Investing.com– Xiaomi (OTC:) the production capacity of electric vehicles is expected to increase this year, Morgan Stanley (NYSE: ) analysts said in a note, after the Chinese tech giant reported higher-than-expected 2024 shipments.
Xiaomi Corp (HK: ) raised its 2025 shipment target to 300,000 units from 250,000 units, after shipping over 135,000 in 2024, exceeding its annual shipment target.
Morgan Stanley said the company is likely to increase its production capacity further, requiring a further increase in its delivery target for 2025. The company’s increased EV offering – with the SU7 Ultra and YU7 models to be launched later in the year – will provide a “positive change to the mix of products” in the year, said MS. The new models are also expected to have a higher average selling price than Xiaomi’s current offering.
“Xiaomi’s higher-than-expected shipment volume in 2024 and higher shipment target in 2025 implies excellent performance in the new electric vehicle business, in our view. We maintain our positive view and believe an upward revision is likely in 2025,” MS analysts said in a note.
The investment bank rates Xiaomi as Overweight with a price target of HK$35 – implying a 1% upside from current levels.
Xiaomi, which is known for its electronic devices, is a new entrant in the highly competitive Chinese electric vehicle market, having launched its flagship SU7 in early 2024.
But the company has managed to capture a significant market share despite being a relatively new entry into the sector. Xiaomi has flagged plans to become one of the world’s largest electric vehicle manufacturers.
China is the world’s largest car market, and electric vehicles make up a large part of the country’s sales. But it also sparked a fierce price war between local manufacturers to capture the largest market share.
EV giant Tesla Inc (NASDAQ: ) recently posted its first annual drop in shipments due to increased competition in China as well as weak demand for electric vehicles in the rest of the world.
