Tesla rival Xiaomi officially launched its Model Y killer on Thursday, and reportedly secured more than 200,000 orders in the first three minutes the vehicles was available, adding pressure to Tesla in the highly competitive Chinese EV market.
Meanwhile, Chinese robotaxi leader Hesai Group soared nearly 20% on Thursday. Tesla launched a limited robotaxi ride-hailing service in Austin, Texas, on Sunday.
Xiaomi made its YU7 crossover vehicle available to be ordered on Thursday, which was earlier than previously expected. The electric vehicle and smartphone producer first unveiled the vehicle on May 22, adding another vehicle option in China's crowded EV lineup.
The vehicle is a direct competitor to the Tesla Model Y and local media reported that Xiaomi received more than 200,000 orders in minutes following the vehicle being available. The company has also priced the YU7 at around $35,360, slightly lower that the $36,760 price tag on the Model Y.
Tesla's China Competition
Xiaomi EV is the China-based smartphone giant's electric vehicle unit and the YU7 will be the company's first EV SUV. Xiaomi officially launched its first model, the SU7, on March 28, 2024, which targeted Tesla's other China EV, the Model 3. The SU7 has outsold the Model 3 in China for several months and has a large backlog.
Jefferies analyst Edison Lee wrote Thursday that Xiaomi's new electric SUV "seems to be selling like hotcakes" despite slightly higher pricing than the firm expected. YU7 demand is "certainly stronger than expected." Lee added that he believes the Model Y is the main target of YU7, and thus it expects the new SUV will be able to take market share from the Model Y.
On the autonomous vehicle side of things, China-based Hesai develops and manufactures light detection and ranging (or lidar) products, primarily for the automotive and robotics industries. Hesai is a leading supplier of lidar sensors for the autonomous-vehicle and robotaxi markets. Tesla Chief Executive Elon Musk has consistently said lidar is not needed for fully autonomous self-driving vehicles.
Hesai was the IBD IPO Stock Of The Week on June 13.
Tesla Bull Rings Warning Bells
"A year ago, when Xiaomi launched the SU7, many of our clients thought it looked like a Porsche, had better tech than a Tesla M3 and was priced like a used VW iD3," Morgan Stanley analysts Adam Jonas, a longtime Tesla bull, and Andy Meng wrote in late May. "With the YU7 small SUV, they may have done it again. It looks like a Ferrari Purosangue or Aston Martin DBX but will be priced like a VW or low-spec Model Y."
At the time, Jonas added that this Xiaomi vehicle "explains why TSLA is moving away from 'car' and going all-in on autonomy."
"The YU7 is just the latest sign that Chinese tech firms are taking EV performance and cost to the next level. China may have already won the EV battle. Who can win the autonomy war?" Jonas wrote.
China EV Stocks
Tesla stock declined 0.6% to 323.79% during Friday's stock market, after falling 0.5% to 325.78 on Thursday. TSLA has given back most of Monday's 8.2% jump, driven by bulls cheering the limited robotaxi launch.
Xiaomi's U.S. shares rose nearly 10% to 39.48 on Thursday on the YU7 release. That left the stock extended above a 35 cup-with-handle buy point. Shares fell 4% on Friday.
Among other China EVs, BYD declined 1.4% on Friday. XPeng gained about 1% in stock market action on Friday.
Li Auto fell 2% and Nio gained 1.3% in stock market trade. Zeekr tilted about 1% lower on Friday
Hesai stock soared 19.3% to 23.10 on Thursday but retreated around 4.8% during Friday's stock market. Shares ended Thursday in a buy range above the entry for a deep cup with handle at 22.77, the May 22 high, according to MarketSurge charts.
The autonomous driving play has a perfect 99 Composite Rating. The stock also has a 99 Relative Strength Rating and an 80 EPS Rating.
Investors can keep tabs on the IBD Leaderboard watchlist, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
Tesla stock has a 68 Composite Rating, an 87 Relative Strength Rating and a 59 EPS Rating.
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