Electric Cars

In the initial months of 2025, Xiaomi's electric vehicle (EV) division experienced a noticeable slowdown in growth. Sales for the first quarter amounted to 18.1 billion yuan, marking an 11% increase compared to the previous quarter. This figure represents a significant deceleration from the robust growth rates observed in the third and fourth quarters of 2024. Various factors, including seasonal trends and structural changes within the company, have contributed to this shift. Additionally, the reclassification of business units complicates the analysis of financial performance. Despite these challenges, the EV segment remains a crucial component of Xiaomi's innovation-driven strategy, with its debut model, the SU7 sedan, driving deliveries.

During the first quarter, Xiaomi reported delivering 75,869 units of its SU7 electric sedan, reflecting a nearly 9% rise over the previous quarter. Although impressive, this figure falls short of the quarterly target necessary to meet the revised annual delivery goal of 350,000 vehicles. The company is now pinning hopes on its upcoming YU7 SUV, scheduled for launch in July, to bolster sales momentum. Meanwhile, the average selling price of Xiaomi's EVs increased slightly to 238,301 yuan per unit, attributed partly to the introduction of the higher-end SU7 Ultra variant.

Beyond sales figures, Xiaomi faces challenges related to its brand perception and product reliability. Reports of accidents involving the SU7 due to alleged braking system inadequacies have surfaced on social media, potentially impacting consumer trust. Furthermore, an incident in April involving the semi-autonomous driving feature of the SU7 drew widespread attention, leading to speculation about delays in the YU7's promotional events. These developments underscore the importance of addressing safety concerns as Xiaomi expands its EV lineup.

On a broader scale, Xiaomi's overall revenue for the first quarter reached 111 billion yuan, with the smartphone and AIoT segments contributing the lion's share at 83%. The remaining 17% encompasses the EV business alongside AI and other innovative ventures. Despite slower growth in the EV sector, Xiaomi continues to position itself as a technology leader by integrating advanced features into its products while maintaining competitive pricing.

As Xiaomi navigates the complexities of the EV market, the coming quarters will be pivotal in determining whether it can regain its earlier momentum. With the anticipated launch of the YU7 and continued improvements in both technology and public perception, the company aims to solidify its presence in the rapidly evolving automotive landscape. Achieving its ambitious delivery targets will require not only enhanced production capabilities but also effective strategies to address any lingering doubts among potential customers.

In the first quarter, Xiaomi's electric vehicle business generated sales of 18.1 billion yuan (approximately 2.2 billion euros), reflecting an increase of around eleven percent compared to the previous quarter. This marks a slower growth rate than in recent periods, as earlier quarters saw growth rates of 71.5% and 52.1%. Despite this, the first quarter is traditionally weaker due to factors such as the Chinese New Year. With structural changes in its business units, it becomes challenging to assess operational performance, yet EVs remain central to Xiaomi’s innovative ventures.

During the early months of 2025, Xiaomi reported delivering 75,869 electric vehicles, all from its debut model, the SU7 sedan. This represents nearly a 9% increase over the last quarter of 2024. However, this figure falls short of the company's revised target of 350,000 deliveries for the year, indicating that future quarters will need to see significant improvements. The upcoming YU7 SUV, set for release in July, might be key to achieving these goals.

Looking deeper into Xiaomi's financial structure, the company redefined its business segments at the end of 2024 to include AI alongside electric vehicles. Combined, these sectors brought in 18.6 billion yuan in revenue, with a gross margin of 23.2%, but incurred an operating loss of 500 million yuan. While the exact profitability of EVs without AI remains unclear, their dominance within this segment is evident.

Over the entire year of 2024, Xiaomi's innovation division generated 32.8 billion yuan in revenue, with electric vehicles contributing the lion's share of 32.1 billion yuan. Since deliveries began in April 2024, this achievement is remarkable. Yet, concerns about safety and public perception may impact future growth. Reports of braking system issues and accidents involving semi-autonomous driving features have surfaced, potentially delaying certain product launches.

Average selling prices for Xiaomi's EVs rose slightly to 238,301 yuan per unit in the first quarter, partly due to the introduction of the more expensive SU7 Ultra model. Sales occur through 235 dealerships across 65 cities in China. Overall, Xiaomi's total revenue for the quarter was 111 billion yuan, with smartphones and IoT making up 83%, while EVs and related technologies accounted for the remaining 17%.

As Xiaomi continues to expand its automotive lineup, addressing both market demand and consumer trust will be crucial. The launch of new models like the YU7 could help bridge the gap between current delivery numbers and ambitious targets, reinforcing Xiaomi's position in the competitive EV landscape.