Xiaomi’s losses on each electric vehicle: $5,600 in losses in the first quarter
Headlines about Chinese electric vehicles almost always start with prices, and it’s no surprise, as they are often incredibly low. However, what remains in the shadows is the fact that most companies producing these cars often incur losses on every vehicle that leaves the factory. Xiaomi has become the latest name on this list.
Technology giant in the automotive market
The technology giant, often called the Chinese equivalent of Apple, created a smart electric vehicle and artificial intelligence division several years ago with a clear goal — to build cars. Currently, two models are on sale: the SU7 sedan, which has received genuine acclaim, and the YU7 SUV. Both models have found buyers in significant numbers. In the first quarter alone, Xiaomi sold 80,856 vehicles across China.
According to company documents published by CarNewsChina, Xiaomi also received 19.9 billion yuan (about $2.9 billion) in revenue for the same period, but recorded an operating loss of 3.1 billion yuan ($457 million). This amounts to a loss of approximately $5,600 on each car sold this year. From a financial perspective, the situation for Xiaomi is not improving but rather worsening.
Comparison with last year
During the first three months of 2025, the company sold 75,869 vehicles. Although this is 6.6 percent less than this year, the company’s losses were also significantly smaller, to the extent that it lost only about $900 on each car sold.
Losing money as fast as the cars accelerate
One obvious lever is the average transaction price, which currently stands at only 235,000 yuan (about $34,600). Attracting more buyers to higher-margin options would quickly change the situation. The new 990-horsepower YU7 GT starts at 389,900 yuan ($57,300). The flagship SU7 Ultra, aimed at hypercars, starts at 529,900 yuan (just over $78,000). None of these models are mass-market, but every unit sold raises the average price.
Strong sales in April
Xiaomi showed particularly strong sales in April after a dip in February and March. Last month, the company delivered 36,702 vehicles, significantly more than the 21,440 sold in March and the 20,414 recorded in February. However, sales have not yet recovered to the peak of 50,212 vehicles achieved in December.
Despite significant losses on each vehicle, Xiaomi is demonstrating impressive sales growth dynamics, especially after the launch of new models. The company is betting on premium versions of its electric vehicles, which have significantly higher margins. If demand for models like the SU7 Ultra and YU7 GT continues, this could substantially improve financial performance in the coming quarters. At the same time, competition in the Chinese electric vehicle market remains extremely fierce, and many players are also operating on the brink of profitability, making the fight for profitability a real challenge for all market participants.