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Chinese smartphone company Xiaomi delivers 20,000 SU7 EVs in October

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Chinese smartphone company Xiaomi on Tuesday announced a sports car version of its SU7 electric sedan would begin preorders for the equivalent of more than $110,000.

Luna Lin | Afp | Getty Images

BEIJING — China’s Xiaomi said Tuesday that it had delivered more than 20,000 SU7 EVs in October as it ramps up production for its electric car venture in a fiercely competitive market.

The Chinese company, which is largely known for its smartphones and home appliances, reiterated plans to deliver 100,000 SU7 vehicles by the end of November. Xiaomi first revealed plans to make cars in 2021 and began building a dedicated manufacturing plant the same year.

The company released the basic version of the SU7, its first car, in late March for about $4,000 less than Tesla‘s cheapest car — Model 3 — in China at the time. Tesla subsequently cut the car’s price by about $2,000. Xiaomi has delivered more than 75,000 SU7 cars to date, including October’s figures.

Chinese rivals Xpeng and Nio took about six years to produce 100,000 electric cars, while it took Tesla 12 years.

While Xpeng delivered a monthly record of more than 20,000 cars in September, with about half the sales owed to its newly launched, lower-cost brand Mona, Nio has struggled to keep monthly deliveries above 20,000 cars.

Zeekr, an electric car brand founded by automaker Geely, has claimed it produced more than 100,000 vehicles in 1.5 years. It delivered a record 21,333 cars in September.

Data on other Chinese electric car companies’ deliveries for October is expected Friday.

Tesla doesn't need a low-end vehicle to continue to grow, says Oppenheimer's Colin Rusch

“News of 20k deliveries in October confirms that [Xiaomi] is going to be a force to reckon with in the world’s largest EV market,” said Brian Tycangco, an analyst at Stansberry Research.

He said Xiaomi’s electric car gross profit margins in August were similar to Xpeng’s that month, and have likely improved since, given ramped up production.

Xiaomi on Tuesday also announced it was taking preorders for the high-end sports version, SU7 Ultra, starting at 814,900 yuan ($114,304), ahead of a product release in March 2025. The company claimed that within 10 minutes, it received more than 3,600 preorders, each requiring a 10,000 yuan deposit.

The new model and its touted achievements on the Nurburgring race track in Germany will likely help Xiaomi sell more of its premium SU7 Max car, which costs just 299,900 yuan, Citi analysts said in a report. They now expect Xiaomi to deliver 250,000 cars next year, up from 238,000 previously forecast.

Xiaomi claimed a prototype of the SU7 Ultra this week became the fastest four-door sedan to complete the German race track.

Citi analysts increased their price target on Xiaomi to 30.60 Hong Kong dollars ($3.94), up from 22.70 HK dollars. They also raised forecasts for the company’s smartphone shipments, following the launch of Xiaomi’s flagship Mi 15 device Tuesday — the first phone to use Qualcomm’s newest chipset.

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Tesla’s Model Y was the best-selling battery-powered electric car in China in September with 48,202 vehicles sold, according to data from Chinese car industry site Autohome. The Model 3 ranked 8th with nearly 24,000 cars sold.

BYD’s lower-priced models accounted for most of the other top 10 bestsellers in the battery-only category. Xiaomi’s SU7 ranked 17th last month with 13,559 cars sold, the data showed.

Xiaomi currently only sells its cars in China. The company told CNBC earlier this year it would take at least two to three years for any overseas launch.

— CNBC’s Sonia Heng contributed to this report.

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Trump win and threat of more tariffs raises expectations for more China stimulus

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Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019.

Aly Song | Reuters

BEIJING — Donald Trump’s 2024 presidential win has raised the bar for China’s fiscal stimulus plans, expected Friday.

On the campaign trial, Trump threatened to impose additional tariffs of 60% or more on Chinese goods sold to the U.S. Increased duties of at least 10% under Trump’s first term as president did not dent America’s position as China’s largest trading partner.

But new tariffs — potentially on a larger scale — would come at a pivotal time for China. The country is relying more on exports for growth as it battles with a real estate slump and tepid consumer spending.

If Trump raises tariffs to 60%, that could reduce China’s exports by $200 billion, causing a 1 percentage point drag on GDP, Zhu Baoliang, a former chief economist at China’s economic planning agency, said at a Citigroup conference.

