost.
The introduction of the Xiaomi SU7, along with other China EV makers such as Nio, XPeng and BYD rolling out cheaper, more-advanced models, poses new challenges for Tesla.
Tesla reportedly scaled back Shanghai production in March, which could continue through April.
Of course, Xiaomi's entrance poses a challenge to all China EV makers, who already face intense competition. Deep-pocketed Xiaomi, Geely and Huawei, along with low-cost giant BYD, makes it hard for money-losing Nio and XPeng to gain traction and move toward profitability.
Xiaomi says it may introduce an SUV later this year.
EV Sales Reports Due
Nio, XPeng and Li Auto will release March delivery figures on Monday. BYD will provide March and first-quarter sales data on Monday or Tuesday. Tesla is expected to report on Tuesday.
Li Auto recently slashed March delivery targets with Nio trimming its goals last week.
Analysts have slashed Tesla earnings and delivery targets, with many forecasts pegging Q1 deliveries around Q1 2023's 422,875, down sharply from Q4's record 484,507.
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