The path to profitability for emerging players in the automotive industry is becoming increasingly defined.

Xiaomi Motors Aims for Profitability in 2023

On June 3, Lei Jun, Chairman of Xiaomi Group, announced at Xiaomi's investor conference that losses in the company's automotive division are steadily decreasing, with an expectation of achieving profitability in the third to fourth quarters of this year.

For the first quarter of 2023, Xiaomi Group reported revenue of approximately RMB 111.293 billion, marking a record high and a 47.4% year-over-year increase. Its adjusted net profit for the quarter surpassed RMB 10 billion for the first time, reaching RMB 10.7 billion, up 64.5% year-over-year.

Specifically, revenue from Xiaomi's smart electric vehicles, AI, and other innovative businesses amounted to RMB 18.6 billion, accounting for 16.71% of Xiaomi Group's total revenue. Operating losses in this segment narrowed to RMB 500 million, with smart electric vehicle revenue standing at RMB 18.1 billion, a 10.7% increase month-over-month.

NIO Targets Profitability in Q4 2023

On the same day, NIO released its financial report for the first quarter of 2023, revealing revenue of RMB 12.03 billion, a 21.46% year-over-year increase. Net losses reached RMB 6.89 billion, a 31% increase compared to the loss of RMB 5.26 billion in the same period last year.

Despite this, NIO remains optimistic about achieving break-even in the fourth quarter of this year. Li Bin, Chairman and CEO of NIO, stated in an earnings call, "This year, the company has essentially entered a harvest phase starting from the second quarter, giving us an opportunity to turn a profit in the fourth quarter. We are very confident in achieving this goal." Li Bin further explained, "With combined sales of our three brands exceeding 50,000 units per month, a gross margin of 17% to 18%, and sales and administrative expenses kept at around 10% of sales, the company is poised for profitability."

Additionally, Li Auto has already achieved profitability, while Zero Run anticipates breaking even in the second quarter of this year. XPeng, too, expects to turn a profit in the fourth quarter. Overall, 2023 could be a pivotal year for emerging players in the automotive industry to achieve profitability, and we eagerly await the unveiling of their respective timelines.