China is very 'concerned' about the rhetoric around tariffs, says Longview's Dewardric McNeal

Since late September, Chinese authorities have ramped up efforts to support slowing economic growth. The standing committee of the National People’s Congress — the country’s parliament — is expected to approve additional fiscal stimulus at its meeting this week, which wraps up Friday.

“In response to potential ‘Trump shocks,’ the Chinese government is likely to introduce greater stimulus measures,” said Yue Su, principal economist at the Economist Intelligence Unit. “The overlap of the NPC meeting with the U.S. election outcome suggests the government is prepared to take swift action.”

She expects a stimulus package of more than 10 trillion yuan ($1.39 billion), with about 6 trillion yuan going towards local government debt swaps and bank recapitalization. More than 4 trillion yuan will likely go towards local government special bonds for supporting real estate, Su said. She did not specify over what time period.

Stock market divergence

Mainland China and Hong Kong stocks fell Wednesday as it became clear that Trump would win the election. U.S. stocks then soared with the three major indexes hitting record highs. In Thursday morning trading, Chinese stocks tried to hold mild gains.

That divergence in stock performance indicates China’s stimulus “will be slightly bigger than the baseline scenario,” said Liqian Ren, who leads WisdomTree’s quantitative investment capabilities. She estimates Beijing will add about 2 trillion yuan to 3 trillion yuan a year in support.

Ren doesn’t expect significantly larger support due to uncertainties around how Trump might act. She pointed out that tariffs hurt both countries, but restrictions on tech and investment have a greater impact on China.

Trump, during his first term as president, put Chinese telecommunications giant Huawei on a blacklist that restricted it from using U.S. suppliers. The Biden administration expanded on those moves by limiting U.S. sales of advanced semiconductors to China, and pressuring allies to do the same.

Both Democrats and Republicans supported the passage of those newer export controls and efforts to boost semiconductor manufacturing investment in the U.S., Chris Miller, author of “Chip War,” pointed out earlier this year. He expected the U.S. to increase such restrictions regardless of who won the election.

China has doubled down on bolstering its own tech by encouraging bank loans to high-end manufacturing. But the country had long benefited from U.S. capital as well as the ability to use U.S. software and high-end parts.

Republicans gained a majority in the Senate for the next two years, according to NBC News projections, though control of the House of Representatives remains unclear.

“If the Republican Party gains control of Congress, protectionist measures could be accelerated, amplifying impacts on the global economy and presenting significant downside risks,” Su said.

She expects Trump will likely impose such tariffs in the first half of next year, and could speed up the process by invoking the International Emergency Economic Powers Act or Section 122 of the Trade Act of 1974, which allows the president to impose tariffs of up to 15% in response to a serious balance-of-payments deficit.

U.S. data shows that the trade deficit with China narrowed to $279.11 billion in 2023, from $346.83 billion in 2016.

Su estimated that a 10% tariff increase on Chinese exports to the U.S. could reduce Beijing’s real GDP growth by an average of 0.3 to 0.4 percentage points in the next two years, assuming other factors remain constant.

China’s exports to the U.S. fell by 14% last year to $500.29 billion, according to customs data on Wind Information. That’s still up from $385.08 billion in 2016, before Trump was sworn in for his first term.

Meanwhile, China’s annual imports from the U.S. climbed to $164.16 billion in 2023, up from $134.4 billion in 2016, the Chinese data showed.

Other analysts believe that Beijing will remain conservative, and trickle out stimulus over the coming months rather than release a large package on Friday.

China’s top leaders typically meet in mid-December to discuss economic plans for the year ahead. Then, officials would announce the growth target for the year at an annual parliamentary meeting in March.

“China will likely face much higher tariff from the U.S. next year. I expect policy response from China to also take place next year when higher tariff is imposed,” Zhiwei Zhang, chief economist at Pinpoint Asset Management, said in a note Wednesday afternoon.

“I also don’t think the government will change the policies they already proposed to the NPC because of US election,” he said.

China’s growing global trade influence

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Stocks making the biggest moves after hours: QCOM, HUBS, LYFT, BMBL

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Stocks making the biggest moves premarket: TSLA, DJT, CVS, DLTR

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