Xiaomi sets a record as the fastest new automotive manufacturer to reach 100,000 vehicles off the production line. As a result of the successful launch, Xiaomi’s automotive division experienced a significant boost in its financial performance, according to the company’s Q3 earnings report. Despite being in the red on paper, the unit’s financial health has shown significant improvement, with the loss per vehicle decreasing substantially.
Xiaomi’s third-quarter performance has shattered records, as revenues soared by a remarkable 30.5% year-over-year to reach an impressive 92.5 billion yuan, equivalent to approximately 12.8 billion USD? Web revenue rose by 4.4 percent year-over-year to reach 6.3 billion yuan, equivalent to approximately 0.9 billion USD. The company’s surplus funds have unexpectedly ballooned to a staggering 151.6 billion yuan, equivalent to approximately 21 billion USD, according to an official report. As well as, R&D expenditure was 6.0 billion yuan (0.8 billion USD), up 19.9% yr over yr.
The milestone has been achieved just a day after the 100,000th unit of Xiaomi’s SU7 smartphone was handed over to its new owner. Noting her long-standing allegiance as a Xiaomi enthusiast, she proudly displayed the vibrant red Xiaomi SU7 Professional, praising its intelligent navigation capabilities and versatility.
Within a remarkably short period of 230 days, the 100,000th SU7 rolled out of the manufacturing facility on November 13. In a remarkable feat, Aito has successfully completed 448 days of production for its new automotive brand, marking nearly half the journey towards full-scale manufacturing. After delivering its first batch of electric vehicles in 2020, Tesla took twelve years to achieve a milestone that its Chinese rivals could reach in half the time. It took Nio just three years to hit the same mark, while Li Auto needed only two.
Additionally, the company set a singular target of producing 100,000 units for that year. The target has been upgraded to 130,000 by the end of 2024. The primary production capacity of the main manufacturing site is anticipated to be 150,000 vehicles annually, translating to approximately 12,500 units per month. Currently, production stands at around 20,000 units per month, significantly exceeding that figure as a result of implementing a double-shift work schedule.
Xiaomi’s automotive division has seen a significant boost in performance, driven by increased manufacturing facility efficiency and accelerated production costs, resulting in impressive financial metrics.
Xiaomi’s automotive division made up just over 10 percent of the company’s total revenue, amounting to approximately 9.7 billion yuan, or $1.3 billion USD. Despite its standalone performance, the auto enterprise still suffered from a significant shortfall of approximately 1.5 billion yuan, equivalent to about 200 million USD.
Furthermore, Lin Shiwei, Xiaomi Group’s Chief Financial Officer, attributed the company’s significant increase in total revenue during the third quarter to the steady progress of its automotive business. Xiaomi’s CEO, Lei Jun, touted the company’s Q3 results as its “strongest performance in history”, highlighting a notable milestone for the organization.
According to Lu Weibing, president of Xiaomi Group, the pace of progress for the company’s automotive sector is expected to be the fastest among all its business lines next year, as a brand-new entrant.
During the third quarter, Xiaomi Auto successfully delivered 39,790 vehicles, generating a substantial 9.5 billion yuan (approximately 1.3 billion USD) in revenue directly tied to these sales. The company’s auto division reported a significant shortfall of approximately 1.5 billion yuan ($200 million), resulting in a modest loss of around 38,000 yuan ($5,250) per vehicle sold.
Xiaomi Auto’s third-quarter performance marks a significant improvement over the previous quarter, as its revenue surged to 14.5 billion yuan (2.1 billion USD), following a loss of 1.8 billion yuan (250 million USD) in the second quarter. Despite a 15.4% gross revenue margin from the sale of 27,307 vehicles, the company incurred a precise loss of approximately 66,000 yuan ($9,100) per vehicle delivered.
The notable decline in loss per automotive unit, coupled with a significant 17.1% surge in gross revenue, suggests that Xiaomi Auto is capitalizing on economies of scale as the manufacturing facility’s operational costs decrease and efficiency improves. As deliveries are expected to continue improving over the next year, the BOM (invoice of supplies) is likely to decline accordingly. The company’s gross revenue margin was surprisingly comparable to that of electric vehicle giant Tesla in the third quarter. This autumn, with production expected to reach nearly the combined levels of Q2 and Q3, we should anticipate a significantly higher level of efficiency.
By the end of the third quarter, the typical selling price of SU7 had surged to approximately 238,800 yuan ($32,900), a significant increase from the 227,000 yuan ($31,350) recorded in the preceding quarter. The increase in average asking price was primarily driven by more consumers opting for the Max and Pro variants of the SU7 over the Standard Edition.
By the end of September 2024, Xiaomi had established 127 electric vehicle (EV) retail sales outlets across 38 cities in mainland China.
Sources: Xiaomi, Quick Expertise
