Xiaomi, a Chinese smartphone company, has recently made a foray into the electric vehicle market with its new electric SU7 sedan. Despite undercutting Tesla's Model 3 on price, the new electric vehicle has been selling better than expected. As of April 20, Xiaomi has received more than 70,000 orders for the SU7 sedan, putting the company closer to its original full-year delivery target for this year. CEO Lei Jun has announced that they now aim to deliver 100,000 units of the new electric vehicle this year.
Analysts at Citi have raised their projections for Xiaomi's autos segment, expecting a gross profit margin of 6% this year, compared to the 10% loss that was previously anticipated. They also raised their earnings per share forecast by 25% this year. The Citi analysts predict that Xiaomi will ship 100,000 cars this year, followed by 200,000 next year and 280,000 in 2026. This performance is noteworthy, especially considering that Tesla China sold over 600,000 cars last year, while Li Auto and Nio sold 376,000 and 160,000 cars respectively.
Xiaomi's CEO, Lei Jun, has emphasized the company's long-term ambitions to become one of the top five automakers in the world. However, in the next three years, Xiaomi plans to focus entirely on the domestic market before considering a global expansion. Lei highlighted Xiaomi's existing global influence and fan base in more than 100 countries as a foundation for future international growth. The company is currently in discussions with supply chain partners to increase production capacity and reduce costs to ensure the profitability of the auto business.
Apart from the SU7 sedan, Xiaomi is planning to release its next electric vehicle, an SUV, in the second half of 2025. While details about the SUV project remain confidential, sources have reported that Xiaomi is aiming to continue its success in the electric vehicle market. Lei Jun emphasized the importance of maintaining secrecy around new product launches, suggesting that it has played a significant role in the success of the SU7 sedan.
Xiaomi's entry into the electric vehicle market with the SU7 sedan has shown promising results, with strong demand and better-than-expected sales performance. The company's strategic focus on the domestic market, coupled with plans for future expansion and new product launches, indicate Xiaomi's commitment to establishing a significant presence in the auto industry. As Xiaomi continues to innovate and adapt to market demands, it will be interesting to see how the company's electric vehicle ventures unfold in the coming years.