Xiaomi Lost USD9,200 For Every EV It Sold And Still Did Better Than Rivian And Ford
Developing, building, and selling electric vehicles is an expensive business, and Chinese tech giant Xiaomi has found this out the hard way, losing millions with the launch of its SU7 sports sedan. However, on a per-vehicle basis, it's doing a lot better than some more established brands.
Xiaomi's automotive arm posted an adjusted loss of USD252 million for the second quarter ending Jun 30. This represented its first-ever full delivery quarter. During Apr, May, and Jun, Xiaomi delivered 27,307 EVs to buyers in China and believes it can top 100,000 deliveries by Nov. Factoring in its total losses and the number of deliveries, Xiaomi has lost USD9,200 for every car it sold.
While Xiaomi's car division is far from a money-making business, such losses aren't unusual. In early Aug, it was revealed that Rivian lost USD1.46 billion in the second quarter, produced just 9,162 vehicles over the same period, and lost USD32,705 per vehicle delivered in Q2. Ford is doing even worse. In the second quarter, the Ford Model e electric car division lost USD1.1 billion and sold 23,957 vehicles, losing the equivalent of USD47,600 per EV sold.
Analysts from Citibank believe Xiaomi's automotive business could reach a breakeven point if it starts selling between 300,000 and 400,000 vehicles annually.
Interestingly, Lei Jun doesn't have immediate ambitions to sell Xiaomi's current EV – or future models – outside of China. Speaking with CNBC in Apr, Lei said the firm will strictly focus on the Chinese market for the next three years before it enters the global market.
A second model will help Xiaomi on its path to profitability. This new model, tipped to be an SUV slightly larger than the SU7, could premiere before the end of this year before customer deliveries begin in early 2025. Given the demand for SUVs and crossovers, it could prove to be even more popular than the SU7 sedan.
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