Xiaomi's YU7 car officially launched, starting price of 253,500 yuan
Initial orders have exceeded 290,000, dominating social media topics
Xiaomi's stock price hits a record high, competitors' stock prices decline
Analysts say initial orders exceeded expectations, production capacity remains the biggest constraint on sales
Author: Lin Yuhan
Reuters Beijing, June 27 - China's Xiaomi Corporation (1810.HK) has made a strong start with the launch of its latest YU7 car, securing over 289,000 pre-orders within the first hour of sale, demonstrating the market's immense enthusiasm for this SUV (Sport Utility Vehicle) that competes with Tesla's (TSLA.O) Model Y. Xiaomi's stock opened up 8% on Friday, reaching a historic high of HKD 61.5 at one point.
The explosive launch of the YU7 is expected to impact sales of Tesla and other domestic Chinese automakers, as the Chinese SUV market centered around the Model Y is one of the most fiercely competitive segments. While Xiaomi's stock surged, the stock prices of most new energy vehicle companies listed in Hong Kong fell, with XPeng (9868.HK), which is set to release a similar competitor next week, dropping by 5.5%.
&#34;The YU7 is selling like hotcakes, even though the pricing is higher than we expected,&#34; said analysts from investment bank Jefferies in a report, noting that the initial order volume for the YU7 is at an exceptionally high level, which is a positive surprise that confirms Xiaomi's high cost-performance value proposition and strong ecosystem synergy.
Xiaomi held a press conference on Thursday to officially launch its first SUV – the Xiaomi YU7, with the standard version priced starting at 253,500 yuan, which is 10,000 yuan cheaper than Tesla's refreshed Model Y rear-wheel drive version; the YU7 Pro is priced at 279,900 yuan, and the Max version is priced at 329,900 yuan.
Within just three minutes of the launch, Xiaomi announced that YU7 pre-orders had surpassed 200,000; within one hour, pre-orders exceeded 289,000. According to Xiaomi's chairman Lei Jun after the press conference, out of the 196,000 pre-orders in the first two minutes, 122,000 were confirmed orders. Based on this, the order confirmation rate is approximately 60%.
It is important to note that Xiaomi's definition of pre-orders is more lenient compared to other automakers. Users need to confirm their orders after paying a deposit of 5,000 yuan to enter the production queue and wait for delivery. During the pre-order period, users can still cancel their orders within a seven-day &#34;hesitation period.&#34;
Additionally, Xiaomi offers a transfer service for orders of the SU7 model, which means that a certain number of existing SU7 users will be included in the YU7 data announced by Xiaomi, and the sales of the SU7 will be partially affected.
Xiaomi executives revealed at a performance meeting in late May that the number of users who left their personal information after the YU7 technology release was three times that of the SU7 during the same period, with 60% being first-time users. Lei Jun stated on Weibo, &#34;I expect the YU7 to be as popular as the SU7.&#34;
During the three-hour &#34;Human-Vehicle-Home Ecosystem Launch Event,&#34; Xiaomi also introduced new products such as AI glasses and air conditioners, which, along with the YU7 and Lei Jun himself, once again dominated the trending topics on Chinese social media, with excited prospective car owners sharing order screenshots in their friend circles
Including firms like Jefferies, Deutsche Bank, and JP Morgan, multiple investment banks have recently predicted that the delivery volume of the YU7 this year will be around 100,000 units, while the delivery volume for all models of Xiaomi cars is forecasted to be around 360,000 to 400,000 units, which has already exceeded Xiaomi's own sales guidance of 350,000 units.
Intense Competition
In addition to the Model Y, the 200,000 to 300,000 SUV market is also crowded with competitors such as ZEEKR 7x, the Huawei-supported Aito R7, XPeng G7, and Avita 07. In the Chinese SUV market, consumers have become accustomed to many standard features such as fast charging and large batteries, as well as advanced intelligent driving. Manufacturers still need to significantly shorten product cycles and drastically compress automotive profit margins to secure a place in this fiercely competitive segment.
Earlier on the day of the YU7's launch, the Aito brand announced a more aggressive promotional campaign, which includes cash subsidies of up to 20,000 RMB. However, this promotional activity posted on Weibo is currently no longer visible.
XPeng's Hong Kong stock fell by as much as 5.5% during trading on Friday, as the company is set to release the similarly positioned G7 model next week. Nio (9866.HK), Geely Automobile (0175.HK), and BYD's Hong Kong stock (1211.HK) saw declines ranging from 1.1% to 2%.
However, in the early stages of the launch, the limiting factor for Xiaomi's car sales remains production capacity, which may provide some relief to other mature brands with ample capacity. The Xiaomi Car App indicates that the YU7 will begin its first user deliveries in August. Some &#34;quasi-in-stock&#34; vehicles can be delivered to urgent buyers within 1 to 5 weeks, and this portion of models is currently showing as sold out.
JP Morgan analysts pointed out that although the demand for the YU7 exceeds expectations, the positive stimulus for Xiaomi's delivery volume this year is likely to be limited. The second phase of Xiaomi's automotive factory is expected to be operational by mid-year, while the third phase has only recently secured land. The bank's forecast for Xiaomi's annual delivery volume is 360,000 units, maintaining a &#34;neutral&#34; rating on the stock with a target price of HKD 60 per share.
Xiaomi's electric vehicle business segment achieved revenue of 18.6 billion RMB in the first quarter, with smart electric vehicle revenue at 18.1 billion RMB, a segment gross margin of 23.2%, and an operating loss of 500 million RMB. The company expects its automotive business to become profitable in the third and fourth quarters of this year. (End)
(Reviewed by Wu Yunling)

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Xiaomi YU7 car officially launched, starting price of 253,500 yuan, with over 290,000 orders on the first day, and the stock price reached a historic high of HKD 61.5. This model is positioned against Tesla Model Y, and the market response is enthusiastic, expected to impact Tesla and other competitors' sales. While Xiaomi's stock price rises, the stock prices of new energy vehicle companies generally decline. Analysts believe that the initial order volume of YU7 exceeds expectations, demonstrating Xiaomi's high cost-performance ratio and strong ecological synergy capabilities

- Xiaomi's YU7 electric vehicle launched with a starting price of 253,500 yuan, receiving over 289,000 initial orders within an hour.  
- The strong demand has positively impacted Xiaomi's stock, reaching a record high, while competitors like Xpeng saw declines.  
- However, production capacity remains a significant constraint on sales, with deliveries expected to begin in August.

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"Overview" Xiaomi YU7 car starts strong with nearly 300,000 orders, as stock price hits a peak, "rivals" face setbacks