According to Chinese reports, the brand could launch its second model in just two months
from Brad Anderson
August 23, 2024 at 08:30
- The Chinese technology giant delivered 27,307 vehicles in the second quarter of the year.
- In the second quarter, Rivian lost over $32,000 per car sold, while Ford’s electric division lost $47,600 per electric vehicle built.
- Analysts believe that Xiaomi could break even if the company sells between 300,000 and 400,000 cars annually.
Designing, building and selling electric vehicles is an expensive business, and Chinese tech giant Xiaomi learned this the hard way when it lost millions on the launch of its SU7 sports sedan. However, on a per-vehicle basis, Xiaomi is doing significantly better than some more established brands.
Xiaomi’s automotive division posted an adjusted loss of $252 million in the second quarter ended June 30, the first quarter in which the company made full deliveries. In April, May and June, Xiaomi delivered 27,307 electric vehicles to buyers in China and believes it can surpass the 100,000 deliveries mark by November. Taking into account the total losses and the number of deliveries, Xiaomi lost $9,200 for each car sold.
Read: Xiaomi’s electric SUV could be unveiled this October
Although Xiaomi’s car division is far from a lucrative business, such losses are not unusual. In early August, it was revealed that Rivian lost $1.46 billion in the second quarter, producing only 9,162 vehicles during the same period and losing $32,705 per vehicle delivered in the second quarter. Ford is doing even worse. In the second quarter, the Ford Model e electric car division lost $1.1 billion and sold 23,957 vehicles, a loss of $47,600 per electric vehicle sold.
Citibank analysts believe Xiaomi’s automotive business could break even if the company sells between 300,000 and 400,000 vehicles annually.
Interestingly, Lei Jun has no immediate ambitions to sell Xiaomi’s current electric vehicle – or future models – outside of China. Speaking to CNBC in April, Lei said the company will focus strictly on the Chinese market for the next three years before entering the global market.
A second model will help Xiaomi on its path to profitability. This new model, which will likely be a slightly larger SUV than the SU7, could debut before the end of this year before deliveries to customers begin in early 2025. Given the demand for SUVs and crossovers, it could prove even more popular than the SU7 sedan.
