The Chinese tech giant Xiaomi delivered over 27,300 electric vehicles in the previous quarter, yet the division still recorded a loss exceeding $250 million.
On August 21, Xiaomi announced its Q2 revenue surged by 32% year-over-year, reaching 88.9 billion yuan (approximately $12.4 billion). This figure outpaced the forecasted 85.8 billion yuan, as per the financial services firm LSEG. The company’s net profit came in at nearly 6.2 billion yuan, surpassing the projected 4.8 billion yuan.
For the first time, Xiaomi disclosed data related to its automotive division. This segment brought in 6.2 billion yuan (around $869.2 million) in revenue. The first SU7 electric vehicle was delivered in early April. Throughout Q2, Xiaomi successfully delivered 27,307 vehicles.
However, the automotive segment remains in the red, posting a loss of 1.8 billion yuan ($252 million) for the last quarter, which translates to a loss of $9,200 per vehicle. In an interview with Bloomberg, Xiaomi’s CFO Alain Lam emphasized that the company is currently prioritizing growth over profitability. “We believe that scale will lead to future profitability. Xiaomi must continue investing in the electric vehicle sector,” he remarked.
Following the release of the Q2 financial report, Xiaomi CEO Lu Weibing expressed confidence in achieving the company’s goal of delivering 120,000 electric vehicles by the end of the year. Lu predicted that the profitability of this segment will improve as the number of deliveries increases. Since June, Xiaomi has doubled the number of shifts at its factory to ensure that over 10,000 vehicles are delivered each month.
Xiaomi first announced its entry into the electric vehicle market in 2021, aiming to diversify its business beyond its core smartphone segment. The SU7 is touted to feature superior technology, accelerating faster than both Tesla and Porsche electric vehicles.
Xiaomi’s Chairman and CEO Lei Jun has committed $10 billion in investments towards electric vehicles, with a vision to position Xiaomi among the top 5 automakers globally within the next 15-20 years.
In the smartphone sector, Xiaomi sold 42.3 million units globally last quarter, marking a 27.4% increase from the previous year. The company’s global market share for smartphones stands at 14.8%, reinforcing its position as the third-largest smartphone maker worldwide, according to IDC. In China, the company’s largest smartphone market, sales surged by 16.5%.
