Xiaomi’s electric vehicle and other new initiatives business narrowed its operating loss in the second quarter of 2026 as vehicle deliveries continued to grow, although the segment remained unprofitable.
The segment recorded an operating loss of 2.6 billion yuan ($383 million) in the quarter, compared with a loss of 3.1 billion yuan in the first quarter. It was the second consecutive quarterly operating loss for the business.
Revenue increased 17.1% year on year to 24.9 billion yuan and was 25.3% higher than in the previous quarter.
EV Revenue Reaches 23.9 Billion Yuan
Electric vehicles accounted for the majority of segment revenue, generating 23.9 billion yuan in the second quarter, up 15.9% from a year earlier.
Revenue from other businesses increased 56.5% to 1 billion yuan. Xiaomi said this included revenue related to its MiMo large language model series and other artificial intelligence activities.
The segment’s gross margin, however, declined to 19.2%, compared with 26.4% a year earlier and 20.1% in the first quarter.
Xiaomi attributed the year-on-year decline primarily to a lower proportion of Xiaomi SU7 Ultra deliveries, higher prices for key components and increased costs associated with its AI business.
EV Deliveries Rise 28.2%
Xiaomi delivered 104,199 vehicles in the second quarter, an increase of 28.2% from the same period a year earlier.
The growth came as retail passenger vehicle sales in China declined 22% during the same period, according to Xiaomi.
The average selling price of Xiaomi vehicles was 229,312 yuan in the second quarter, down 9.6% year on year and 2.5% from the previous quarter.
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The company attributed the decline in average selling price partly to a smaller contribution from the higher-priced SU7 Ultra.
As of Aug. 17, cumulative deliveries of the Xiaomi SU7 series had exceeded 500,000 units.
Xiaomi said the SU7 series ranked first in sales among pure-electric sedans priced above 200,000 yuan in mainland China during the first half of 2026.
Higher Spending Keeps Pressure on Profitability
Operating expenses for Xiaomi’s new initiatives increased 25.7% year on year to 7.4 billion yuan in the second quarter, compared with 5.9 billion yuan a year earlier.
The company-wide research and development budget rose 18.9% to 9.2 billion yuan, with the increase driven primarily by new initiatives and investment in AI infrastructure.
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Xiaomi’s capital expenditure reached approximately 3.6 billion yuan during the quarter, of which 2.4 billion yuan was allocated to the new initiatives segment.
The business had previously reached quarterly operating profitability in the third quarter of 2025 and recorded its first full-year operating profit for 2025.
Xiaomi Expands EV Lineup
Xiaomi is continuing to broaden its vehicle portfolio as it develops its EV business.
In July, the company unveiled the Xiaomi Kunlun Technical Architecture and introduced its first extended-range SUV series, the Xiaomi Sky Nomad.
The Sky Nomad series has a stated CLTC combined range of up to 1,705 kilometres.
The expansion of the product lineup comes as Xiaomi continues investing in EV manufacturing, artificial intelligence and related technologies while seeking to improve the profitability of its new initiatives business.