Finance

China’s Xiaomi is selling so many electric cars it’s closer to breaking even

Published

1 year ago

April 24, 2024

Business Finance News

The Xiaomi SU7 on display at the Mobile World Congress 2024.

Arjun Kharpal | CNBC

BEIJING — Chinese smartphone company Xiaomi‘s new electric vehicle is selling better than expected, putting it closer to break-even despite undercutting Tesla‘s Model 3 on price.

Xiaomi has received more than 70,000 orders for its electric SU7 sedan as of April 20, close to the company’s original full-year target for deliveries this year, CEO Lei Jun told investors Tuesday.

The company now aims to deliver 100,000 of its new EV this year, he said.

Xiaomi released the SU7 in late March with a price about $4,000 less than Tesla’s Model 3, and has started deliveries. The Chinese smartphone company is set to livestream a car update at 9:20 a.m. on Thursday, as the Beijing auto show kicks off.

“Breakeven would be realized if annual sales reach 300[k]-400k,” Citi analysts said in a report, citing the investor day. They raised their autos segment gross profit margin forecast to 6% this year, versus a 10% loss previously expected.

The Citi analysts raised their earnings per share forecast by 25% this year, and now expect Xiaomi to ship 100,000 cars this year, 200,000 next year and 280,000 in 2026.

For context, Tesla China sold more than 600,000 cars last year, according to the China Passenger Car Association. Li Auto, which technically sells mostly hybrids, sold 376,000 cars last year, while Nio sold just over 160,000 cars last year, the data showed.

Li Auto had a gross margin of 23.5% in the fourth quarter last year, while Nio’s gross margin was 7.5%, both up from the year-ago period.

Tesla’s gross margin has successively declined over the past five quarters to 17.4% in the first three months of this year. Gross margin figures don’t account for operating expenses.

When Xiaomi launched the SU7 last month, Lei said the company would be selling each car at a loss.

But on Tuesday, he estimated gross profit margin of around 5% to 10% for Xiaomi’s auto business, and noted that sales are greater than expected, while expressing thanks to suppliers on reducing costs.

“We are currently in discussions with supply chain partners on how to increase production capacity and further support on costs,” he said, according to a CNBC translation of a Chinese-language investor day transcript provided by the company.

Sticking to China for now

Xiaomi has invested heavily in its electric car venture as Lei has long-term ambitions to become one of the top five automakers in the world.

But for the next three years, the company plans to fully focus on the domestic market, he told investors Tuesday.

Lei pointed out that Xiaomi already does business in more than 100 countries.

“We have a foundation of global influence and Xiaomi fans,” Lei said. “When we are ready to enter the global market, it should come naturally.”

Xiaomi also has plans for its next electric car, an SUV, set to be released in the second half of 2025, Chinese business news site 36kr reported Wednesday, citing sources.

Lei declined to share details when asked about SUV plans on Tuesday.

“I think one of the reasons for the success of SU7’s launch was its confidentiality,” he added.

Finance

Stocks making the biggest moves midday: WBD, MODG, SATS, AAPL

Published

14 hours ago

June 9, 2025

Business Finance News

Finance

Walmart taps own fintech firm for credit cards after Capital One exit

Published

15 hours ago

June 9, 2025

Business Finance News

A Capital One Walmart credit card sign is seen at a store in Mountain View, California, United States on Tuesday, November 19, 2019.

Yichuan Cao | Nurphoto | Getty Images

Walmart‘s majority-owned fintech startup OnePay said Monday it was launching a pair of new credit cards for customers of the world’s biggest retailer.

OnePay is partnering with Synchrony, a major behind-the-scenes player in retail cards, which will issue the cards and handle underwriting decisions starting in the fall, the companies said.

OnePay, which was created by Walmart in 2021 with venture firm Ribbit Capital, will handle the customer experience for the card program through its mobile app.

Walmart had leaned on Capital One as the exclusive provider of its credit cards since 2018, but sued the bank in 2023 so that it could exit the relationship years ahead of schedule. At the time, Capital One accused Walmart of seeking to end its partnership so that it could move transactions to OnePay.

The Walmart card program had 10 million customers and roughly $8.5 billion in loans outstanding last year, when the partnership with Capital One ended, according to Fitch Ratings.

For Walmart and its fintech firm, the arrangement shows that, in seeking to quickly scale up in financial services, OnePay is opting to partner with established players rather than going it alone.

In March, OnePay announced that it was tapping Swedish fintech firm Klarna to handle buy now, pay later loans at the retailer, even after testing its own installment loan program.

One-stop shop

In its quest to become a one-stop shop for Americans underserved by traditional banks, OnePay has methodically built out its offerings, which now include debit cards, high-yield savings accounts and a digital wallet with peer-to-peer payments.

OnePay is rolling out two options: a general-purpose credit card that can be used anywhere Mastercard is accepted and a store card that will only allow Walmart purchases.

Customers whose credit profiles don’t allow them to qualify for the general-purpose card will be offered the store card, according to a person with knowledge of the program.

OnePay didn’t yet disclose the rewards expected with the cards, though the general-purpose card is expected to provide a stronger value, said this person, who declined to be identified speaking ahead of the product’s release. The Synchrony partnership was reported earlier by Bloomberg.

“Our goal with this credit card program is to deliver an experience for consumers that’s transparent, rewarding, and easy to use,” OnePay CEO Omer Ismail said in the Monday release.

“We’re excited to be partnering with Synchrony to launch a program at Walmart that checks each of those boxes and will help serve millions of people,” Ismail said.