Lei Jun, the co-founder of Chinese smartphone giant Xiaomi, saw a significant increase in his net worth after the successful launch of the company’s first electric vehicle, the SU7 sedan. The launch of the electric vehicle impressed investors, with shares of Xiaomi surging as much as 16% on the first day of trading after the Easter holiday break. Lei’s net worth rose to $13.8 billion, primarily due to his stake in Xiaomi, according to Forbes’ Real-Time Billionaires List.
The initial orders for the SU7 electric sedan exceeded market expectations, with nearly 90,000 units ordered within the first 24 hours of the launch event. The pricing of the vehicle ranges from 215,900 yuan to 299,900 yuan, which is considered competitive considering the features being offered. Xiaomi’s collaboration with state-owned automaker BAIC Group to manufacture the vehicles is gradually increasing production capacity to meet the demand.
During the launch event, Lei frequently compared the SU7 to Tesla’s Model 3 and suggested that the most expensive version could rival Porsche’s electric Taycan sportscar in terms of performance. While Lei did not disclose any specific sales targets, analysts estimate that Xiaomi might deliver close to 100,000 vehicles this year. However, it remains to be seen whether the initial enthusiasm from investors and consumers will be sustained as the market awaits first consumer feedback on the electric vehicle.
The Chinese EV sector is currently facing overcapacity and an intense price war after years of rapid growth. Lei acknowledged that aggressive discounts from rivals like Tesla influenced the pricing of the SU7, which was reduced by about $4,000 to make the model more competitive. Despite not making money from the EV business currently, Lei expressed his commitment to eventually building a “dream car.” An analyst suggested that Xiaomi’s collaboration with BAIC Group and gradual production increase could help the company meet consumer demand and navigate the challenges in the competitive EV market.
As Lei embarks on his “last major start-up project” with the electric vehicle venture, the success of Xiaomi in the EV sector remains uncertain. The market will be closely watching how the company navigates the challenges in the Chinese EV sector, especially with intense competition and pricing pressures. Analysts believe that consumer feedback and sustained demand will be crucial factors in determining the long-term success of Xiaomi’s electric vehicle venture. Despite the challenges ahead, Lei’s ambitious goals and commitment to building a competitive electric vehicle could set Xiaomi apart in the evolving EV market.
