Xiaomi’s electric car business becomes profitable

Xiaomi’s electric vehicle and artificial intelligence business unit has reached profitability approximately 19 months after the launch of its first electric saloon car, the SU7. The business unit officially combines “intelligent electric vehicles, AI and other new initiatives,” but electric cars alone accounted for 28.3 billion yuan in revenue in Q3, out of the business unit’s total revenue of 29.0 billion yuan. This translates to 3.45 billion euros out of 3.53 billion euros. This represents an increase of 199 per cent compared to Q3/2024 and 36 per cent compared to the second quarter of 2025.

The bottom line is that the unit remained in the black between July and September: Xiaomi reports EBIT of 700 million yuan for the division. This figure describes the operating profit before interest and taxes (gross profit minus operating expenses).

Higher sales and higher selling prices

According to the company itself, this success is primarily attributable to the increase in vehicle deliveries, but also to a rise in the average selling price. In Q3, Xiaomi increased sales from 81,302 units in the second quarter of 2025 to 108,796 units (+33.8%).

Compared to the previous year, sales rose by as much as 173.4 per cent (Q3/2024: 39,790 units). Compared to the previous year, sales rose by as much as 173.4 per cent (Q3/2024: 39,790 units). The average selling price rose by 9 per cent year-on-year from 238,650 yuan per unit to 260,053 yuan (from around 29,080 to 31,690 euros), which is primarily attributable to increased deliveries of the YU7 series with its higher average selling price.

“In October 2025, the Xiaomi YU7 series ranked first in SUV sales in mainland China,” Xiaomi emphasised in its annual report. This was also thanks to a denser sales and service network, which, as of 30 September, comprised 402 sales centres in 119 cities and 209 service centres in 125 cities in mainland China.

The gross profit margin in the ‘Smart Electric Vehicles, AI and Other New Initiatives’ segment climbed to new heights, reaching 25.5 per cent after 17.1 per cent in the third quarter of 2024. According to Xiaomi, the profit boost came from “the decrease in cost of key components, lower manufacturing cost per unit, the deliveries of Xiaomi SU7 Ultra commencing March 2025, as well as the increased gross profit margin of other related businesses,” which also had a positive effect. With such tailwinds, the smartphone giant’s relatively young unit already accounted for a quarter of the group’s total revenue in the third quarter. In Q2/2025, it was still 18 per cent, according to the annual report.

Management targets sales of 400,000 units

In a conference call with analysts on the presented financial results, Xiaomi CEO Lei Jun also updated the annual sales target. According to this, the company will already reach its original target of 350,000 electric cars delivered in 2025 this week and now expects to deliver more than 400,000 cars this year. If you add the electric cars already manufactured in 2024, Xiaomi has now manufactured about 500,000 vehicles.

However, Bloomberg writes that Xiaomi urgently needs these successes, as the group is facing headwinds in both the smartphone and electric car sectors: “A global shortage in memory chips will drive up costs for both of Xiaomi’s main business lines, and a gradual phaseout of a Chinese tax break on EV purchases will also likely sap demand,” the news agency wrote. The uncertainties have already wiped out much of Xiaomi’s share price gains this year.

ir.mi.com, bloomberg.com (Paywall)

This article was first published by Cora Werwitzke for electrive’s German edition.