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Xiaomi Stock Up 2%, Company Announces Plans to Mass Produce Electric Cars in 2024

UTC by Steve Muchoki · 2 min read
Xiaomi Stock Up 2%, Company Announces Plans to Mass Produce Electric Cars in 2024
Photo: Depositphotos

Xiaomi stock has dropped approximately 30%, and 14% in the past ten months and three months respectively.

Xiaomi Corp (HKG: 1810) stock traded around HK$ 23.00, up 2.22% as of October 20, 2021, 1.21 p.m HKST. The Chinese smartphone maker announced on Tuesday that it plans to mass-produce its electric vehicles by the first half of 2024.

According to Xiaomi CEO Lei Jun during the company’s investors day on Tuesday, $10 billion will go towards actualizing the mission in the next decade. The company joins other Chinese companies that are aligning themselves with the future EV market. Moreover, China is moving and advocating for cleaner energy away from fossil fuels.

As per the report by BloombergNEF, electric vehicles currently constitute 3% of global car sales. Further, the report projects that the number is expected to triple to around 10% by the year 2025, 28% by 2030, and 58% by 2040.

With batteries constituting 40% of the EV vehicles’ cost of production, Xiaomi seeks to work on a niche that will differentiate it from other market players. Furthermore, the Chinese market is getting jammed with emerging electric vehicles that seek to venture into the global market. Mind you, the Chinese government has significantly incentivized industries seeking to venture into the electric vehicle industry.

Nevertheless, the level of competition calls for companies to innovate further, particularly on batteries, and bring prices down to match global markets. For instance, the cheapest Tesla model 3 goes for approximately $51,490 with the model s plaid tri-motor all-wheel-drive going for $123,740.

In order to reach more people globally, EV vehicles will have to be standardized and brought down significantly in the years ahead.

Xiaomi Stock and the Market Outlook

According to market analytics provided by MarketWatch, Xiaomi stock has dropped approximately 30%, and 14% in the past ten months and three months respectively through Tuesday. Nevertheless, according to 33 analysts surveyed by MarketWatch, Xiaomi stock is very bullish on the long term perspective.

Consequently, they all gave an average rating of Buy. Notably, the company has a market capitalization of HK$ 535.7 billion. Its quest to venture into the electric vehicle industry is to diversify and widen its revenue collection avenues.

The company registered its electric vehicle business unit dubbed Xiaomi EV last month. The company noted that the business unit already has 300 employees. As the Chinese electric market grows, analysts expect 1.9 million EV cars to be sold this year in China. Representing growth of 51% year over year.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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