(Nov 20): Xiaomi Corp now expects to deliver more than 400,000 cars this year, showing accelerating momentum from an electric vehicle business that’s become profitable much faster than its peers.
The electronics producer said in its third-quarter earnings call that it’s due to hit its earlier target of delivering 350,000 units by this week, with chief executive officer Lei Jun sharing on social media the updated goal and celebrating Xiaomi’s 500,000th vehicle rolling off the production line on Thursday.
Beijing-based Xiaomi has consistently outperformed expectations with its foray into carmaking, going from its first sale early last year to drawing a profit from the venture in the most recent quarter. The EV and artificial intelligence division posted 700 million yuan ($128.2 million) in profit, breaking even roughly 19 months after the launch of its debut SU7 electric sedan last year.
The fast scale-up in production and the quick march to profitability are much needed wins at a time when Xiaomi faces headwinds in both the smartphone and EV sectors. A global shortage in memory chips will drive up costs for both of Xiaomi’s main business lines, and a gradual phase-out of a Chinese tax break on EV purchases will also likely sap demand. The uncertainties have erased much of Xiaomi’s gains in its share price this year, making it the worst-performing Chinese tech stock.
Still, Lei has expressed confidence that there’s more room to grow for the EV business. Xiaomi will speed up production and shorten the wait times for customers and invest more into R&D to come up with new features such as smarter AI for its driver-assistance system, the tech chief has said.
Uploaded by Magessan Varatharaja
