Xiaomi (OTC:XIACF) last week entered the fiercely competitive Chinese electric vehicle (EV) market with the debut of its first EV, the SU7, announced just ahead of the Easter holiday.
The launch featured the base SU7 model at a price of 215,900 yuan ($29,870), with the more premium Pro and Max variants priced at 245,900 yuan and 299,900 yuan, respectively.
Following this announcement, Xiaomi's stock jumped by 9% on Tuesday in Hong Kong, the first day of trading post-holiday.
In their comments on the launch, Morgan Stanley analysts called the SU7 launch “a success,” citing “extraordinarily strong” sales volume. In the first 24 hours, total orders for the new EV surged to 88,898, “which is higher than our full-year base-case assumption and nearing our bull-case number,” analysts said.
“While customers are allowed to change their minds within seven days and thus final orders have yet to be confirmed, we believe the popularity confirmed that end users are satisfied with Xiaomi's vehicle design and "Smartphone+EV+AIoT" concept,” analysts wrote.
“We also believe the disruption force is unfolding as Xiaomi EV comes late vs. other competitors but has received very positive market feedback thanks to its customer-oriented innovations.”
Analysts also pointed out that early customer feedback indicates a positive reception to the driving experience of Xiaomi's SU7.
For that reason, Morgan Stanley notes that in the near term, the focus will be on enhancing production, distribution, and service capabilities. Over the long term, sustained innovation is seen as key to the company’s differentiation in the market.