In the fast-evolving world of automotive technology, Chinese tech giant Xiaomi has swiftly made its mark by entering the electric vehicle (EV) marketAs of the third quarter of 2024, Xiaomi delivered an impressive 39,800 units of its new vehicle line, the Xiaomi SU7 series, indicating a quarterly growth of 45.71%. This rise in production and sales marks a significant milestone for the company, considering its commitment to the automotive sector, which just began to unfold in March of this yearWith total deliveries reaching 67,200 units as of September 30, 2024, Xiaomi not only achieved its goal of reaching 100,000 vehicles produced by November 13 ahead of schedule but also raised its annual delivery target to an ambitious 130,000 units.

Focusing on financials, Xiaomi's revenue from smart electric vehicles (EVs) for the third quarter was reported at RMB 9.5 billion, with another RMB 200 million from related sectors, resulting in total revenue of RMB 9.7 billion from its smart automotive division

Notably, this segment showcased a gross profit of RMB 1.66 billion and a gross margin improvement to 17.12%, up from 15.38% in the previous quarterThis steady financial growth places Xiaomi favorably in the competitive landscape where many new players struggle to achieve profitability.

Comparatively, Xiaopeng Motors, another notable player in the ‘new force’ of the automotive market, reported a delivery of 46,500 vehicles in the same quarter, marking a 54.05% increase quarter-on-quarter and a 16.31% rise year-on-yearNonetheless, even with record-high gross margins, the market reaction was less than favorable, leading to a decline of 3.77% in Xiaopeng's stock price following the earnings announcement, reflective of investor sentiments rooted in broader market challenges.

When looking at delivery figures from peer companies, it became evident that while Xiaopeng’s growth rate was impressive, it paled in comparison to others

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For instance, Leap Motor delivered 86,200 vehicles in the third quarter, representing quarterly growth of 61.7% and yearly growth of a remarkable 94.4%. Further along, Li Auto achieved deliveries totaling 152,800, showcasing a yearly rise of 45.40% over the same periodMeanwhile, Nio reported the delivery of 61,900 units in the third quarter, bootstrapping its annual growth of 35.72% across the initial nine months of the year.

The numbers paint a picture of rising competition where Leap Motor and Li Auto are consistently outperforming Xiaopeng, emphasizing the varying rates of growth within this burgeoning sectorXiaopeng's delivery volume still lags behind that of its competitors such as Leap and Li, though the company undeniably shows strong signs of progress and potential for catching up.

Financial indicators reveal that Xiaopeng's automotive sales revenue climbed to RMB 8.795 billion in the third quarter, which was a 12.12% year-on-year increase

Service and other revenues also surged by 90.68%, contributing an additional RMB 1.307 billion to its coffersHowever, despite significant improvements in gross margins, Xiaopeng still faced challenges, ending the quarter with a gross profit margin of just 8.59% from vehicle salesSuch figures underscore the importance of auxiliary services, which exhibited much higher margins, thus contributing significantly to Xiaopeng’s overall financial healthIn contrast, Xiaomi’s margins, which reached between 15% and 17% in a comparable timeframe, offer a more favorable outlook for the newer entrant.

In a broader context, other players such as Leap Motor and Li Auto show a mixed bag of profitability, with Leap disclosing a gross margin of 8.1% for its third quarter, with substantial growth noted throughout the yearLi Auto, leading with a vehicle gross margin of 20.9%, remains a core competitor, especially with its three-quarter total vehicle delivery being significantly higher than those of Xiaopeng.

Xiaopeng’s management remains optimistic about their trajectory

Despite a non-GAAP operating loss of RMB 1.571 billion in the third quarter, down nearly 50% year-on-year, the team expects profitability improvements driven by increased deliveries and cost reduction initiatives across various segmentsCommenting on the future, CEO He Xiaopeng forecast robust growth in deliveries, especially with the introduction of their new AI-powered P7+, which received over 30,000 pre-orders on its launch evening alone.

He elaborated on the transformative potential of AI within the automotive sector, predicting considerable advancements in autonomous driving and vehicle intelligence by 2025. With plans to enhance production capabilities and innovate through advanced software-hardware integration, he envisioned Xiaopeng on a path to adopt greater market presence as self-driving technology progresses.

On the international front, Xiaopeng has begun to spread its wings, venturing into over 30 countries with plans to significantly broaden its sales network

By the end of this year, the company marked a 70% quarter-on-quarter growth in overseas sales, aiming to increase its overseas sales locations to over 300 by 2025, thus solidifying its position in global markets beyond the North American EV segments.

In comparison, competitors such as Leap Motor and Nezha are ramping up their overseas strategies as wellLeap plans to expand into Asia-Pacific, the Middle East, and Africa, while Nezha has begun initiatives in Bolivia with projections to launch products in these new nations in the coming yearThe growing competition between these electric vehicle startups indicates that the race for market supremacy will continue to intensify.

In conclusion, Xiaomi has emerged as a formidable contender in the electric vehicle market, displaying remarkable growth within a short periodTheir strategic focus on leveraging technology and expanding their international footprint suggests they are poised to navigate both domestic and foreign challenges effectively