Xiaomi’s electric vehicle (EV) business is expected to turn profitable in the second half of 2025, the company’s founder and CEO Lei Jun said at its annual Investor Day event, underscoring the smartphone maker’s ambitions in China’s highly competitive EV market.
If achieved, the milestone would make Xiaomi the fastest among China’s new automotive brands to reach profitability. Rivals Nio and Xpeng, both launched around a decade ago, are targeting quarterly profitability this year, while Li Auto has remained profitable since the fourth quarter of 2022. Leapmotor reported its first quarterly profit at the end of 2024.
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Xiaomi officially entered the automotive industry in March 2021 and rolled out its first EV model, the SU7 electric sedan, in March 2024. In the first quarter of 2025, its EV business generated RMB 18.1 billion ($2.5 billion) in revenue, up 11% from the previous quarter, according to the company’s unaudited financial report released on May 27.
Innovative businesses including EV and AI contributed RMB 18.6 billion in total revenue in the first quarter, with RMB 500 million derived from other new ventures. Gross margins from these segments rose to 23.2% from 20.4% in the prior quarter, while operating losses narrowed to RMB 500 million from RMB 700 million in the fourth quarter of 2024.
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Lei Jun emphasized Xiaomi’s confidence in its long-term EV strategy and indicated that sustained improvements in efficiency and scale are key to achieving the profitability target. The announcement comes as competition intensifies in China’s EV sector, with established tech firms increasingly vying for a share of the growing market.