Xiaomi’s EV business is poised for profitability, potentially achieving a net profit of $97 million in Q3 2025.
In June, Xiaomi founder Lei Jun told investors that Xiaomi’s EV business was expected to achieve profitability between the third and fourth quarters of this year.
That goal now appears within reach.
On October 27, a research note from China International Capital Corporation (CICC) projected that Xiaomi Auto may have achieved profitability in the third quarter, with an estimated single-quarter net profit of RMB 707 million ($97 million).
The forecast is supported by Xiaomi Auto’s strong delivery momentum and robust profit margins.
According to its second-quarter financial report, Xiaomi’s EV unit posted a gross margin of 26.4%, far exceeding Tesla’s 18%.
Among China’s new EV startups already in the black, Li Auto reported a gross margin of 20.1% in the same period.
Leapmotor and Seres (AITO) recorded gross margins of 14.1% and 28.9% respectively in their 2025 mid-year reports, placing Xiaomi just behind the latter.
Xiaomi’s automotive losses have also narrowed rapidly. The company’s second-quarter operating loss for the segment — including its EV business — fell to RMB 300 million ($41 million), one-third of the RMB 1.5 billion ($206 million) reported in Q3 2024.
Sustained delivery capacity remains another key driver of profitability for EV makers.
In the second quarter, Xiaomi delivered 81,302 vehicles. In September, its monthly sales broke the 40,000-unit mark for the first time, reaching 41,948 vehicles.
Meanwhile, the company’s average selling price (ASP) climbed from RMB 228,644 ($31,300) to RMB 253,662 ($34,700), driven by the launches of the SU7 Ultra and YU7 models.
Lei Jun has repeatedly emphasized that in the era of intelligent electric mobility, only five global automakers are likely to survive — and Xiaomi aims to become one of them within 15 to 20 years.
Standing on the brink of profitability, Xiaomi Auto is taking its first major step toward that goal.
Accelerating Toward Profitability
Among China’s EV startups, Xiaomi is not the first to reach profitability.
In 2023, Li Auto achieved its first annual profit after eight years of operations, becoming the first “new force” automaker to turn profitable.
Voyah, which began independent operations in 2021, reached profitability in just about three years — the fastest so far among emerging Chinese EV brands.
If CICC’s projection proves accurate, Xiaomi — even without counting its three years of official development — could soon claim the title of China’s fastest-profiting new energy vehicle startup.
Sales growth in high-end models remains the key to accelerated profitability. Xiaomi’s two flagship models, the SU7 and YU7, both carry average prices above RMB 210,000 ($28,800).
Before the YU7 began deliveries, Xiaomi already surpassed 20,000 monthly sales with just the SU7 alone.
By September 2025, the SU7 maintained monthly sales of 19,579 units.
As for the YU7, according to Gasgoo data, September sales reached 22,369 units, with cumulative deliveries of 47,193 units — making it another core contributor alongside the SU7.
Xiaomi’s app data shows that the delivery wait time for both SU7 and YU7 remains long, between 28 and 39 weeks.
Beyond sales, Xiaomi’s growing scale and efficient supply chain management are also evident.
The second-quarter report indicated that Xiaomi’s per-vehicle loss had narrowed to RMB 3,690 ($505), down sharply from RMB 37,000 ($5,080) a year earlier.
In short, high sales and solid margins have jointly pressed the accelerator on Xiaomi Auto’s path to profitability.
Profitability marks the start of a healthy business cycle — a positive signal for the broader EV market and a promising new chapter for Xiaomi Auto.
Racing Toward the Global Stage
Behind Xiaomi’s rapid progress toward profitability lies a broader strategic layout.
Across China’s new EV entrants, expanding product portfolios remains a key approach to boosting sales. Another essential step is global expansion.
Xiaomi has plans for both. The company’s next model — reportedly a large extended-range SUV codenamed “Kunlun” — is expected to focus on spacious interiors and luxury comfort, aligning with traditional full-size SUV proportions.
Recent sightings of camouflaged test vehicles suggest the model could make its debut soon, potentially at the Guangzhou Auto Show in late November.
Overseas markets, however, remain a longer-term target. Lei Jun has stated in a livestream that Xiaomi Auto will prioritize domestic deliveries due to overwhelming demand, with exports likely to begin around 2027.
Domestic demand has indeed placed immense pressure on production and delivery.
To meet orders, Xiaomi’s Phase I and Phase II factories are still running dual shifts.
The company’s delivery target for 2025 is 350,000 vehicles. With the ongoing optimization of its Beijing plant and ramp-up of Phase II capacity, Xiaomi is on track — and may even exceed that goal.
In June, reports indicated that Xiaomi acquired land for a third plant, covering 485,000 square meters, with a transaction value of RMB 635 million ($87 million).
If construction proceeds smoothly, Xiaomi’s production bottlenecks could ease further, paving the way for its eventual international rollout once domestic supply stabilizes.
Rapid profitability can redefine industry benchmarks — from marketing and product planning to post-profit pricing strategies.
The growing list of profitable Chinese EV startups could also intensify pressure on rivals still targeting break-even, potentially reigniting the industry’s “learn from Xiaomi” momentum.
Even if Xiaomi Auto falls slightly short of a Q3 profit, its current trajectory suggests that break-even is only a matter of time.
So, can Xiaomi Auto truly turn profitable this quarter?
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