With every SU-7 Xiaomi will lose 10,000 Chinese Yuvan: Report

The latest entry of Xiaomi’s electric car- Speed Ultra 7 (SU7) has created a bitter-sweet feeling in the worldwide EV landscape. Within 24 hrs of launch, the company received more than 88,000 bookings pushing the company’s stock price to increase by 16% and making the company’s total valuation $55bn. The over-demand of the SU7 has made the waiting period of the car a minimum of 6 months.

However, the electric car starting at the price of $29000 will lead Xiaomi towards a loss of $10,000 for each car sold, citing City research, Firstpost reported. The report further said that by the end of the year, the company will lose 4.1Bn Yuan which is around US $56bn considering a sales of 60,000 units. 

Xiaomi which is known for its cheaper rates is able to sustain this loss because of the company’s $15Bn reserve and Bejing’s backing. The motive behind such a price rate is reported to be the company’s ambition to gain a strong foothold in the world EV market, however, right now the SU7 is only available in China. 

It is to be noted that the SU7 electric car is manufactured by a state-owned company– BAIC group and not Xiaomi itself. Beijing’s backing of the EV ecosystem has reportedly made China overcrowded in terms of EV making. Meanwhile, with state subsidies reducing and tax benefits declining China-based EV makers are looking towards the world as a potential market which has generated a threat of EV dumping. 

Showing concerns about EV dumping, US Treasury Secretary Janet Yellen said, “I'm concerned about global spillovers from the excess capacity that we are seeing in China.”

She further underlined the fact that there are now more EVs coming in the Chinese market than potential buyers.

As the Chinese presence in the EV industry continues to grow, another report indicates that one out of 4 EVs sold in Europe is reported to be made in China. 

Seeing India as the next-largest EV market, the Chinese companies are expected to expand their foothold in the Indian EV Market as well. Following the same pattern, BYD a China-based EV manufacturer is already aiming to gain 90% of the Indian EV market share by 2024.