BEIJING, April 2 (Reuters) – Xiaomi, the Chinese electronics giant, witnessed a remarkable surge in its shares, up by as much as 16% on Tuesday, following the recent launch of its sleek electric vehicle. Despite forecasts of a per-car loss nearing $10,000 for the year, Xiaomi’s debut into the automotive world drew substantial attention, marking a significant milestone for the company.

The unveiling of Xiaomi’s inaugural electric vehicle, named SU7 – an abbreviation for Speed Ultra 7 – catapulted the company’s stock to its highest point since January 2022. Boasting design elements inspired by Porsche, the SU7 sparked investor enthusiasm, boosting Xiaomi’s market value by $4 billion in a single trading day.

Notably, Xiaomi’s valuation soared to $55 billion, surpassing that of established U.S. automakers like General Motors and Ford. The SU7’s aggressive pricing strategy, starting at under $30,000 for the base model, places it competitively against Tesla’s Model 3 in the Chinese market.

Entering a fiercely competitive EV landscape in China, Xiaomi faces challenges including an intense price war and a shift in consumer demand. However, analysts remain optimistic, citing Xiaomi’s robust financial position and expertise in smartphone technology, particularly in developing smart dashboards, a sought-after feature among Chinese consumers.

Demand for the SU7 is evident, with potential buyers facing wait times of four to seven months. In just 24 hours post-launch, Xiaomi received an impressive 88,898 pre-orders for the vehicle, signaling strong market demand.

Despite expectations of initial losses, Xiaomi remains committed to its automotive venture, with CEO Lei Jun expressing confidence in the company’s long-term vision. Lei envisions Xiaomi becoming one of the top five automakers globally within the next two decades.

Emphasizing the integration of smart technology, the SU7 promises not only high performance and extended range but also seamless connectivity with smartphones and home appliances. Lei highlighted features such as remote communication with delivery personnel, positioning Xiaomi as a comprehensive lifestyle brand.

Tu Le, founder of Sino Auto Insights consultancy, views Xiaomi’s foray into automobiles as a strategic move to further embed its products into consumers’ lives. Leveraging its reputation in technology, Xiaomi aims to establish itself as a key player in the automotive industry, though challenges lie ahead as it navigates the complexities of car manufacturing.

As Xiaomi ventures into uncharted territory, its journey in the automotive sector will be closely watched, with analysts anticipating adjustments and innovations along the way. While the road ahead may pose obstacles, Xiaomi’s blend of technological prowess and consumer-centric approach positions it as a formidable contender in the evolving landscape of electric vehicles.