Chinese tech giant Xiaomi reported record-breaking first-quarter revenue and profits on Tuesday, marking a pivotal moment in its transition to higher-end products and entry into the electric vehicle (EV) market.
Revenue soared to 111.3 billion yuan ($15.48 billion) for the quarter ending March 31, a 47% year-on-year surge. The figure beat analysts’ expectations of 107.6 billion yuan, according to LSEG data. Net adjusted profit jumped 65% to 10.7 billion yuan, surpassing the 8.96 billion yuan forecast.
“This strong performance reflects our commitment to innovation and premium positioning,” said Xiaomi President Lu Weibing during a press call. “Our strategy to shift towards high-end products is delivering solid results.”
Electric ambitions shift into gear
The earnings milestone comes just days after Xiaomi launched its second electric vehicle, the YU7 SUV, at a high-profile event in Beijing. The company plans to begin sales in July.
According to Lu, the YU7 has received “very encouraging feedback,” suggesting broader market potential compared to its debut EV, the SU7 sedan. While pricing remains undisclosed, insiders suggest it could cost 60,000 to 70,000 yuan more than Tesla’s Model Y, currently priced at 263,500 yuan ($36,574).
“Our YU7 offers stronger configurations and an elevated driving experience,” said Lu. “We believe it can appeal to a wider audience than the SU7.”
EV unit posts mixed results amid challenges
Despite the optimism, Xiaomi’s EV division faced setbacks in Q1. It reported 18.1 billion yuan in revenue after delivering 75,869 SU7 sedans. However, the unit logged an adjusted net loss of 500 million yuan.
Sales momentum has slowed following a fatal highway crash involving an SU7 in assisted-driving mode in late March. The incident raised safety concerns and was followed by criticism over misleading marketing.
Xiaomi responded with a public apology, acknowledging its communication “was not clear enough.” Despite the stumble, investor confidence appears to have returned. Xiaomi’s stock has rebounded since April, pushing its market value to around $170 billion, higher than EV leader BYD’s $161 billion.
Smartphone business still going strong
Xiaomi remains the world’s third-largest smartphone vendor, shipping 41.8 million units in Q1, a 3% increase year over year. According to Canalys data, the company now holds a 14.1% global market share.
“Smartphones continue to be our stronghold,” said CEO Lei Jun, who introduced the YU7 at the Beijing launch. “But our future lies in smart ecosystems, from mobile to mobility.”
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