Xiaomi raises EV target after sales grow fastest since 2021

Xiaomi Corp. hiked its 2025 delivery target for electric vehicles to 350,000 units after posting its fastest revenue growth since 2021, reflecting inroads into the Chinese EV market.

The Beijing-based company, which delivered its first SU7 sedans in April 2024, has made progress in expanding its EV production capacity, billionaire co-founder Lei Jun said in a Weibo post on Tuesday. It later reported a better-than-projected 49% rise in sales to 109 billion yuan ($15.1 billion) for the December quarter.

It remains a fledgling player in car manufacturing and is grappling with limited capacity, which has stretched wait times for customers. The company has promised to boost production for quicker delivery as it builds out the second phase of its car factory in Beijing. Lei didn’t disclose further details about the production capacity on Tuesday.

“That’s a huge back log for us that we need to deliver,” Chief Financial Officer Alain Lam told Bloomberg Television on Wednesday. “We need to continue to expand our production capabilities by adding new production sites. That’s something we’re working hard on right now.”

The company’s shares surged after its successful initial foray into EVs, an arena dominated by far larger competitors Tesla Inc. and BYD Co. Lei previously set a target to deliver 300,000 cars this year, aiming to grow Xiaomi beyond its traditional business of mobile phones and home connected devices.

That year-long rally means Xiaomi’s stock is more expensive than larger Chinese internet rivals such as Alibaba Group Holding Ltd. or Tencent Holdings Ltd., and sets a high bar to clear this year.

An upcoming SUV model will launch in summer to compete with Tesla’s Model Y, testing customer appetite. Longer-term, it also plans to take its cars overseas in 2027, President Lu Weibing told media in March.

Even as Xiaomi diversifies beyond consumer electronics, it’s trying to defend its position against Apple and Huawei Technologies Co. in a stabilizing global market. Xiaomi’s handset shipments last quarter increased 4.8%, according to industry consultancy IDC, as a market recovery continues and the Chinese brand took share from Apple and Samsung.

“This past quarter was particularly remarkable for the largest Chinese smartphone vendors,” said Francisco Jeronimo, vice president for EMEA client devices at IDC. “They achieved a historic milestone as they shipped the highest combined volume ever in a quarter, representing 56% of the global smartphone shipments.”