- ORIGINAL NEWS
China’s Xiaomi is selling more EVs than expected, raising hopes it can break even sooner
- SUMMARY
Xiaomi, a renowned smartphone manufacturer, has ventured into the electric vehicle market with its SU7 sedan, and it’s making waves.
Contrary to initial estimates of selling at a loss, Xiaomi’s new car has surpassed expectations, bringing the company closer to profitability while still undercutting the price of Tesla’s Model 3.
Xiaomi’s CEO, Lei Jun, revealed that the company has received over 70,000 orders for the SU7 as of April 20, nearly reaching its initial target for the entire year.
The company now aims to deliver 100,000 units of the SU7 in 2023, which is an ambitious goal given the competitive electric vehicle market.
Analysts believe that breakeven for Xiaomi’s auto business can be achieved if annual sales reach between 300,000 and 400,000 units.
The company has aggressive growth plans, with projected shipments of 200,000 and 280,000 units in 2024 and 2026 respectively.
Despite initially estimating a loss on each SU7 sold, Lei now projects a gross profit margin of 5 to 10% for the auto business.
This positive outlook is attributed to strong sales and the cooperation of suppliers in reducing costs.
Lei emphasized that Xiaomi will focus solely on the domestic market for the next three years, capitalizing on its established brand presence and loyal customer base.
The company also hinted at an upcoming SUV model scheduled for release in the second half of 2025 but declined to provide further details.
Xiaomi’s entry into the electric vehicle market is a bold move, considering the dominance of established players like Tesla.
However, with Xiaomi’s strong smartphone sales, dedicated electric vehicle production facility, and ambitious plans, the company is well-positioned to disrupt the industry and become a major player in the global electric car market.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“Xiaomi’s new electric vehicle is selling better than expected, putting it closer to break-even despite undercutting Tesla’s Model 3 on price.”
“Xiaomi has received more than 70,000 orders for its electric SU7 sedan as of April 20, close to the company’s original full-year target for deliveries this year, CEO Lei Jun told investors Tuesday.”
Negative
“Tesla’s gross margin has successively declined over the past five quarters to 17.4% in the first three months of this year.”
“The Citi analysts raised their autos segment gross profit margin forecast to 6% this year, versus a 10% loss previously expected.”