Xiaomi's SU7 orders reach 70,000, EV business to stay focused on China

FILE PHOTO: Event on Xiaomi's EV in Beijing

By Qiaoyi Li and Brenda Goh

BEIJING (Reuters) -China's Xiaomi has secured locked-in orders for more than 70,000 of its SU7 electric cars as of Saturday and the company intends to keep its automotive business "100% focused" on the Chinese market for the next three years, founder Lei Jun said on Tuesday.

The smartphone maker is targeting more than 100,000 deliveries for the SU7 in 2024, he said in comments at an investor conference posted on his official WeChat account.

Locked-in orders refer to those where buyers have opted for non-refundable deposits.

Xiaomi launched its car, which draws styling cues from Porsche, late last month. It enters a crowded China EV market with an attention-grabbing price tag - under $30,000 for the base model, which is $4,000 cheaper than the base model of Tesla's Model 3 in China.

The company has said it expects to lose money on the SU7 and Lei said on Tuesday, while also noting that most of its suppliers also supplied the likes of Mercedes Benz, BMW and Audi.

"With such expensive suppliers and such expensive parts, the gross profit margin will not be very high," he said.

"I estimate that the gross profit margin will be around 5-10%," he said, adding that Xiaomi was discussing increasing production capacity and further cost support from suppliers.

Better known for making affordable smartphones and home appliances, Xiaomi intends to invest another 11-12 billion yuan this year in new businesses including the automotive unit and the operating mobile system for its phones, he said.

Ultimately, his goal was for Xiaomi to become one of the top five automakers globally in 15-20 years, he said.

(Reporting by Qiaoyi Li and Brenda Goh; Editing by Tom Hogue)