Xiaomi sees its stock rise sharply as its electric vehicle (EV) business accelerates significantly
According to a recent publication by South China Morning Post, the market reacted positively to the new sales figures, although there is no shortage of reservations about profitability.
Strong boost from EV car sales
Xiaomi announced that its electric vehicle deliveries in April exceeded 30.000 units, showing that the company's EV division is gaining momentum.
This positive development led the company's share price on the Hong Kong stock exchange to record up to 11% intraday, before finally closing with profits of around 6,8%.
The trading volume reached HK$7,3 billion., ranking the stock among the most active of the day.
The challenges behind development
Despite the positive sales picture, analysts appear more cautious regarding profit margins.
The main reasons are:
- The high cost of EV production
- The ongoing subsidies and discounts
- Intense competition in the Chinese market
These factors may limit the company's overall profitability, even if revenue continues to grow.
Xiaomi's strategic transition
Xiaomi, known primarily for its smartphones and IoT devices, has invested heavily in the electric vehicle sector in recent years.
- Entering the EV market: in 2024
- Delivery target for 2026: up to 550.000 vehicles
This transition is a key pillar of growth, as the company seeks to diversify its revenues and compete with major market players.
Xiaomi's trajectory clearly shows that its future is no longer limited to smartphones. Its dynamic entry into electric vehicles has already started to positively affect its stock market value.
However, the real challenge is not increasing sales, but converting that growth into sustainable profitability. If Xiaomi can balance costs with growth, then it could become one of the major players in the global EV market in the coming years.
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