Xiaomi turns a quarterly profit on EVs while many rivals still struggle

Xiaomi turns a profit on electric cars

In November 2025, Xiaomi reported its first-ever quarterly operating profit for its smart EV, AI, and other new initiatives segment. The operating profit was RMB 700 million ($98 million); group revenue totaled RMB 113.1 billion, with the segment generating RMB 29.0 billion in revenue.

This milestone came just 19 months after Xiaomi launched its first car, the SU7 sedan, in April 2024. While rivals like Ford and Rivian continue to post losses on EVs, Xiaomi’s early profitability highlights how a smartphone company has successfully disrupted the auto industry.

Massive sales volume drives the earnings

Xiaomi delivered 108,796 vehicles in Q3 2025 (up from 81,302 in Q2). October set a new record at 48,654 deliveries, and November again exceeded 40,000. This rapid growth enabled Xiaomi to spread factory costs across more vehicles, thereby lowering per-unit production expenses.

Xiaomi raised full-year 2025 guidance to > 400,000 deliveries and marked its 500,000th vehicle on Nov 20, 2025 (19 months since SOP).

The ecosystem saves marketing money

Xiaomi leverages its Human × Car × Home ecosystem, powered by HyperOS, to integrate smartphones, smart home devices, and cars. This strategy allows Xiaomi to cross‑promote vehicles directly to millions of existing device owners.

Due to this ecosystem, Xiaomi spends significantly less on traditional advertising compared to legacy automakers. TechCrunch noted that the SU7 and YU7 launches were promoted seamlessly through Xiaomi’s existing platforms, significantly lowering customer acquisition costs.

The new YU7 SUV boosts margins

Launched in June 2025, the YU7 SUV quickly became Xiaomi’s best‑selling model. CPCA data shows 315,376 YU7 units sold in October 2025, overtaking Tesla’s Model Y in China that month.

SUVs typically carry higher profit margins than sedans, and the YU7’s success lifted Xiaomi’s average selling price. Electrive reported that Xiaomi’s vehicle ASP rose by 9% in Q3 2025, driven by strong demand for the YU7.

Manufacturing speed sets a new record

On November 20, 2025, Xiaomi announced production of its 500,000th EV, achieved just 19 months after its first deliveries in April 2024. This pace is unprecedented among Chinese EV startups.

Xiaomi’s Hypercasting manufacturing technology, which casts large sections of the car frame as a single piece, reduces the parts count and welding steps.

The SU7 Ultra adds luxury profit

The SU7 Ultra launched on February 27, 2025, at a price of 529,900 yuan ($73,100). Deliveries began in March, with resale listings ranging from 548,900 to 648,800 yuan, reflecting strong demand.

With 1,526 hp and a 0–100 km/h acceleration time of 1.98 seconds, the Ultra serves as a halo product. While volumes are lower than the standard SU7, its high margins and premium positioning enhance Xiaomi’s brand image and profitability.

Strong supply chain lowers part costs

Xiaomi’s EV division benefits from its established global supply chain in semiconductors, displays, and sensors. As one of the world’s largest smartphone makers, Xiaomi leverages long‑standing vendor relationships to secure favorable pricing on high‑tech components.

Analysts covering Xiaomi’s Q3 2025 results noted that procurement leverage was a key factor in achieving its first operating profit of 700 million yuan ($98M). By sourcing automotive parts through the same channels as its consumer electronics, Xiaomi lowers per‑unit costs compared to newer EV startups.

High software revenue adds to profit

Beyond hardware, Xiaomi generates recurring revenue from software and connected services. HyperOS integrates cars with smartphones and smart homes, enabling paid features such as advanced driver assistance, premium infotainment, and cloud services. These subscriptions continue to generate income after the initial vehicle sale.

In Q3 2025, Xiaomi grouped EV and AI under its innovative businesses segment, which reported an operating profit of 700 million yuan. TechCrunch and Automotive News highlighted that high-margin software revenue is a major contributor, giving Xiaomi an advantage over traditional automakers that are still developing subscription models.

The battery chemistry is cheaper to make

Xiaomi uses LFP (Lithium Iron Phosphate) batteries in its standard-range models, which are less expensive to produce than nickel-based chemistries. BloombergNEF’s 2025 data show that LFP cell costs are 15–20% lower than those of NMC cells, making them ideal for mass-market EVs.

While LFP packs offer slightly less energy density and reduced range in cold weather, they are safer and more durable. SAE technical papers confirm that LFPs’ cycle life and thermal stability make them attractive to budget-conscious buyers, aligning with Xiaomi’s cost-saving strategy.

Efficient factory design cuts energy waste

Xiaomi’s Beijing EV plant reached its 500,000th vehicle milestone in Nov 2025, just 19 months after production began. The factory utilizes Hypercasting to produce large frame sections as single pieces, thereby reducing the number of welding steps and parts.

Automation is another efficiency driver. Industry reports note that Xiaomi’s plant deploys over 1,000 robots, achieving cycle times of 76 seconds per vehicle. This high level of automation reduces labor intensity and supports rapid scale‑up.

The brand loyalty reduces incentives

Xiaomi’s strong consumer brand reduces the need for discounts. Millions of smartphone and smart home customers form a ready base for EV sales, lowering customer acquisition costs. The Business Times reported that Xiaomi promoted the SU7 and YU7 directly through HyperOS, thereby avoiding expensive advertising campaigns.

As a result, Xiaomi maintained transaction prices without heavy incentives. Automotive News noted that while legacy automakers often rely on rebates to clear EV inventory, Xiaomi’s fan base allowed it to sell at full price, protecting margins.

Vehicle architecture is simplified

The SU7 sedan and YU7 SUV share Xiaomi’s Modena platform, enabling parts commonality across models. Shared modules include battery packs (LFP and NMC options), power electronics, and infotainment systems. This reduces the number of unique part counts and simplifies supply chain management.

Electrive reported that platform sharing helped Xiaomi ramp production quickly, avoiding delays and lowering costs. SAE technical papers confirm that common architectures reduce complexity and improve factory efficiency, supporting Xiaomi’s rapid scale.

Want to see just how fast demand is growing? Check out how Xiaomi’s newest EV racked up 200,000 orders in just minutes.

A successful model for EV profitability

Xiaomi’s EV division achieved profitability in Q3 2025, reporting 700 million yuan operating profit after delivering 108,796 vehicles that quarter. By November, it had produced its 500,000th car, setting a record pace among Chinese EV startups.

Analysts attribute this success to three pillars: massive sales volume, efficient manufacturing, and ecosystem‑driven software revenue. CNBC noted that Xiaomi’s tech‑first approach allowed it to profit from EVs just 19 months after launch, while rivals continue to lose money per unit.

Curious how Xiaomi is speeding things up even further? Click here to see how SU7 delivery times just got much shorter.

What do you think about Xiaomi turning a profit this fast? Share your thoughts below and drop a like if this surprised you!

Read More From This Brand:

• Xiaomi SU7 Review – Can a Phone Maker Build a Great Car?
• Xiaomi’s SU7 Ultra Just Proved It Can Outrun Porsche and Rimac
• The Xiaomi SU7 Ultra and Nio EP9 show how far electric cars have come

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This slideshow was created with the assistance of AI and human input.