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(Bloomberg) — Xiaomi Corp.’s shares had their biggest intraday jump in more than a year after the company announced it will start selling its long-awaited electric vehicles this month.

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The Beijing-based electronics firm, best known for its smartphones, has made a multibillion-dollar bet on breaking into the red-hot contest in China’s EV market led by Tesla Inc. and BYD Co. It will offer its SU7 series for purchase on March 28 in 29 cities, the company said in a Weibo post, without disclosing pricing. Its shares rose as much as 9.9% in Hong Kong after the news.

The crowded EV arena has grown less attractive in recent times, as Tesla and BYD are locked in a price war to woo Chinese consumers and the rest of the industry sees margins eroding and growth slowing. Apple Inc. recently canceled its long-incubating EV project, after failing to overcome challenges in adapting its technological expertise to a whole new field of manufacturing.

Xiaomi’s foray into carmaking, led by billionaire co-founder Lei Jun, will have to succeed where Apple did not. Initiated three years ago, the EV endeavor is Lei’s final entrepreneurial bet and arguably even more challenging than building a smartphone maker from scratch. Xiaomi’s main business is in online sales of high-specification, low-price handsets, but Lei has said the company’s EV will not be a budget proposition.

What Bloomberg Intelligence Says

Xiaomi’s plan to start selling its first EV on March 28, announced by CEO Lei Jun on Weibo, could boost sales by up to 4% this year and may become a long-term growth driver. Pricing would be crucial amid strong competition with BYD, Nio and Li Auto. We expect an average price of 220,000-260,000 yuan and first-year volume of 30,000-50,000 units.

— Steven Tseng and Woo Jin Ho, BI analysts

The Chinese firm has partnered with state-owned Beijing Automotive Group Co. for the new EVs, to avoid extending the protracted wait for a manufacturing permit from domestic regulators. The SU7 vehicles are entering a tough market, as state reimbursements for EV buyers of as much as 60,000 yuan ($8,400) ended in 2022.

The SU7 name stands for Speed Ultra, and the vehicles can go from 0 to 100kmh in 2.78 seconds, Xiaomi said.

–With assistance from Jessica Sui.

(Updates with analyst comment)

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