Xiaomi Obtains $5.5 Billion to Speed Up Electric Vehicle Growth

Xiaomi Corp, based in China, announced on Tuesday that it had secured $5.5 billion from a larger-than-planned share sale as it advances its ambitious plans for electric vehicle production.

In its statement to the Hong Kong Stock Exchange, the company announced that it sold 800 million shares at a price of HK$53.25 per share.

Xiaomi, which is the third-largest smartphone manufacturer globally and began producing electric vehicles last year, originally intended to sell 750 million shares but expanded the deal during the bookbuilding process.

The ultimate price was closer to the lower end of the range of HK$52.80 to HK$54.60 that was indicated to investors at the time of the deal’s launch on Monday.

The price represented a 6.6% reduction compared to Xiaomi’s closing price of HK$57 on Monday. Xiaomi stated that the funds garnered would be allocated to expedite its business expansion as well as research and technology development.

After 15 years of selling smart gadgets, household appliances and smartphones, Xiaomi started making EVs last year with the introduction of the SU7 sedan.

Xiaomi announced last week that its revenue for the fourth quarter had surged by nearly 50% and that it was raising its electric vehicle delivery target for this year from 300,000 to 350,000.

In 2024, it generated revenue of 32.1 billion yuan ($4.4 billion) from its EV business, delivering over 135,000 SU7 sedans. The company stated that it intended to begin international car shipments in 2027.

According to Chinese media, the tech company has acquired a new 52-hectare (128.5-acre) land parcel in southern Beijing to construct the third phase of its auto factory as it increases its annual shipment target.

Xiaomi President Lu Weibing announced last week that the company will allocate approximately 7-8 billion yuan, which is a quarter of its total research and development budget of 30 billion yuan for 2025, to artificial intelligence.

Xiaomi’s agreement is part of a wave of capital-raising efforts by Chinese companies in Hong Kong, driven by favorable sentiment toward the tech sector.

The meeting that President Xi Jinping held with leading figures from the tech industry last month was regarded as a clear indication that the rigorous government oversight of the sector initiated in 2020 was beginning to relax.

According to LSEG data, prior to Xiaomi’s share sale, Chinese companies had engaged in equity capital market activities totaling $16.8 billion in the first quarter, which is more than double the amount for the same period last year.