This week, markets will turn their attention to Tesla’s (TSLA) Q1 delivery report. The stock is one of the worst-performing companies on the S&P 500 (SPY). It lost 29% in Q1. The firm has more to worry about than recent delivery data. Xiaomi, a Chinese smartphone giant, launched an electric vehicle last week.
Xiaomi’s incredible success in the smartphone market suggests that’s new EVs will take Tesla’s market share. The company previously competed successfully against Apple (AAPL). Now, Co-Founder and CEO Lei Jun may repeat his strategy in the EV market globally.
Xiaomi introduced the SU7 car after three years of development. To build a meaningful market share quickly, the firm is willing to lose money for every unit sold. Those losses are nothing new. Lucid (LCID) and Rivian (RIVN) lose money, too. However, the SU7 has a better range than the Tesla 3. More importantly, it will sell at a lower price in China.
Xiaomi required the Chinese government’s support to have a complete EV product in three years.
The next phase of Xiaomi’s EV growth is a premium version that competes with Porsche. Once it establishes a strong reputation with the SU7, Xiaomi will promote the higher-end, luxury vehicle.
Tesla fans will watch Xiaomi closely. Last week, domestic firms like XPeng (XPEV) and NIO slumped ahead of the SU7 unveiling. BYD and Li Auto (LI) stock also fell.
