Tesla (TSLA) Defies Odds: Stock Climbs as Xiaomi Throws Down EV Gauntlet
Tesla's stock just pulled a classic 'hold my circuit board' move—gaining ground even as Chinese tech giant Xiaomi revs up its EV ambitions. Who said competition kills margins?
Wall Street shrugs off new rival
While legacy automakers sweat the Xiaomi threat, TSLA investors are treating the news like Elon treats SEC subpoenas—with glorious indifference. The stock's upward crawl suggests either irrational exuberance or secret battery tech. Place your bets.
The EV paradox: More players, higher valuations
Funny how Tesla's premium grows as the field gets crowded—like watching crypto bros FOMO into an altcoin after its 10th competitor launches. Maybe markets finally understand that EV adoption isn't a zero-sum game... or maybe we're all just riding the hype train straight to Valuetown.
One thing's certain: When your stock climbs on competitor news, you're either playing 4D chess—or the shorts got liquidated again. *Cough* $25B market cap swing *cough*. Stay tuned for the next episode of 'As the Volatility Turns'.
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The YU7 from Xiaomi is specifically targeted to take on Tesla, reports note, and is a “luxury SUV” that has one major advantage: its price. The YU7 boasts a price tag of 253,500 yuan, which compares favorably against the Model Y, which is priced at 263,500 for its base model in China. Earlier analyst reports suggested that the YU7 WOULD be priced between 250,000 and 320,000 yuan, so Xiaomi has clearly brought the YU7 in at the lowest part of the range.
Further, analysts are looking for the YU7 to sell between 300,000 and 360,000 units annually. That may be a bit of a stretch given reports of economic trouble in China, but considering the sheer size of China’s population, it may find enough sufficiently well-heeled buyers to buy in at those rates. This is not the first time that Xiaomi has beaten Tesla in a battle of price tags, either; the SU7 sedan came in below the cost of Tesla’s Model 3. Further, reports noted, Xiaomi can match or beat Tesla on several metrics, with the major exception being driver assist technology.
An Electric Clown Car of Competition
But that is not all; as it turns out, four competitors are poised to take on Tesla in China just in the next month. There is the YU7, of course, but beyond that, Xpeng (XPEV) will roll out the G7 starting in the first week of July. Further, Nio (NIO) will come out with its Onvo L90, and Li Auto (LI) will complete the list with its i8 all-electric SUV.
Certainly, Tesla will have quite a fight on its hands here. With a growing panoply of competitors taking aim at Tesla’s markets share, and economic conditions in China being, well, less than optimal, making sales anywhere is likely to be a tall order. With a growing number of companies going after a pie in open decline, it is perhaps the most challenging of sales environments right now. The European sales plunge, meanwhile, is not helping Tesla’s overall look any.
Is Tesla a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 14 Buys, 12 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. After a 65.92% rally in its share price over the past year, the average TSLA price target of $287 per share implies 12.62% downside risk.
Disclosure
