Xiaomi Corp. (HKEX: 1810) has boosted its sales target for the SU7 electric vehicle to 120,000 units this year, reflecting growing confidence in its ability to compete in the crowded EV market, potentially rivaling Tesla Inc. This optimistic revision follows a record-breaking quarter where Xiaomi's revenue surged 27% to 75.51 billion yuan ($10.4 billion), surpassing expectations.
The ambitious new goal underscores the commitment of Xiaomi’s billionaire co-founder Lei Jun to enter the EV industry with his $10 billion investment. Initially, Xiaomi planned to deliver over 100,000 SU7 units. However, strong demand, with orders approaching 90,000 and 10,000 units already delivered by mid-May, prompted the company to raise its target and plan for double-shift production starting in June.
While over 60% of Xiaomi's revenue comes from smartphones, the company is diversifying due to sluggish device demand in China. Despite a slight dip in net income to 4.2 billion yuan for the March quarter, signs of recovery in the mobile market are emerging. Xiaomi's smartphone shipments increased by nearly 34% last quarter, closing the gap with Samsung and Apple.
Looking ahead, Xiaomi is developing an SUV similar to Tesla’s Model Y, with plans to launch sales by 2025. Analysts predict the EV business could contribute a mid-to-high single-digit percentage to Xiaomi’s revenue in 2024, signaling a promising future for the tech giant's automotive ambitions.