Emir BardakçıXiaomi Group released its second-quarter financials this Wednesday, and those related to their smart electric vehicle (EV) segment are very impressive. The first EV attracted sales of 27,307 units during the period under review, where it raked in 6.4 billion yuan in revenue and a gross profit margin of about 15.4%. The auto segment, however, resulted in a net loss of 1.8 billion yuan, as a result of investment and production scale challenges.
Key Highlights from Xiaomi’s Q2 Results
- Shipping: 27,307 units of Xiaomi SU7 in Q2
- The Car Sales Revenue: 6.4 billion yuan
- Gross Profit Margin: 15.4
- Net Loss: 1.8 billion yuan in the smart electric vehicle business
Causes of Xiaomi SU7 Losses
In an interview, he also wrote, “President of Xiaomi Group, Lu Weibing, pointed out reasons for losses accruing to the tune of billions of yuan from the automobile business; there are two core reasons.
Xiaomi Auto is still at a nascent stage of development, and the economies of scale entrance in the automobile industry are very prominent. As the company proliferates production and operations, it expects to reduce costs and, in effect, improve profitability.
Huge Investment in Pure Electric Sedan
The Xiaomi SU7, being a pure electric sedan, called for a huge upfront investment. Development and production costs associated with this car have been high, which means it will take a while for Xiaomi’s budget to recover and make it gain a profit.
Despite the losses, Lu Weibing confirmed to the deepening in automotive operations and expressed confidence that Xiaomi can eventually scale the business in the automotive industry. He is particularly confident about the future in the case that the automobile operation at Xiaomi continues to grow, the costs will spread out evenly, thus bringing better financial performance.
Outlook for the Future
Xiaomi Group places an ambitious target on its automotive business: delivering 100,000 units of the Xiaomi SU7 series alone before November 2024. More than that, Xiaomi Company will respect the score that it had also set to make sure and deliver 120,000 units before 2025 end, with great assurance in its gain power on strength and market demand response, among other things. He was also particularly pleased that the 15.4% gross profit margin of Xiaomi’s new business, which includes smart electric vehicles, further increased upon the scale of Xiaomi Auto, and the company is confident that the gross profit margin will further improve in the course of the fiscal year.
Second-quarter figures turn out to be a leading test case of how tough electric cars can be: $1 billion wiped out by investment hikes and a narrow scale. Badly resulting in the case of Xiaomi SU7, the leadership of the company stays still optimistic about it in the long run. Accordingly, Xiaomi, with its strong sales targets and ever-increasing penetration into the EV market, wills the workers on the front line to be a strong player in smart electric vehicles in the future.
Bruh why electric buy some that runs on benzine and don’t be dumbass