Xiaomi Corp. is focusing on growth in its electric vehicle (EV) division, aiming to become one of the world's largest automakers within the next 10 to 20 years.

Billionaire founder Lei Jun has pledged to invest $10 billion into the carmaking venture, seeking to replicate Xiaomi's smartphone success and rank among the top five carmakers.

Chief Financial Officer Alain Lam acknowledged that the nascent EV business, which launched just five months ago, will require time to achieve profitability.

The company has raised its EV delivery target for 2024 from 100,000 to 120,000 vehicles, anticipating faster shipments and reduced losses.

In the second quarter of 2024, Xiaomi reported an adjusted net loss of 1.8 billion yuan ($252 million), delivering only 27,307 vehicles and incurring a loss of approximately 60,000 yuan per vehicle sold.

Xiaomi is expanding its EV lineup, with plans to introduce a sport utility vehicle comparable to Tesla's Model Y by 2025, and has recently acquired a site in Beijing for capacity expansion.

Currently, Xiaomi is only selling its SU7 model in China but is exploring global expansion, having showcased its sedan at the Olympic Games in Paris.

Despite potential challenges such as import tariffs from the European Commission, Xiaomi remains focused on meeting domestic demand while considering international markets.

Following the announcement of its EV strategy, Xiaomi's shares rose by 8.5%, reflecting investor optimism regarding its electric vehicle business.

The company's strategy for its EVs mirrors its successful approach in the smartphone sector, emphasizing value-for-money to achieve scale and future profitability.