The SU7, produced by Chinese tech company Xiaomi Corp, is displayed at the Mobile World Congress 2024 in Barcelona, Spain. [Photo/Xinhua]

Xiaomi Corp plans to deliver at least 100,000 units of its SU7 electric vehicles this year, with a goal to sell 120,000 units in total, according to its chairman Lei Jun.

Analysts said this shows the company's confidence in its burgeoning car business, though they said it is still early days before Xiaomi achieves long-term success amid intense competition.

Lei said the fresh goal represents a significant increase from its initially set first-year sales target of 76,000 vehicles while determining its production capacity.

Xiaomi delivered over 25,000 EVs by the end of June and expects to reach the 100,000-unit target by November, according to Lei, who recalled that a decision by the US government to sanction Xiaomi in early 2021 was the catalyst for the company's decision to build its first electric car.

Since then, the company has devoted a large amount of resources to developing the SU7, which has received a warm welcome from Chinese consumers.

Roy Lu, a Shanghai-based automotive analyst, said Xiaomi's early success is expected to intensify competition in China's new energy vehicle market where established automakers, startups and tech companies are all vying to expand their presence.

A price war is already on in the country's EV market, the world's largest.

Competition in the EV industry will heat up this year, with a more differentiated market landscape, said Zhang Yongwei, vice-president and secretary-general of China EV 100, a major auto industry think tank.

The next one or two years will be crucial, Zhang said, as companies that may not have the necessary competence will likely exit after a shakeout.

"The production volume and sales of NEVs in China are expected to reach 13 million units in 2024, with a year-on-year growth rate of about 40 percent," Zhang said.

In the first six months of 2024, the production and sales volume of NEVs reached 4.93 million and 4.94 million units, respectively, marking an increase of 30.1 percent and 32 percent year-on-year, according to the China Association of Automobile Manufacturers.

Amid the heightened competition, Xiaomi is also upping the ante with a new "Ultra" Prototype version of the SU7 unveiled last week. The hyper-sports version of its four-door EV features strong motors, and Lei said the company hopes to develop the fastest four-door car in the world, gas or electric, in 10 years.

The move is part of Xiaomi's broader ambition to compete with Porsche and Tesla to become a major auto manufacturer globally in the future.

In the realm of smart driving, Xiaomi's team has exceeded 1,000 members by April, with plans to expand to 1,500 by the end of 2024 and further to 2,000 by 2025. Xiaomi's smart assisted driving was launched in 10 Chinese cities by the end of May and will be available nationwide by August, the company said.

The company also expressed optimism about support from core suppliers in scaling up production, ensuring that actual delivery times are ahead of the scheduled dates on its app.

Xiaomi plans to establish a robust sales and service network by the end of 2024, with 219 sales outlets across 46 cities and 143 service centers covering 86 cities.

Experts said it remains to be seen whether Xiaomi can really afford the capital and time needed for the cash-intensive smart car business, given that several Chinese companies that had entered the segment faced severe financial difficulties. Some of them have even gone bankrupt.

Xiaomi has pledged to invest $10 billion in autos over a decade to crack the highly competitive NEV market in China. It has already invested significant resources in the development of several key technologies, such as autonomous driving and electrical machinery, over the past three years.