Xiaomi Corp raised its electric vehicle (EV) delivery target for 2025 to 350,000 cars. It comes off the back of the firm’s fastest revenue growth since 2021, highlighting its bold debut in the Chinese EV race. Addressing the matter on Weibo, tech giant based in Beijing revealed co-founder Lei Jun that the company has made much progress in expanding its EV production capacity and mentioned that it started deliveries for the Su7 sedan in April 2024.
Sales jumped 49% in the December quarter to 109 billion yuan ($15.1 billion), beating market estimates, as the company’s financial results for the period revealed. That performance underscores the early success of Xiaomi’s next venture in the car market, an arena traditionally dominated by incumbents such as Tesla Inc. and BYD Co.
Increasing production capacity, and honouring delivery schedules
But sales figures are not seized with the only dilemma of Xiaomi, either. These production bottlenecks have resulted in the company having long wait times, as customers don’t have much choice. Xiaomi had promised to increase its manufacturer site to eliminate these issues, resulting in faster production. It also has a second phase of its auto factory in Beijing that’s under development.
The firm also has a large order backlog and will need to keep opening production sites, Chief Financial Officer Alain Lam said on Bloomberg Television. The company had continued to look at new production sites in order to satisfy increasing demand, he said. He did not reveal any specifics on the current production capacity.
Market Reaction and the Price Tag
Xiaomi fell on Wednesday after the company launched a new EV with the expectations it needed to meet. The company’s stock, which recently rocketed higher, is expensive compared to large Chinese internet competitors such as Alibaba Group Holding Ltd. and Tencent Holdings Ltd. This lofty valuation is going to create high bars for the company’s performance over the next year.
Hype around the SU7 sedan—the car made waves earlier this year when Xiaomi weirdly bragged about putting its focus on a “chip-to-drive” strategy—has led to surging valuations of the company, amid continued hope among investors that it might disrupt the EV market. Earlier this year, Lei Jun said he was aiming for deliveries of 300,000 cars for fiscal 2023 as part of an effort to broaden the company’s income streams beyond a heavy dependence on mobile phones and connected home gadgets.
Outcome: Future of Competition and Future Models
Xiaomi last year announced plans to launch new SUVs to rival the likes of Tesla Model Y, with the next model set to be unveiled in summer. Liu also said in March the company plans to increase the overseas footprint of its automotive business, with exports targeted by 2027.
The company, 42 years old, also plans to reorient its strategy in EV market as it struggles to maintain its position as a leading consumer electronics player amid growing competition in that sector from Apple and Huawei Technologies Co.
Shipments of phones from rival Xiaomi rose by 4.8% in the last quarter, industry consultancy IDC has said. This increase is both a reflection of the ongoing recovery in the smartphone market and the market share it has taken from competitors including Apple and Samsung.
“The last quarter was exceptional for the biggest Chinese smartphone vendors,” Francisco Jeronimo, a vice president for EMEA client devices at IDC, said in a statement. “They achieved a milestone, shipping a record total volume in a quarter — and 56% of the world’s total smartphone volumes.
It has been revealed that Chinese smartphone manufacturers are dominating the world. They are expanding the EV business and Xiaomi’s long-term success will depend on its ability to capitalise on this trend. With its dual focus on consumer electronics and its aggressive push into the market for electric vehicles, the company is strategically positioned to become a linchpin in an evolving technology ecosystem.
