Xiaomi, the Chinese smartphone company, has seen overwhelming success with its new electric vehicle, the SU7 sedan. With over 70,000 orders received as of April 20, the company is well on its way to achieving its goal of delivering 100,000 units this year. This comes as a surprise, considering the SU7 is priced $4,000 lower than Tesla’s Model 3, yet still manages to attract a substantial customer base.
The strong sales performance of the SU7 has had a significant impact on Xiaomi’s financial outlook. Analysts at Citi have raised their gross profit margin forecast for the company’s auto segment to 6% for this year, up from the previously expected 10% loss. This positive development has also led to a 25% increase in the earnings per share forecast for the year. It is clear that Xiaomi’s entry into the electric vehicle market is proving to be a lucrative move for the company.
In comparison to other players in the Chinese electric vehicle market, Xiaomi’s foray has been met with notable success. While Tesla remains a dominant force, having sold over 600,000 cars in China last year, Xiaomi’s rapid growth is impressive. Li Auto and Nio, two other key players in the market, have also seen strong sales figures, but Xiaomi’s ability to quickly establish a significant market share is a testament to its strategic approach.
Xiaomi’s CEO, Lei Jun, has expressed ambitions to make the company one of the top five automakers globally. While this may be a lofty goal, the company’s initial success in the electric vehicle market indicates that it is on the right path. Lei emphasized that Xiaomi will focus on the domestic market for the next three years before considering global expansion. This deliberate approach demonstrates Xiaomi’s commitment to establishing a strong foundation before venturing into international markets.
Looking ahead, Xiaomi has already set its sights on its next electric vehicle, an SUV expected to be released in the second half of 2025. This future offering, along with the continued success of the SU7 sedan, positions Xiaomi as a key player in the evolving electric vehicle landscape. Despite being tight-lipped about specific details regarding the SUV, Xiaomi’s track record of innovation and competitive pricing suggests that it will be a vehicle to watch out for.
Xiaomi’s swift success with its electric vehicle venture highlights the company’s ability to pivot into new markets and compete effectively with established players. With a strong sales performance, improved profit margins, and a clear long-term strategy, Xiaomi is poised to make a significant impact on the electric vehicle industry. As the company sets its sights on future offerings and potential global expansion, it is clear that Xiaomi’s ambitions in the automotive sector are only just beginning to unfold.