Xiaomi’s Electric Cars: Profit Mirage or Near-Term Reality?

For Chinese tech giant Xiaomi, the car business has so far been more of an expensive indulgence than a profit engine. Yet the latest figures suggest that selling cars at a loss may not be a permanent curse. Not long ago, each electric sedan or crossover left Xiaomi with a hefty financial bruise, but those losses are now melting away like spring ice—slowly, but steadily.

By the second quarter of this year, Xiaomi Auto’s operating loss stood at 41 million dollars, which works out to about 507 dollars lost per vehicle on 81,302 units delivered. That is a marked improvement from the first quarter, when losses ran at 903 dollars per car, and a far cry from the 1,400-dollar hit per unit earlier still. At this pace, Xiaomi could feasibly break even by year’s end, and analysts are cautiously optimistic.

Prices are also on the rise. Where the average Xiaomi EV cost roughly 31,000 dollars a year ago, it now hovers around 35,000. The premium SU7 Ultra, starting at 72,700 dollars and stretching to a Nürburgring edition priced at a decidedly luxurious 112,000, has lifted the company’s average transaction value. The logic is simple: the more expensive the model, the greater the margin, provided customers are willing to pay.

But the challenge is not confined to spreadsheets. Demand has become a double-edged sword. In June, the YU7 Max crossover sold out in a single day, and waiting times now stretch to as long as 58 weeks. Depending on the configuration, most customers face delays ranging from 41 to 58 weeks—close to a year, if not more.

For those unwilling to wait, Xiaomi’s founder and CEO Lei Jun personally offers a list of alternatives, including rivals like the Xpeng G7, Li Auto i8, and even Tesla’s Model Y, which competes directly with the YU7. The message between the lines is clear: Xiaomi does not fear sharing the market so long as enthusiasm and loyalty for its own brand remain intact.

In short, Xiaomi’s automotive arm is not yet a goose that lays golden eggs, but neither is it a bottomless pit. If the current trajectory holds, the next quarterly report may well glint with silver. And even if it does not, the ride has been compelling. After all, if a company can convince customers to wait a year for a car, it is probably doing something right.