Psst—don’t tell Apple, but it looks like there are good opportunities for phone makers in the automotive sector.
China’s Xiaomi, which alongside Apple and Samsung is among the world’s big three smartphone firms, just announced its Q2 results, showing that its first electric vehicle is something of a hit. It launched the SU7 at the end of March to considerable consumer excitement, and delivered 27,307 of the sedans in the subsequent quarter.
That brought in 6.4 billion yuan ($898 million) in revenue, helping Xiaomi to surpass analysts' estimates, Reuters reports. A rebounding smartphone market also helped, of course, with Xiaomi’s Chinese handset shipments rising 16.5% year on year.
Xiaomi’s auto unit is still unprofitable—the company invested unusually large amounts in the SU7’s creation, and aggressive pricing meant it lost around $9,200 on each $29,900 EV it shipped. But such losses are common in the EV sector. Xiaomi claims to have enough cash to deal with five years’ worth of Chinese EV price wars, and profitability should increase in the near term as production ramps up.
“Our [EV business] size remains relatively small and car manufacturing is a typical economies-of-scale manufacturing industry,” company president Lu Weibing said in a press conference, according to the South China Morning Post. Lu said he was “confident” Xiaomi would hit its goal of shipping 120,000 cars by the end of the year.
For context, China’s BYD sold 426,039 EVs in Q2 and Tesla sold around 411,000. Xiaomi has a way to go, but then again it hasn’t even started selling its EVs outside China yet. Once it’s built out more production capacity, Xiaomi also intends to start making electric SUVs around late 2025, which would represent a major expansion of its EV efforts.
Speaking of Tesla, Elon Musk’s outfit has had to issue a rare physical recall (as opposed to the kind that just requires a remote software fix) for one of its cars.
According to the U.S. National Highway Traffic Safety Administration, a trim on the roof of the Model X SUV can come off, which could create a road hazard. That means 9,136 of the vehicles need to go in; Tesla will test how well the roof trim is fixed on and reattach if needed, Reuters reports.
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David Meyer
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