Xiaomi, which has made a big noise in the electric vehicle market, is selling at a loss with its first car, the SU7. According to reports, even though the Chinese company is ramping up production and deliveries of its first car, it is facing huge financial losses.
Xiaomi SU7 sales are making a loss
According to quarterly financial results, Xiaomi’s new car division posted an operating loss of $252 million. This is despite the fact that the Xiaomi SU7 was sold close to 30 thousand units. With a price of around 30 thousand dollars, each vehicle delivered resulted in a loss of 9 thousand 200 dollars to Xiaomi.
However, the company stated that it achieved a gross profit margin of 15 percent from electric car operations. In this context, it stated that it has the potential to further expand production. It even aims to produce 100 thousand vehicles by the end of November.
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Xiaomi actually doubled production in June to reach its ambitious sales targets. In this context, he said that he could produce more than 10 thousand SU7s per month. In the summer period, monthly sales exceeded 13 thousand.
Still, analysts think that Xiaomi’s electric vehicle division needs to reach 300 to 400 thousand vehicle sales annually to turn a profit. A single factory and sales only in China put additional pressure on start-up costs.
According to Chinese media reports, Xiaomi will organize a major launch event at the end of October to introduce its second electric SUV model. In addition to new smartphones, tablets and wearables, information about the car is expected to be given at the event.
