TMTPost -- Xiaomi raises its delivery target this year, highlight it feels upbeta on its first first electric vehicle (EV) model SU7.
Credit：Xiaomi
Xiaomi received over 70,000 locked-in orders as of April 20, more than three weeks after the launch of SU7, and it is making every effort to expand production capacity with an aim to deliver 100,000 units this year, the co-founder and CEO Lei Jun told audience at Xiaomi Investor Day on Tuesday. The delivery figure represents 12,500 cars per month in the rest of the year. It also suggested Xiaomi has hiked its target by nearly 40% as Lei said his company originally set the target of 72,000 units and his own sales target was 10,000 units per month.
Xiaomi’s goal is to make a dream car comparable to those from Porsche and Tesla,” Lei said at an event late December to unveil technologies that empower SU7 and its specs. At Tuesday’s event, Lei told investors some experts found all components of SU7 are made by top suppliers in various industries after dismantling it. Most of SU7 suppliers are those supply parts to BBA, namely three Germany auto giants--Mercedes-Benz, BMW, Audi, Lei said. He then signaled the margin is very limited due to elevated cost of supplies. With such expensive suppliers and such expensive parts, the gross profit margin will not be very high, Lei said. He expected the gross margin will be around 5% to 10%, adding that Xiaomi was discussing increasing production capacity and further cost support from suppliers.
Lei said last year that Xiaomi aims to become one of the top five automakers in the world within the coming 15 to 20 years. He reiterated the aim at Tuesday’s event and added his goal is not to make low profits but develop Xiaomi into the next generation of hard-core technology leader in the world in the 15-20-year period. Xiaomi will invest RMB11 billion to RMB12 billion in new businesses including the automotive unit and operating mobile system for its phones, Lei said. As to expansion plan, Lei said Xiaomi’s auto unit will focus on homeland in the coming three years as good performance in the Chinese market is the first step for development of Xiaomi’s auto business. Xiaomi will enter overseas markets naturally if it gets ready given its worldwide business in more than 100 countries and offices and brances located in more than 30 countries, Lei said.
Xiaomi officially launched SU7 on March 28, with starting price cheaper than its major competitor: Tesla’s affordable Model 3. CEO Lei presented that day SU7 has a layered pricing since it has three variants. The standard SU7 costs RMB215,900 (US$29,872), and the Pro and Max version are priced at RMB245,900 and RMB299,000, respectively. Lei said the SU7 is RMB30,000 cheaper than Model 3, which starts at RMB245,900 in China.
The Max version enables the driver back onto the road with a 510 km of range in just 15 minutes of charging. Even the standard version isn't far behind, offering a 350-kilometer range boost in the same timeframe. Xiaomi, at the presentation, compares Max version to the electric Porsche Taycan. Lei said SU7 beat Tesla's and Porsche's vehicles by many capabilities, such as its minimum range of 700 km exceeds Model 3’s 567km.
Xiaomi started presales for SU7 on the day of launch and offered a hand of freebies worth of up to RMB22,000, such as Nappa leather seats and a built-in fridge, to anyone who place the order of the Standard and the Pro version by April 30. The company disclosed at Chinese social media Weibo that it received more than 10,000 preorders in just four minutes since the launch, and preorders topped 50,000 within 27 minutes. These preorders come from customers who had paid a deposit of RMB5,000 that is refundable within seven days since the order is effective.
Xiaomi announced late March that it accumulated SU7 preorders of 88,898 units within first 24 hours. As the preorders are booming, Xiaomi initiated the second round of additional preorders for the Standard version on April 1, requiring non-refundable deposit of RMB20,000, and all the new preorders sold out in seconds that day. The company has began delivery of a limited batch of 5,000 vehicles labeled as the Founder’s Edition on April 3. The company offered exclusive car logos and additional accessories to early buyers of the limited edition, which it had already produced. It is scheduled to commence delivery of the Standard and Max version at the end of April, while delivery of the Pro version will begin a month later.