Xiaomi has broken into the electric vehicle market as successfully as it did the smartphone market 13 years ago

Despite the doubts of skeptics, Xiaomi’s debut in China’s saturated electric vehicle market was successful – the company managed to repeat its previous success in the smartphone business and its shares are approaching a new record value, writes Bloomberg.

Image source: Ministry of Industry and Information Technology of the People’s Republic of China

Xiaomi’s shares have more than doubled this year, outpacing global rivals, as the company’s presence in China’s electric vehicle market soars, where it has challenged leaders BYD and Tesla. The next share price jump is expected to occur after the YU7 electric crossover is released next summer.

Investors are hoping to see the same kind of growth seen since the release of Xiaomi’s first smartphone in 2011, when within a few years the company became a leader capable of competing with Apple and Samsung Electronics. Hong Kong-listed shares of Xiaomi are now about 10% off their 2021 peak.

The growth of Xiaomi shares has surpassed the performance of leading car and smartphone manufacturers against the backdrop of an uncertain macroeconomic situation in China and the world. Notably, its success comes at a time when electric vehicle startups such as Nio and Li Auto have seen their shares fall due to concerns about the prospects for demand for their products.

Xiaomi reported stronger-than-expected sales growth for the third quarter. The production of electric vehicles brought the company about 10% of total revenue. It quickly gained momentum, using marketing opportunities and the high popularity among young consumers that it gained thanks to the release of smartphones, Bloomberg noted.

Xiaomi expects to sell 130 thousand units of the SU7 sedan this year, doubling its forecast. Analysts predict that with the release of the YU7 crossover, the company’s total sales in 2025 will more than double compared to 2024.

«Xiaomi’s electric vehicle business could overtake smartphones as the company’s key sales growth driver in 2025,” said Bloomberg Intelligence analyst Steven Tseng. He believes the next model “could spur EV sales growth by 137% in 2025, thanks to the popularity of larger vehicles in China and the ramping up of capacity at a second EV plant.”

Investment group Macquarie Group also believes that Xiaomi can increase its market presence with the release of the YU7 crossover, which is expected to cost between 250,000 and 330,000 yuan ($34,000 to $45,000).