Lei Jun, cofounder of Chinese smartphone giant Xiaomi, became $1.3 billion richer on Monday after the launch of the company’s first electric vehicle wowed the market.
The 54-year-old mogul, who derives most of his net worth from a Xiaomi stake, boosted his net worth to $13.8 billion, according to Forbes’ Real-Time Billionaires List. Shares of the Hong Kong-listed company surged as much as 16% on Monday, the first day of trading after investors returned from the Easter holiday break.
“The stock has received a boost from Xiaomi’s new energy vehicle,” says Kenny Ng, a Hong Kong-based securities strategist at Everbright Securities. “The initial orders have exceeded market expectations.”
Last week, Lei announced pricing for the much anticipated SU7 electric sedan, which will range from 215,900 yuan ($30,000) to 299,900 yuan. The company later said initial orders reached almost 90,000 units within the first 24 hours of the launch event. Some buyers are facing a wait that could stretch up to seven months before receiving their cars.
The pricing is quite competitive taking into account the features being offered, according to Yale Zhang, the Shanghai-based managing director of consultancy Automotive Foresight. During last week’s launch, Lei frequently compared the SU7, which is short for Speed Ultra, with Tesla’s Model 3. He also said the most expensive version can rival Porsche’s electric Taycan sportscar in terms of performance.
But Lei didn’t disclose any sales target. Zhang estimates that Xiaomi might deliver close to 100,000 this year. Everbright Securities’s Ng says delivering that many cars might be possible for Xiaomi, which is collaborating with state-owned automaker BAIC Group to manufacture the vehicles and is gradually boosting production.
Analysts say it is hard to predict whether the initial enthusiasm will be sustained, as the market is waiting for first consumer feedback. Lei, who has previously described the EV venture as his “last major start-up project,” is entering the market at a particularly challenging time.
After years of rapid growth, China’s EV sector is now facing overcapacity and an intense price war. The mogul himself acknowledged last week that the aggressive discounts rolled out by rivals including Tesla had played a factor in SU7’s pricing, which was lowered by about $4,000 to make the model stand out. Lei added that he wasn’t making money now with the EV business, but reaffirmed his commitment to eventually building a “dream car.”
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