Chinese electronics giant Xiaomi is projecting a turnaround in its electric vehicle (EV) division, with profitability expected as early as the second half of 2025, CEO Lei Jun told investors this week.
Speaking at Xiaomi's annual investor conference, Lei said losses in the company's EV unit are narrowing and that the business could break even in the third or fourth quarter of 2025, according to Chinese financial outlet Yicai.
Lei also revealed that Xiaomi began investing in robotics research and development five years ago. Today, the company is already piloting robotic technologies in its automotive factory. Meanwhile, Xiaomi is actively developing its automotive chips, with a launch expected soon.
He reaffirmed the company's long-standing commitment to capping hardware profit margins at 5%, underscoring Xiaomi's strategy of delivering high-performance products at accessible prices.
Steering clear of China's EV price war
The update comes amid Xiaomi's growing automotive ambitions, following the March launch of its debut EV model, the SU7. In May, the company also unveiled a high-performance SUV — the Xiaomi YU7 — though it has not yet disclosed pricing. Addressing speculation that the YU7 would cost CNY235,900 (US$32,744), Lei dismissed the figure as inaccurate and noted that official pricing would only be confirmed a day or two before sales open.
Xiaomi's SU7, which starts at CNY215,900, is priced below rivals such as Tesla's Model Y, which sells in China for CNY263,500. The pricing strategy highlights Xiaomi's competitive approach in a market increasingly defined by steep discounting and rapid innovation.
China's EV market has recently reignited a fierce price war, prompting government concern over what regulators have called disorderly competition. The China Association of Automobile Manufacturers (CAAM) has warned that unsustainable pricing could destabilize the industry.
In response, Lei emphasized that Xiaomi would not engage in a race to the bottom. "Xiaomi will not allow involution and will not participate in a price war," he said, positioning Xiaomi as a premium yet accessible brand focused on value rather than aggressive discounting.
Safety scrutiny and government oversight
Xiaomi's auto division has faced recent scrutiny following a fatal accident involving its SU7 model. In the aftermath, Chinese regulators reiterated the need for accurate language in marketing smart driving features and have begun reviewing the safety of design elements such as flush, retractable door handles.
Despite being a newcomer, Xiaomi's EV unit is already generating substantial revenue. In the first quarter of 2025, the company reported CNY18.6 billion in revenue from its EV and AI innovation segments, with gross profit reaching CNY4.3 billion and a margin of 23.2%. Operating expenses, however, stood at CNY4.8 billion, keeping the business in the red for now.
Deliveries of the SU7 hit 76,000 units in the first quarter alone, bringing the total number of cars delivered since launch to 258,000 — a strong showing for a debut product in one of the world's most competitive EV markets.
Article edited by Jerry Chen
