Chinese tech giant Xiaomi (OTC:XIACF) reported a marked increase in sales for the first quarter, driven by a surge in smartphone demand.
The world's third-largest smartphone manufacturer reported that its first-quarter sales reached $10.4 billion (75.5 billion yuan), marking a 27% increase from the previous year.
In March, the company launched its first electric vehicle (EV), the SU7 sedan, entering the highly competitive domestic market.
The company aims to deliver 120,000 of its SU7 electric vehicles this year, hoping the model can eventually compete with Tesla (NASDAQ:TSLA) Inc. and support its broader ambitions. The guidance represents a 20% hike from the previous forecast of 100,000 vehicles.
"As of April 30, 2024, the cumulative locked-in orders for the Xiaomi SU7 Series reached 88,063 vehicles," Xiaomi said in its earnings report on Thursday, noting it had delivered 10,000 cars by mid-May.
On a call with reporters, Lu revealed that Xiaomi is on track to ship 10,000 SU7s in June—matching the volume sold in the first 43 days—indicating a potential to achieve the annual target of 120,000 units.
Despite its foray into electric vehicles, Xiaomi's traditional smartphone business remained the primary driver of sales growth, generating 46.5 billion yuan in the first quarter, an increase of 32.9% year-on-year.
The Hong Kong-listed company also reported a more than 25% increase in research and development costs for the first quarter, "primarily due to the increase in research and development expenses related to our smart EV business and other new initiatives."
Xiaomi shares fell 2.5% in Hong Kong trading.