Chinese tech firm Xiaomi posted forecast-beating revenues in the last quarter, with its EV unit making a telling contribution.
The corporation reported higher-than-expected earnings for the three months to June, revealing its electric vehicle business was responsible for $869.2 million of its $12.45 billion total, beating the $12.02 billion estimated by analysts, according to LSEG.
The company first announced its entry into the EV business in 2021 as a diversification from its core smartphone operations.
Xiaomi started shipping its SU7 electric vehicles in early April after announcing it would price its SU7 models competitively against Tesla’s offerings.
In its first financial report to include details of its auto business segment, it revealed it delivered 27,307 EVs in the second quarter.
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In a media call following the earnings report, Xiaomi’s President Lu Weibing said he is “confident” the company will reach its target of delivering 120,000 electric vehicles by year-end.
Since June, Xiaomi has implemented double-shift measures to ensure monthly deliveries exceed 10,000 units.
Xiaomi’s auto business is still operating at a loss, though. The unit reported an adjusted loss of $250 million for the quarter, with a gross profit margin of 15.4%.
Lu said that as deliveries ramp up, the unit’s profitability is expected to improve over time.
The global smartphone market has shown signs of a recovery since late last year after a prolonged period of sluggishness.
Xiaomi’s global smartphone shipments rose 27.4% to 42.3 million units in the second quarter, helping the company capture a 14.8% market share and placing it in the No3 position, according to industry research firm IDC.
In China, Xiaomi’s largest market for its smartphone business, shipments rose 16.5%, according to IDC.
Adjusted net income was $870 million, above the $670 million estimated by analysts.
- Reuters with additional editing by Sean O’Meara
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