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(Bloomberg) -- Xiaomi Corp. reported better-than-expected revenue in the March quarter as it moves to aggressively expand its presence in China’s EV market and grow its core smartphone business.
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Revenue rose to 111.3 billion yuan ($15.5 billion), Xiaomi said in a statement Tuesday, beating the average analyst estimate of 109 billion yuan. The company recorded 75,869 deliveries of its SU7 sedan during the period. Its Internet of Things division, which sells products ranging from home appliances to wearable tech, was a strong performer with revenue growth of nearly 60% from a year earlier.
Beijing-based Xiaomi is moving ahead with billionaire co-founder Lei Jun’s $10 billion strategy to join the ranks of the world’s top automakers. After taking on the likes of Tesla Inc. and BYD Co. in the crowded market last summer, the company posted a loss of 700 million yuan from its EV division in the fourth quarter. That loss narrowed to 500 million yuan last quarter, the company said, as it pins its hopes on its first electric sport utility vehicle — the YU7 — which it unveiled last week and will hit the market as early as July.
Read: Xiaomi Billionaire Touts SUV, Chinese Chip in Tech Showcase
China’s EV leader BYD is keeping the pressure on Xiaomi, starting a price war earlier this year by adding advanced driver-assistance features across most of its lineup at no extra cost. Last week, BYD slashed prices on a range of electric and plug-in hybrid models by as much as 34%.
Xiaomi has come under further pressure following a fatal crash in late March that involved its SU7 model. The cause of the accident, which killed three, hasn’t yet been announced. The SU7 had its autopilot function turned on at the time of the crash and EV makers’ self-driving advertising claims have come under growing scrutiny.
Just days before the accident, Xiaomi had raised its 2025 delivery target for electric vehicles to 350,000 units. But the company’s EV sales took a hit in April, according to Deutsche Bank AG. Xiaomi’s President Lu Weibing said on a call with media Tuesday that the company was still looking to meet its delivery target for the year.
Strong first quarter EV deliveries have put Xiaomi “a step closer” to reaching that target, Bloomberg Intelligence analysts Steven Tseng and Sean Chen said.
Revenue from Xiaomi’s core smartphone business grew 8.9% during the period, it said. Shipments have grown 40% year-on-year at home, driven by Chinese government subsidies, according to a recent research note from consultancy Counterpoint. Its share price has also recovered from its March low, surging nearly 90% in the past six months.
