On May 23, Xiaomi announced its Q1 2024 financial results, marking the first mention of its automotive business. During the earnings call, Xiaomi revealed the following insights:
- Xiaomi invested RMB 2.3 billion (USD 317.7 million) in its electric vehicle business and other new initiatives. As of April 30, the company had received 88,063 preorders for the Xiaomi SU7. By May 15, it had delivered a total of 10,000 new cars.
- To meet delivery demands, Xiaomi’s automotive factory plans to start double-shift production in June, with the monthly delivery volume expected to exceed 10,000 units. Assuming it achieves an annual production capacity of 100,000 units in 2024, Xiaomi will set a new delivery target of 120,000 units.
- Xiaomi plans to complete the construction of 143 service centers in 86 cities and increase the number of retail stores to 219, covering 46 cities, by the end of 2024.
- Starting from the Q2 earnings call in August, Xiaomi will disclose more detailed information on automotive business revenue and gross profit margin. In April, CEO Lei Jun revealed at Xiaomi’s investor conference that the current gross profit margin of Xiaomi SU7 is between 5–10%.
Lu Weibing, group president of Xiaomi, said that the gross profit margin of the automotive business is closely related to scale. The universality of core components affects Xiaomi’s procurement costs, and the gross profit margin of Xiaomi’s automobiles will be more accurate after several months of delivery.
Beyond the data, Xiaomi’s management reiterated its determination to conduct full-stack R&D in automotive technology, revealing that its autonomous driving team now exceeds 1,000 people, and artificial intelligence will continue to be deeply integrated into its intelligent driving and intelligent cabin solutions.
Fellow automakers Li Auto and Xpeng Motors have also released their Q1 2024 financial reports. Xpeng achieved a year-on-year increase in both revenue and profit margin in the first quarter, but its net loss was still RMB 1.368 billion (USD 189 million). Li Auto’s sales and revenue maintained a growth trend, but its net profit shrank to RMB 591 million (USD 81.6 million).
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In comparison, Xiaomi Auto clearly has a more solid R&D foundation.
The first-quarter financial report shows that Xiaomi’s total Q1 2024 revenue was RMB 75.5 billion (USD 10.4 billion), with an adjusted net profit of RMB 6.5 billion (USD 897.8 million). Lu said in the earnings call that the growth of the main business can continuously provide strong financial support for the development of new businesses, offering a significant advantage to Xiaomi Auto compared to other emerging car companies.
Lei once said that Xiaomi Auto’s R&D investment in 2024 is expected to be RMB 24 billion (USD 3.3 billion). During a live stream on May 18, he further revealed that Xiaomi’s annual investment in intelligent driving technology is about RMB 2 billion (USD 276.2 million).
With substantial financial support, Xiaomi Auto has great potential to establish its presence in the automotive industry.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Xu Caiyu for 36Kr.