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In a striking announcement during yesterday’s investor conference, Xiaomi’s CEO, Lei Jun, addressed the intensifying competition within the automotive sector. His message was clear: Xiaomi is not entering a price war.
Lei Jun’s strategy prioritizes sustainable growth over aggressive discounting. The company plans to maintain a long-term hardware profit margin of no more than 5%, underscored by their upcoming foray into automotive chip production.
Specifically addressing the anticipated launch of the Xiaomi YU7 standard edition, Lei Jun dismissed earlier speculation. He revealed that the final pricing would be determined only 1-2 days before launch. He also projected that the automotive and chip businesses, as well as other new ventures, could reach profitability during the third or fourth quarter of the year.
This forward-looking perspective is further fueled by the company’s financial performance. Xiaomi’s Q1 earnings report showed significant progress for its smart electric vehicles, AI, and other innovative businesses, generating RMB 18.6 billion in revenue. The quarterly losses within this segment have been trimmed to RMB 500 million, indicating that Xiaomi is on the cusp of profitability in the automotive market.
Furthermore, Lei Jun disclosed a substantial investment in the YU7’s intelligent driving system, with the total budget for research and development reaching RMB 3.5 billion, positioning the company as a leader in the industry.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/1666.html
