Xiaomi Corp. has set an ambitious goal to deliver 120,000 units of its SU7 electric vehicle (EV) this year, raising its target for a model that aims to compete with industry leaders like Tesla Inc. and drive the company’s broader strategic ambitions.
President Lu Weibing announced this revised target following Xiaomi’s impressive quarterly revenue growth, the fastest in over two years, signaling a recovering smartphone market. The company reported a 27% revenue increase to 75.51 billion yuan ($10.4 billion) for the March quarter, surpassing average estimates by approximately 2.7%.
Strategic Expansion into the EV Market
Xiaomi’s enhanced target reflects the confidence of its billionaire co-founder, Lei Jun, in the company’s $10 billion venture into the competitive electric car market. The SU7, unveiled in late March, initially had a delivery expectation of over 100,000 vehicles. By the end of April, orders for the SU7 series had nearly reached 90,000. On Thursday, Lu announced that Xiaomi is on track to ship 10,000 SU7 units in June, matching the volume sold during the first 43 days of sales. This progress supports their higher annual goal of 120,000 units.
Diversification Amid Smartphone Market Challenges
Xiaomi, which generates more than 60% of its revenue from smartphones, is diversifying due to sluggish demand in its primary market. Despite a 1% decline in net income to 4.2 billion yuan for the March quarter, the company noted signs of a gradual recovery in the mobile sector both in China and globally. Smartphone unit shipments grew nearly 34% last quarter, narrowing the gap with market leaders Samsung Electronics Co. and Apple Inc. Apple’s global iPhone shipments fell more than anticipated due to weaker sales in China.
Future Prospects and Strategic Goals
Xiaomi is also developing a sport utility vehicle similar to Tesla’s Model Y, with plans to begin sales as early as 2025, according to sources familiar with the matter. Bloomberg Intelligence analysts Steven Tseng and Sean Chen predict that Xiaomi’s EV business could contribute a mid-to-high single-digit percentage of the company’s revenue by 2024.
By the end of 2024, Xiaomi aims to establish a network of 219 sales stores across 46 cities, enhancing its market presence and sales capacity.
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