Xiaomi Corp., known for its smartphones, is nearing a record high stock price due to its successful entry into the electric vehicle (EV) market. The company’s shares have more than doubled in 2023, surpassing global peers and defying the challenges faced by other smartphone makers. This surge is fueled by Xiaomi’s surprisingly strong performance in China’s competitive EV sector, where it challenges established players like BYD Co. and Tesla Inc.
From Smartphones to EVs
Investors are drawing parallels between Xiaomi’s current trajectory and its rapid ascent in the smartphone market. In 2011, Xiaomi launched its first smartphone and quickly grew to rival giants like Apple Inc. and Samsung Electronics Co., propelling founder Lei Jun to billionaire status. With Xiaomi’s Hong Kong-listed shares now approaching their 2021 peak, investors hope for a similar success story in the EV market.
Defying Market Trends
Xiaomi’s stock performance stands out amidst uncertainty in the global auto and smartphone markets. While Chinese EV startups like Nio Inc. and Li Auto Inc. grapple with demand concerns, Xiaomi has reported strong sales growth, driven by its new EV business. This success can be attributed to Xiaomi’s established brand reputation, marketing prowess, and popularity among young consumers.
The Rise of the “Dark Horse”
Shuyan Feng, deputy general manager for investment management at Huatai Asset Management (Hong Kong) Co., describes Xiaomi as a “dark horse” in the EV race. Initial skepticism surrounding Xiaomi’s ambitious $10 billion EV venture has dissipated as the company demonstrates its ability to compete effectively.
Looking Ahead
Xiaomi’s momentum is expected to continue with the upcoming summer launch of its next EV model, a pure electric sport utility vehicle (SUV). The company’s first EV, the SU7 sedan, has already exceeded expectations, with a projected 130,000 deliveries this year. Available in nine colors and equipped with smart driving features, the SU7 has resonated with consumers.
