Xiaomi has set a record for the fastest time for a new car producer to reach 100,000 cars off the production line. The speed has also helped a marked increase in the fortunes of the Xiaomi Auto unit, as revealed by the third quarter (Q3) Xiaomi results. Although the unit is, on paper, still making a loss, the loss per car has fallen significantly.
Third-quarter figures for Xiaomi are record-breaking, with revenue up 30.5% year over year at 92.5 billion yuan (12.8 billion USD). Net profit was 6.3 billion yuan (0.9 billion USD), up 4.4% year over year. Perhaps more significantly, Cash reserves are now 151.6 billion yuan (21 billion USD), a record high. In addition, R&D expenditure was 6.0 billion yuan (0.8 billion USD), up 19.9% year over year.
The news comes just a day after the 100,000th Xiaomi SU7 was delivered to its owner. She said, “I’ve always been a Xiaomi Fan and picked the Pro for its smart driving and range,” while standing next to her new Xiaomi SU7 Pro, resplendent in radiant purple.
It took just 230 days for the 100,000th SU7 to come off the production line, on November 13. That is nearly half the previous record for a new car producer of 448 days achieved by Aito. It took Tesla twelve years to achieve this feat, three years for Nio, and two years for Li Auto.
Furthermore, 100,000 was the original production target for the year. This has since been increased to 130,000 for 2024. The annual production capacity of the first phase of the factory is meant to be 150,000 vehicles, which is the equivalent of 12,500 a month. Currently, production is at around 20,000 a month, which is significantly over that level thanks to the use of a double shift work pattern.
The increased factory utilization and faster production rate have contributed to better figures for the Xiaomi Auto unit.
Xiaomi Auto contributed just over 10 percent of Xiaomi’s total revenue, with a figure of 9.7 billion yuan (1.3 billion USD). However, if taken alone, the auto business actually had a loss of 1.5 billion yuan (200 million USD).
Furthermore, Lin Shiwei, Xiaomi Group’s CFO, said that the growth of the group’s total revenue in the third quarter is largely due to the steady growth of the automobile business. It should be pointed out that Lei Jun, Xiaomi’s CEO, described the Q3 results as “the strongest performance in history” for the group.
Lu Weibing, president of Xiaomi Group, said, “As a new business, automobiles’ growth rate next year may be the fastest among all our businesses.”
In the third quarter, Xiaomi Auto delivered 39,790 cars; the revenue directly attributable to these was 9.5 billion yuan (1.3 billion USD). With the auto unit making a loss of 1.5 billion yuan (200 million USD), the loss per car sold was slightly under 38,000 yuan (5,250 USD).
This shows a significant improvement from the second quarter, when Xiaomi Auto’s revenue was 6.4 billion yuan (0.9 billion USD) against a loss for the unit of 1.8 billion yuan (250 million USD). Although the gross profit margin was 15.4% on the 27,307 cars delivered, the actual loss per car was just under 66,000 yuan (9,100 USD).
Not only the reduction in loss per car but also the increase in gross profit to 17.1% shows that Xiaomi Auto is benefiting from economies of scale as the production rate of the factory and its utilization increases. It’s expected that the BOM (bill of materials) will continue to decrease as deliveries increase over the next year. It should be noted that the gross profit margin is the same as that of Tesla in the third quarter. Q4, which will see production of nearly the combined total of Q2 and Q3, should see an even better performance.
Significantly, in the third quarter, the average selling price of the SU7 rose to 238,800 yuan (32,900 USD), compared to 227,000 yuan (31,350 USD) in the second quarter. The increase in average selling price was due to more people choosing to buy the Max and Pro versions of the SU7 rather than the Standard Edition.
At the end of September 2024, Xiaomi had 127 smart EV sales centers in 38 cities in mainland China.
Sources: Xiaomi, Fast Technology
