Xiaomi's Electric Vehicle Division Faces Slowing Growth Amid Rising Competition

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.