GUANGZHOU, CHINA – NOVEMBER 15, 2024 – Visitors view the new energy Xiaomi SU7 Ultra at the 2024 Guangzhou Auto Show in Guangzhou, south China's Guangdong Province, November 15, 2024. (Image source should read CFOTO / Future Publishing via Getty Images)
kvoto | Future Publishing | Getty Images
China Xiaomi company The Japanese automaker said Monday it aims to deliver 130,000 electric vehicles this year, raising its forecast for the third time as the emerging automaker posted a 30.5% jump in third-quarter revenue.
The electronics maker raised its target from a previous target of delivering 120,000 of its first electric car, the SU7 sedan, as demand surges, CEO Lei Jun said on his social media account. This is also significantly more than the initial target of 76,000 cars it set when it launched the SU7 early this year.
Xiaomi launched the car, which takes design cues from Porsche, in March, entering the crowded Chinese electric vehicle market with an eye-catching price tag — less than $30,000 for the base model, $4,000 cheaper than a Tesla Model 3 in China.
Sales of electric and hybrid vehicles in China have grown to account for more than half of total sales in the world's largest auto market. In October, it grew 56.7% from a year earlier, marking the fourth consecutive month in which sales of battery-powered cars, including gasoline-powered cars, outsold gasoline-powered cars in the country.
To keep up with demand, Xiaomi has doubled production shifts since June and launched the premium SU7 Ultra model priced at over $110,000.
Xiaomi CEO Lu Weibing said on the post-earnings call that its factory has the capacity to produce 20,000 cars every month and that he still sees room for that to grow.
“Our investment is still very large and we continue to improve our hardware and software. Basically, it does not matter what the final delivery level is, we are still investing heavily. We are working on R&D (research and development) for new systems models,” he said.
He added that one of the areas that Xiaomi was working on was developing self-driving technology.
The car business is still operating at a loss
Revenue was 92.5 billion yuan ($12.77 billion) for the quarter ended September 30, beating the LSEG estimate from 15 analysts of 91.1 billion yuan.
Huatai Securities expects Xiaomi to deliver 400,000 electric vehicles in 2025 when electric vehicles grow to account for nearly a fifth of revenue from 8% for the year.
Although Xiaomi's automotive business is still operating at a loss. The unit posted an adjusted loss of 1.5 billion yuan during the quarter, with a gross profit margin of 17.1%.
During the quarter, Xiaomi maintained its position as the world's third-largest smartphone maker with shipments of 42.8 million units, up 3% and capturing 14% of the market, according to research firm Canalys.
The company plans to increase the number of offline retail stores in mainland China from 13,000 to 15,000 by the end of the year and 20,000 to next year, and is investing heavily in technology to grow its market share, Lu said.
Xiaomi reported adjusted net profit rose 4.4% to 6.25 billion yuan, versus consensus estimates of 5.92 billion yuan.
