(Bloomberg) -- Xiaomi Corp.’s quarterly revenue exceeded analyst expectations as the smartphone company gained a foothold in the cutthroat electric vehicle sector it entered in March.

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Sales rose 31% to 92.5 billion yuan ($12.8 billion) in the September quarter, according to a company statement on Monday, higher than the average estimate of 90.3 billion yuan from analysts surveyed by Bloomberg. About 9.5 billion yuan in revenue came from its EV business, which together with other new initiatives incurred an adjusted net loss of 1.5 billion yuan.

Xiaomi is targeting 130,000 deliveries of its first electric sedan, the SU7, this year, billionaire co-founder Lei Jun said in a social media post hours before the earnings results announcement. The company’s now ramping up production to reduce wait times for the cars, with capacity reaching 20,000 units per month in October.

Xiaomi is trying to reduce its reliance on a volatile smartphone market dominated globally by Apple Inc. and Samsung Electronics Co., though with EVs it’s getting into a crowded arena. China’s EV market is the world’s largest, but the industry faces high tariffs for exports to the US and European Union.

The firm expects its smartphone and EV businesses will grow further in 2025, Xiaomi President Lu Weibing said on a call with reporters.

“Our smartphone business will still grow next year,” Lu said. “EV, as our new business, will expand the most among all our businesses next year.”

Xiaomi aims to begin making and selling a sport utility vehicle similar to Tesla Inc.’s Model Y as early as 2025, Bloomberg News previously reported.

“Such capacity expansion might not only boost Xiaomi’s revenue growth, but could also enlarge Xiaomi’s scale advantage, which may eventually translate into better profitability,” Morgan Stanley said in a report published ahead of the earnings release.

Net income in the period was 5.35 billion yuan, compared to an estimated 4.73 billion yuan among analysts surveyed.

Xiaomi kept its spot as the world’s No. 3 maker of smartphones in the period. Handset shipments increased 3.3% in the third quarter, compared with a 3.5% rise at Apple and 4.0% growth in the broader sector.

(Updates with comments from company president starting in fourth paragraph.)