Investing.com– Xiaomi (OTC:) is expected to ramp up electric vehicle production capacity this year, Morgan Stanley (NYSE:) analysts said in a note, after the Chinese tech giant recorded stronger-than-expected 2024 deliveries.
Xiaomi Corp (HK:) increased its 2025 delivery target from 250,000 to 300,000 units, after delivering more than 135,000 in 2024, which exceeded its annual delivery target.
Morgan Stanley said the company is likely to further increase its production capacity, necessitating a further increase in its 2025 delivery target. An expanded EV offering from the company – with its SU7 Ultra and YU7 models due to launch later this year – will bring a “positive change to the product mix” in the year, MS said. The new models are also expected to have higher average selling prices than Xiaomi’s current offerings.
“Xiaomi’s stronger-than-expected shipment volume in 2024 and higher shipment target in 2025 imply excellent execution in the new EV 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 an upside of 1% from current levels.
Known for its electronic devices, Xiaomi is a newcomer to the highly competitive Chinese EV market and launched its flagship SU7 in early 2024.
But the company managed to capture significant market share despite its relatively new entry into the industry. Xiaomi has announced plans to become one of the largest EV manufacturers in the world.
China is the world’s largest auto market, with electric vehicles accounting for a large portion of the country’s sales. But this has also led to a terrible price war between local producers to grab the most market share.
EV giant Tesla Inc (NASDAQ:) recently posted its first annual decline in deliveries due to increased competition in China and sluggish demand for electric vehicles in the rest of the world.
