Xiaomi breaks income record thanks to electric car launch

On Tuesday, Xiaomi reported record revenue and profit for the first quarter, saying its ongoing transition to higher-end products, from smartphones to home appliances, is already paying off. This was reported by Reuters, reports UNN.

Details

Revenue for the quarter ended March 31 was 111.3 billion yuan ($15.48 billion), up 47% from the same period last year and exceeding the average of 107.6 billion yuan estimated by 17 analysts compiled by LSEG

According to LSEG data, adjusted net profit exceeded 10 billion yuan for the first time, jumping 65% year-on-year to 10.7 billion yuan, exceeding the average estimate of 8.96 billion yuan.

Xiaomi President Lu Weibing said during a conference call with reporters that Xiaomi's strategy of focusing on high-quality products has yielded positive results.

The world's third-largest smartphone maker, whose product lines also extend to automobiles, last week announced its latest YU7 electric SUV, which will go on sale in July. Lu said that feedback on the YU7 indicates that it may have a wider target market than its previous SU7 model. The company did not disclose the price of the YU7, but suggested that its better configurations should make the car 60,000-70,000 yuan more expensive than Tesla (TSLA.O)., opens a new tabbestseller Model Y, which is expected to be its strongest competitor, which starts at 263,500 yuan ($36,574).

Xiaomi's electric vehicle division generated 18.1 billion yuan in revenue in the first quarter, delivering 75,869 SU7 sedans. The company posted an adjusted net loss related to its electric vehicles and other new initiatives of 0.5 billion yuan. Analysts reported that orders for new electric vehicles have declined following a fatal road accident in late March involving an SU7 in driver assistance mode.

Its problems have been compounded by customer complaints of false advertising. Xiaomi apologized earlier this month for "not being clear enough" in its marketing. Nevertheless, the company's shares have recovered since April, giving it a market value of around $170 billion, higher than the roughly $161 billion held by BYD (002594.SZ)., opens a new tab, China's largest electric vehicle maker, according to LSEG data.

According to the company's latest financial report, citing data from research firm Canalys, Xiaomi's global smartphone shipments in the first quarter increased by 3% year-on-year to 41.8 million units, putting it in third place globally with a market share of 14.1%.

Let us remind you

Xiaomi announced the launch of the YU7 electric SUV, a competitor to the Tesla Model Y, and the Xring O1 mobile chip. The company plans to invest $7 billion in chip development over 10 years.