- Company plans to introduce a premium variant, the SU7 Ultra, priced at over $110,000 while the SU7 is priced at less than $30,000.
- Xiaomi maintained its status as the world’s third-largest manufacturer, achieving a 3% increase in shipments, thereby capturing 14% of the global market.
Xiaomi Corp, the Chinese electronics powerhouse, has recently made waves in the automotive industry, reporting a significant 30.5 per cent increase in third-quarter revenue driven by consumer interest in its newly launched electric vehicle, the SU7 sedan.
Launched in March, this vehicle is conspicuously positioned in the highly competitive Chinese electric vehicle (EV) market, featuring design elements reminiscent of luxury brands such as Porsche and priced attractively under $30,000 for the base model.
This pricing strategy not only undercuts Tesla′s Model 3 in China by approximately $4,000 but also positions Xiaomi favourably as it seeks to expand its foothold in this burgeoning sector.
Doubling production
In light of the burgeoning demand for the SU7, Xiaomi has ambitiously raised its sales target for the year to 130,000 vehicles, significantly exceeding its original goal of 76,000.
To meet this heightened demand, the company has undertaken measures including doubling production shifts since June and introducing a premium variant, the SU7 Ultra, priced at over $110,000.
Competitive landscape
Despite these growth indicators, Xiaomi’s automotive division continues to face challenges, operating at a loss with an adjusted deficit of 1.5 billion yuan for the quarter and a gross profit margin of 17.1 per cent.
Quarterly results reveal that Xiaomi’s total revenue for the period ending September 30 reached 92.5 billion yuan ($12.77 billion), surpassing the consensus estimate from analysts.
Furthermore, the company’s adjusted net profit experienced a modest 4.4 per cent rise to 6.25 billion yuan, exceeding forecasts and underscoring its overall resilience in a competitive landscape.
Notably, in the smartphone segment, Xiaomi maintained its status as the world’s third-largest manufacturer, achieving a 3 per cent increase in shipments, thereby capturing 14 per cent of the global market.
According to projections from Huatai Securities, Xiaomi anticipates delivering 400,000 electric vehicles by 2025, anticipating that electric cars will contribute significantly to revenue, growing from 8 per cent this year to approximately 20 per cent.
The strategy emphasises Xiaomi’s commitment to diversifying its product offerings and consolidating its presence in the automotive sector.
As the company navigates the complexities of entering a saturated market, its continued innovation and adaptability will be crucial in determining its future success in the electric vehicle landscape.