Xiaomi Auto narrowed its operating loss in the second quarter of 2025, reporting a deficit of 300 million yuan (41 million USD). This brings the company closer to its ambitious profitability target set by CEO Lei Jun for later this year.

The company delivered a total of 81,302 new vehicles in Q2 2025. This translates to an average operating loss of approximately 3,700 yuan (507 USD) per vehicle, a marked reduction from previous quarters. In Q4 2024, Xiaomi Auto recorded a loss of 700 million yuan (96 million USD) on 69,697 deliveries, equating to about 10,043 yuan (1,376 USD) per vehicle. The loss further decreased to 500 million yuan (68 million USD) in Q1 2025, with 75,869 units delivered, or roughly 6,600 yuan (905 USD) per vehicle.

The narrowing losses are accompanied by a rising gross margin for Xiaomi’s smart electric vehicle and AI innovation businesses. This figure climbed from 15.4% in Q2 2024 to 26.4% in Q2 2025.

The average selling price (ASP) for Xiaomi’s smart electric vehicles also saw a notable increase, rising 10.9% from 228,644 yuan (31,340 USD) per vehicle in Q2 2024 to 253,662 yuan (34,770 USD) in Q2 2025, largely driven by the introduction of the SU7 Ultra. The Xiaomi SU7 Ultra, launched on February 27, targets the high-end market with a starting price of 529,900 yuan (72,650 USD) for the standard version, 629,900 yuan (86,390 USD) for the “Racing Package,” and 814,900 yuan (111,760 USD) for the “Nürburgring Limited Edition,” directly challenging traditional luxury brands.

While Xiaomi SU7 deliveries have gradually improved following initial production ramp-up issues – with over 258,000 units delivered by May 21, 2025 – the Xiaomi YU7 is now grappling with similar early-stage capacity limitations.

The YU7 is offered in two batches: “ready stock” YU7 Max models (starting at 350,400 yuan, or 48,000 USD), which sold out on the launch night of June 26, and “customised new cars.” Customers who locked orders on June 27 for customised models have reported estimated delivery times of 50-53 weeks, meaning a wait of nearly a year. Xiaomi’s official website currently lists even longer wait times for new YU7 orders: 55-58 weeks for the Standard, 47-50 weeks for the Pro, and 41-44 weeks for the Max.

In its Q2 2025 financial report, the company is keenly aware of the risks associated with extended delivery periods, which can negatively impact market reputation, future sales, and increase customer churn.

Editor’s comment

Over the past three quarters, Xiaomi’s average loss per vehicle sold was 1,376, 905, and 507 USD, respectively. This indicates that Xiaomi has been able to reduce its average loss per vehicle sold by 400-500 USD each quarter. Following this trend, an optimistic estimate suggests that Xiaomi’s automotive business could achieve profitability as early as the next quarter. Should this not materialise, it is highly likely that Xiaomi will reach profitability in its automotive business by the fourth quarter.