- Goldman Sachs raised its EV sales forecast for Xiaomi, citing more favorable demand and manufacturing capacity outlook.
- The bank expects Xiaomi's EV business could reach a profit inflection point by 2026.
Goldman Sachs has raised its electric vehicle (EV) sales forecast for Xiaomi (HKG: 1810, OTCMKTS: XIACY), more favorable demand and manufacturing capacity outlook.
Analyst Timothy Zhao's team raised their EV sales forecast for Xiaomi to 350,000 units in 2025 from 290,000 units previously, 21 percent above the current consensus estimate, in a research note sent to investors yesterday.
They also raised their forecast for Xiaomi's EV sales in 2026 from 480,000 units to 655,000 units, which is 48 percent higher than the current consensus.
The team currently values Xiaomi's EV business at RMB 272 billion ($37 billion), implying a 12-month forward price-to-sales ratio of 1.7x, which is higher than the average of 1.0x for Li Auto (NASDAQ: LI), Xpeng (NYSE: XPEV), and Nio (NYSE: NIO).
The team believes Xiaomi's “hero product” strategy, with a product line starting with the SU7 and moving into potentially larger markets, should lead to long-term growth and profitability.
Xiaomi's non-IFRS operating loss from its smart EV business is expected to shrink from RMB 6.8 billion in 2024 to less than RMB 4 billion in 2025, and could reach a profit inflection point in 2026, Goldman Sachs said.
The team forecasts Xiaomi will spend RMB 13 billion on research and development on EVs and other new initiatives in 2025, up RMB 3.3 billion from 2024.
Xiaomi officially launched its first EV model, the SU7, on March 28, 2024, with deliveries beginning in April. The sedan is offered in three versions -- Standard, Pro, and Max -- with starting prices of RMB 215,900, RMB 245,900, and RMB 299,900, respectively.
It announced on October 29 that the more powerful SU7 Ultra began pre-sales in China at RMB 814,900, nearly four times the RMB 215,900 starting price of the regular SU7.
The official launch of the SU7 Ultra would be in March 2025, the smartphone maker said on October 29.
On December 9, Xiaomi announced that it named its second EV model the YU7, with the launch of the SUV (sport utility vehicle) model expected to be in June or July 2025.
On December 31, Xiaomi founder, chairman and CEO Lei Jun said in a live video that the company delivered more than 135,000 vehicles in 2024, with a goal of delivering 300,000 by 2025.
At the end of November 2021, Xiaomi signed a deal with the authorities in Yizhuang, Beijing, in order to build a 300,000-vehicle-per-year plant there.
The plant has two phases, with both the first and second phases having an annual capacity of 150,000 vehicles, according to an announcement at the time.
On October 24, local media outlet National Business Daily reported that the second phase of the Xiaomi EV plant was expected to be completed by June.
($1 = RMB 7.3319)
Xiaomi CEO has interesting response to facelifted Tesla Model Y
Related posts on CnEVPost
