The Chinese electronics manufacturer Xiaomi recently published financial statistics for the first time for the quarter, taking into account electric vehicles, which it began delivering at the end of March. A deeper analysis of the reporting revealed that Xiaomi lost $9,237 for each SU7 electric car sold last quarter. The head and founder Lei Jun is not very embarrassed by this circumstance and finds reasonable excuses.
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Last quarter, Xiaomi delivered 27,307 SU7 electric vehicles to its customers. As noted yesterday, the total revenue from their sales of $870 million allows us to determine that each machine was sold on average for more than $32,000. This is clearly below cost, since the data cited by the South China Morning Post states that Xiaomi received a net loss from production and sales of electric vehicles in the amount of $252 million. Accordingly, each SU7 electric vehicle sold by Xiaomi in the second quarter brought it losses of more than $9,200. That’s not as much as Ford Motor, which already loses $100,000 on every electric vehicle it sells, but the economics are generally typical for the modern auto industry.
Xiaomi founder Lei Jun, who intends to invest about $10 billion in the development of the company’s core business, was clearly ready for such statistics, and therefore calmly explained the reasons for the losses in this area of activity: “Our electric vehicle business remains quite modest in terms of size, while auto manufacturing is an industry that exhibits economies of scale.” In addition, the company incurred high costs to develop its first electric car, and these costs are still difficult to offset due to the limited number of cars sold.