Xiaomi Group released its Q1 2025 financial report yesterday. The report shows significant progress in its electric vehicle business, with 75,869 SU7 series vehicles delivered during the quarter. The company announced plans to expand production capacity, with cumulative deliveries of the SU7 series now exceeding 258,000 units.

In the first quarter of 2025, Xiaomi’s smart electric vehicle and AI innovation business segment generated total revenue of 18.6 billion yuan (2.58 billion USD). Electric vehicle sales accounted for 18.1 billion yuan(2.51 billion USD), while other related businesses contributed 500 million yuan (70 million USD).

The smart electric vehicle and AI segment reported a gross profit margin of 23.2% for the quarter, with an operating loss of 500 million yuan (70 million USD). Based on these figures, Xiaomi’s electric vehicle business posted an average loss of 6,500 yuan (903 USD) per vehicle in Q1 2025, a substantial improvement from 2024 when the company’s EV division recorded a net loss of 6.2 billion yuan (862 million USD) on 136,854 delivered vehicles, representing an average loss of approximately 45,000 yuan (6,250 USD) per unit.

Addressing the losses, Xiaomi Group Partner and President Lu Weibing previously explained that the company’s automotive business is still in its early stages and hasn’t yet achieved sufficient scale. He noted that heavy initial investments and cost allocation led to early-stage losses with self-built factories and proprietary core technologies, following the pattern seen across the electric vehicle industry. Lu predicted that as delivery volumes increase, losses will continue to narrow as economies of scale become more apparent.

Given current trends, particularly the strong demand for the higher-priced SU7 Ultra model, Xiaomi’s automotive business is on track to break even or begin generating profits in Q2 2025 potentially.

During the earnings call, Lu Weibing also highlighted the enthusiastic market response to Xiaomi’s upcoming YU7 model. He revealed that following the YU7’s pre-release, customer interest has exceeded that of the SU7 at a comparable stage. As of May 25, the number of users providing contact information after the “YU7 Technology Launch Event” was approximately three times higher than for the SU7’s launch event during the same period.

“The YU7 appeals to a broader audience than the SU7, and we are very confident about its prospects,” Lu stated.

The YU7 is scheduled for official release in July this year, with rumours suggesting a starting price of 245,900 yuan (34,000 USD). This positions it competitively against Tesla’s refreshed Model Y, which starts at 263,500 yuan (36,600 USD) for the standard range version and 313,500 yuan (43,5 USD) for the all-wheel drive long-range version.