Xiaomi enriches itself by losing money!

By publishing its results for the second quarter of 2024, Xiaomi reaffirms its ambitions and especially its incredible financial power!

Xiaomi was aware that launching a car model is expensive, very expensive, and that revenue only comes after selling a certain number of units. Hence the importance of establishing a good business plan and setting a reasonable break-even point for the operation. The growth of the smart electric vehicle sales business must greatly reassure the top executives of the Chinese company as it exceeds all forecasts.

Since the launch of the SU7, all indicators have been green. With precisely 27,307 Xiaomi SU7 registered, monthly deliveries have exceeded 10,000 units for the second consecutive month. Since June, Xiaomi has moved from one to two manufacturing teams with the aim of delivering 100,000 vehicles by November, earlier than expected since this was the initial goal set for the end of 2024, which has now been raised to 120,000 vehicles. As of June 30, 2024, Xiaomi has already opened 87 sales centers in mainland China.

An unmatched power

In the second quarter, the revenue from the electric vehicle business reached 6.4 billion RMB, which is over 800 million euros! That’s a lot, but at the same time, the Group isn’t counting its investments in R&D, with expenditures reaching 690 million euros, equivalent to 230 million euros per month! A continuous increase of nearly 20.7% since the beginning of the year, not accounting for personnel costs, material purchases,… A tight, even critical situation when spending more than earning? Rest assured, the group has 104 billion RMB in cash reserves, equivalent to 1.3 billion euros!!!

For as crazy as it may seem, Xiaomi does not aim to become a major seller of electric cars. The purpose of this automotive division is to enrich its “Human x Car x Home” smart ecosystem. Xiaomi primarily sells phones and computers. But also means of sustainable mobility and home appliances such as air conditioners and refrigerators. And all these devices communicate with each other thanks to artificial intelligence!

Before long, a SU7 will be able to notify every electronic device at home about the owner’s arrival time. Thus, the alarm can be unlocked, the air conditioner can purify the air and maintain an ideal temperature, while the TV prepares a summary of the essential information of the day, and the cooking robot starts preparing dinner in coordination with the fridge, which will provide the ideal amount of ingredients at the right moment. A futuristic vision, you might think? Absolutely not, it’s already real.

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