The Xiaomi SU7 will be exhibited at the Mobile World Congress 2024.
Arjun Kharpal | CNBC
BEIJING – Chinese smartphone company XiaomiThe new electric vehicle is selling better than expected and is approaching break-even despite being undercut Teslas Model 3 at the price.
Xiaomi has received more than 70,000 orders for its SU7 electric sedan as of April 20, close to the company’s original full-year target for deliveries this year, CEO Lei Jun told investors on Tuesday.
The company is now aiming to deliver 100,000 of its new electric vehicles this year, he said.
Xiaomi released the SU7 in late March at a price about $4,000 less than Tesla’s Model 3 and has started shipping. The Chinese smartphone maker will livestream a car update at 9:20 a.m. on Thursday at the start of the Beijing Auto Show.
“The break-even point would be reached when annual sales reach 300[k]-400,000,” Citi analysts said in a report, citing the investor day. They raised their gross profit margin forecast for the automotive segment to 6% this year, compared with a previously expected loss of 10%.
Citi analysts raised their earnings per share forecast by 25% this year and now expect Xiaomi to deliver 100,000 cars this year, 200,000 next year and 280,000 cars in 2026.
For context: Tesla According to the China Passenger Car Association, more than 600,000 cars were sold in China last year. Li carwhich technically sells mostly hybrid vehicles, sold 376,000 cars last year Nio According to the data, just over 160,000 cars were sold last year.
Li Auto achieved a gross margin of 23.5% in the fourth quarter of last year, while Nio’s gross margin was 7.5%, both an increase from the same period last year.
Tesla’s gross margin has gradually declined over the past five quarters to 17.4% in the first three months of this year. Gross margin numbers do not take operating costs into account.
When Xiaomi launched the SU7 last month, Lei said the company would sell any car at a loss.
But on Tuesday, he estimated the gross profit margin for Xiaomi’s auto business at about 5% to 10%, noting that sales were higher than expected while thanking suppliers for cutting costs.
“We are currently in discussions with supply chain partners about how we can increase production capacity and further support costs,” he said, according to a CNBC translation of a Chinese-language investor day transcript provided by the company.
I’ll stick with China for now
Xiaomi has invested heavily in its electric car project as Lei has long-term ambitions to become one of the world’s top five automakers.
Over the next three years, however, the company plans to fully focus on the domestic market, he told investors on Tuesday.
Lei pointed out that Xiaomi already does business in more than 100 countries.
“We have a foundation of global influence and Xiaomi fans,” Lei said. “If we are ready to enter the global market, it should be a given.”
Xiaomi also has plans for its next electric car, an SUV, to be launched in the second half of 2025, Chinese business news site 36kr reported on Wednesday, citing sources.
When asked about SUV plans on Tuesday, Lei declined to provide details.
“I think one of the reasons for the success of the SU7 launch was its confidentiality,” he added.
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2024-04-24 05:08:54
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