Premium EVs should help put Xiaomi on the podium

{"text":[[{"start":7.64,"text":"Xiaomi wants to make your dream car. "},{"start":9.957,"text":"When the Chinese smartphone maker first launched its electric car earlier this year, it entered a market saturated with fast-growing local and global automakers. "},{"start":18.174,"text":"But demand for Xiaomi’s EVs has been much stronger than expected. "},{"start":21.804,"text":"It has a real chance of unseating bigger, older rivals. "}],[{"start":25.67,"text":"After entering the EV market with a $30,000 model in March, Xiaomi is now taking a bet on luxury. "},{"start":32.174,"text":"It launched a version of its SU7 electric sports car in late October, priced at $114,000. "},{"start":38.767,"text":"This puts the EV in direct competition with Tesla’s Model S Plaid in China, which sells for a similar price. "}],[{"start":45.760000000000005,"text":"The SU7 Ultra’s features, including acceleration and top speed specifications, are competitive with global peers’ models. "},{"start":53.37700000000001,"text":"It set a record at Germany’s 20km Nürburgring track — considered a benchmark of performance — with a 6.46 lap time, accelerating from 0 to 62mph in 1.97 seconds and reaching a top speed exceeding 217mph. "}],[{"start":69.91,"text":"Xiaomi has a record of successfully moving upmarket with its flagship product. "},{"start":74.464,"text":"When the world of smartphones was facing price wars, in 2021, it overtook Apple for the first time to become the world’s second-largest smartphone maker. "}],[{"start":83.39,"text":"Shares of Xiaomi have doubled in the past year and trade at 27 times forward earnings, a discount to global smartphone and EV makers. "},{"start":90.957,"text":"Geopolitical risk has been an overhang on the stock since early 2021, when the Trump administration in the US added it to a blacklist of alleged Chinese military companies. "},{"start":100.199,"text":"Although it challenged the 2021 sanctions in federal court and won a reversal, its shares have yet to recover to their pre-sanction peaks. "},{"start":107.404,"text":"The smartphone industry in general has also been battling shrinking margins. "}],[{"start":null,"text":"

"}],[{"start":111.86,"text":"EV sales could add another source of increasing profits. "},{"start":115.42699999999999,"text":"Xiaomi has estimated gross profit margin of around 5 to 10 per cent for its auto business. "},{"start":120.544,"text":"It reported sales of nearly $1bn from its EV business in the second quarter. "},{"start":125.324,"text":"Break-even here could be 300,000-400,000 units a year, Citi estimated earlier this year. "},{"start":131.454,"text":"Xiaomi’s EV deliveries in China surpassed 20,000 vehicles in the month of October alone. "},{"start":136.722,"text":"Higher unit prices following its premium model launch and stronger than expected sales would help bring forward break-even significantly. "}],[{"start":143.91,"text":"With EV makers going the way of smartphones and slashing prices, competing on features and technology is increasingly important. "},{"start":150.927,"text":"Xiaomi’s new model may not be everyone’s dream car, but it is well positioned to compete. "}],[{"start":155.75,"text":""}]],"url":"https://creatives.ftmailbox.cn/album/178904-1730721058.mp3"}