Xiaomi EV Division Set to Achieve Profitability by Late 2025

Chinese Tech Giant’s Electric Vehicle Division Shows Strong Growth with 132,800 Deliveries, Targeting Late 2025 Profitability

Key Facts

• Xiaomi CEO Lei Jun forecasts EV division profitability by second half of 2025, potentially becoming China’s fastest EV maker to achieve profitability
• Company delivered over 132,800 vehicles by May’s end, achieving nearly 38% of its 2025 target of 350,000 vehicles
• Q1 2025 EV division revenue reached RMB 18.6 billion with 23.2% gross margin, while operating losses narrowed to RMB 500 million

Introduction

Xiaomi’s ambitious electric vehicle venture shows promising signs of financial success, with CEO Lei Jun announcing potential profitability by late 2025. The tech giant’s strategic expansion into the EV market demonstrates remarkable progress, with its SU7 model outperforming Tesla’s Model 3 in sales within just eight months of launch (According to Fortune).

Key Developments

Xiaomi’s EV division, established in 2021, has rapidly scaled its operations. The company’s first model, the SU7 sedan, secured 19,000 pre-orders in three days and sold over 100,000 units from April to December 2024. The upcoming YU7 SUV has generated unprecedented interest, with registration numbers triple those of the SU7’s launch.

The company’s expansion includes plans for up to 20,000 global retail stores, supporting both electronics and EV business lines. The YU7 electric SUV, scheduled for mid-2025 launch, promises a driving range of 835 kilometers, positioning it competitively against premium rivals.

Market Impact

Xiaomi’s stock has responded positively to its EV success, with XIACF rallying 51% year-to-date. The company’s Q1 2025 performance shows encouraging trends, with the EV and AI division’s operating losses narrowing significantly from RMB 700 million to RMB 500 million quarter-over-quarter.

The company’s premium positioning strategy is evident in products like the SU7 Ultra EV, which boasts impressive specifications including 1,548 horsepower and rapid acceleration. This approach aims to establish Xiaomi as a serious competitor in the high-end EV market.

Strategic Insights

Xiaomi’s integration of its technology ecosystem into its vehicles represents a key competitive advantage. The company leverages its expertise in AI and IoT to enhance user experiences and drive sales growth. This tech-first approach distinguishes Xiaomi from traditional automakers.

Expert Opinions and Data

Wall Street analysts maintain a Strong Buy consensus rating for Xiaomi, based on 11 Buys and two Hold recommendations. The average stock price target suggests a 31% upside potential, reflecting confidence in the company’s EV strategy.

Market analysts note that while competitors like Nio and XPeng target profitability this year, Xiaomi’s rapid progress positions it uniquely in the sector. Li Auto’s achievement of profitability in Q4 2022 serves as a benchmark for the industry.

Conclusion

Xiaomi’s EV division demonstrates strong momentum toward profitability, supported by robust sales, expanding retail presence, and strategic technology integration. The company’s performance metrics and market reception indicate its growing influence in the premium EV sector, while maintaining its trajectory toward stated financial goals.