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China's Xiaomi will start delivery of its first EV vehicle, shares rise

Xiaomi founder and CEO Lei Jun talks during a ceremony introducing the company's first electric car (EV) SU7, in Beijing, China December 28, 2023

BEIJING, March 12 (mod1s) - China's Xiaomi (1810.HK), opens new tab announced on Tuesday it would start deliveries of its first electric vehicle (EV) model SU7 this month, stepping into the world's biggest car market amid a vicious pricing war. 

The smartphone manufacturer, China's fifth-largest, said in a Weibo post it has 59 outlets in 29 cities countrywide that will accept orders. A launch ceremony is set for March 28 when the new EV's sticker tag is likely to be unveiled.

Xiaomi's shares soared 7% during morning session. 

China's EV sales grew 18% in January-February, not too far from 21% growth predicted for all of 2023. This year has witnessed a wave of further price cuts driven by industry leader BYD (002594.SZ), opens new tab to entice customers despite waning domestic demand. 

At the launch of the Speed Ultra 7 (SU7) automobile in December, Chief Executive Lei Jun claimed Xiaomi aspires to become one of the world's top five manufacturers.

The SU7, Lei boasted, features "super electric motor" technology capable of providing acceleration speeds faster than Tesla (TSLA.O), opens new tab and Porsche's EVs. 

Analysts predict the car's same operating system with Xiaomi's popular phones and other electronic gadgets will appeal to the company's current consumers. 

Xiaomi has been attempting to expand outside its main business to EVs amid stalling demand for smartphones - a goal it originally revealed in 2021.

Its automobiles will be built by a subsidiary of state-owned manufacturer BAIC Group (1958.HK), opens new tab, at a Beijing facility with an annual capacity of 200,000 vehicles. 

The smartphone giant has vowed to spend $10 billion in automobiles over a decade and is one of the few new participants in China's EV sector to receive clearance from officials who have been wary to contribute to a supply glut.


Source: https://www.reuters.com/

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