Xiaomi has set a record for the fastest time for a new car manufacturer to get 100,000 cars off the production line. The speed has also contributed to a marked increase in the fortunes of the Xiaomi Auto unit, as evidenced by Xiaomi’s third quarter (Q3) results. Although the unit is still making a loss on paper, the loss per car has fallen significantly.
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Xiaomi’s third quarter numbers are record-breaking, with revenue up 30.5% year over year to 92.5 billion yuan (12.8 billion USD). Net profit was 6.3 billion yuan (0.9 billion USD), up 4.4% year-on-year. Perhaps more importantly, cash reserves now stand at 151.6 billion yuan ($21 billion), a record high. In addition, R&D expenditure reached 6.0 billion yuan (0.8 billion USD), an increase of 19.9% year-on-year.
The news comes just a day after the 100,000th Xiaomi SU7 was delivered to its owner. She said: “I have always been a Xiaomi fan and chose the Pro for its smart driving and range,” as she stood next to her new Xiaomi SU7 Pro, resplendent in radiant purple.
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It took just 230 days for the 100,000th SU7 to roll off the production line on November 13. That is almost half of the previous record for a new car manufacturer of 448 days, which Aito achieved. It took Tesla twelve years to achieve this feat, three years for Nio and two years for Li Auto.
Additionally, 100,000 was the original production goal for the year. This has now been increased to 130,000 by 2024. The annual production capacity of the first phase of the factory should amount to 150,000 vehicles, which amounts to 12,500 per month. Currently production is around 20,000 per month, which is significantly above that level due to the use of a double shift working pattern.
Higher factory utilization and higher production speed have contributed to better numbers for the Xiaomi Auto unit.
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Xiaomi Auto contributed just over 10 percent to Xiaomi’s total revenue, amounting to 9.7 billion yuan (1.3 billion USD). However, taken alone, the auto sector actually had a loss of 1.5 billion yuan (200 million USD).
In addition, Lin Shiwei, CFO of Xiaomi Group, said that the growth of the group’s total revenue in the third quarter is largely due to the steady growth of the automotive industry. It should be noted that Xiaomi CEO Lei Jun described the third quarter results as “the strongest performance in history” for the group.
Lu Weibing, president of Xiaomi Group, said: “As a new company, the growth rate of the automotive sector next year can be the fastest among all our companies.”
In the third quarter, Xiaomi Auto delivered 39,790 cars; directly attributable revenues amounted to 9.5 billion yuan (1.3 billion USD). While the car unit posted a loss of 1.5 billion yuan (200 million USD), the loss per car sold was just under 38,000 yuan (5,250 USD).
This shows a significant improvement from the second quarter, when Xiaomi Auto sales reached 6.4 billion yuan (USD 0.9 billion), compared to a device loss of 1.8 billion yuan (USD 250 million). 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 benefits from economies of scale as the factory’s production speed and its utilization rate increase. The BOM (bill of material) is expected to continue to decline over the next year as deliveries increase. It should be noted that the gross profit margin is the same as Tesla’s in the third quarter. In the fourth quarter, when production will be close to the combined total of the second and third quarters, performance should be even better.
Significantly, the average selling price of the SU7 rose to 238,800 yuan (32,900 USD) in the third quarter, compared to 227,000 yuan (31,350 USD) in the second quarter. The increase in average sales price was due to more people choosing to buy the Max and Pro versions of the SU7 instead of the Standard Edition.
By the end of September 2024, Xiaomi had 127 smart EV sales centers in 38 cities in mainland China.
Sources: Xiaomi, Fast Technology