The fastest profit-generating new force in history! Xiaomi Auto netted 900 million yuan last year, with a gross profit margin of 24.3%, ranking second in the industry | Mirror Pro

How does Xiaomi Auto achieve a miraculous latecomer profitability?

Xiaomi truly makes its competitors envious. In less than two years since the launch of its first car, Xiaomi’s automotive business has achieved full-year profitability. On March 24, Xiaomi Group released its financial report for 2025. The report shows that Xiaomi Group’s total revenue for 2025 is 457.3 billion yuan, a year-on-year increase of 25.0%; adjusted net profit is 39.2 billion yuan, a year-on-year increase of 43.8%, setting a historical best performance.

The most significant highlight is the intelligent electric vehicles and AI innovation business. The report indicates that in 2025, Xiaomi’s revenue from the intelligent electric vehicle and AI innovation business segment reached 106.1 billion yuan, a year-on-year increase of 223.8%. Among this, intelligent electric vehicle revenue accounted for 103.3 billion yuan, and revenue from other related businesses was 2.8 billion yuan. This means that the intelligent electric vehicle and AI innovation business has captured 23.2% of Xiaomi’s total annual revenue, a significant increase from 9.0% in 2024, becoming the group’s second growth curve.

In the fourth quarter, Xiaomi’s revenue from intelligent electric vehicles and AI innovation business reached 37.2 billion yuan, a year-on-year increase of 123.4%; operating profit was 1.1 billion yuan, marking the first quarterly profitability. The 1.1 billion yuan profit in the fourth quarter also enabled Xiaomi to achieve its first annual turnaround in the intelligent electric vehicle and AI innovation business, with an operating profit of 900 million yuan, officially ending the loss period.

In addition to the already stable profitability of Ideal, 2025 is a year when leading new forces have concentrated on achieving profitability. Both Xiaomi Auto and Leap Motor achieved full-year profitability last year, while Xpeng and NIO also reached quarterly profitability in the last quarter of last year. Among these four companies, Xiaomi’s automotive business is the fastest to achieve profitability, achieving a latecomer advantage.

Moreover, the revenue and profit data of Xiaomi’s intelligent electric vehicles and AI innovation business are second only to Ideal. In comparison, Ideal’s revenue for 2025 is 112.3 billion yuan, with a net profit of 1.139 billion yuan; Leap Motor’s revenue is 64.7 billion yuan, with a net profit of 540 million yuan. Xpeng’s revenue is 76.7 billion yuan, with a net loss of 1.14 billion yuan; NIO’s revenue is 87.5 billion yuan, with a net loss of 14.94 billion yuan.

In terms of gross margin, Xiaomi’s intelligent electric vehicles and AI innovation business has a comprehensive gross margin of 24.3%, up 5.8 percentage points from 18.5% in 2024, significantly higher than the industry level. In comparison, in 2025, Xpeng’s comprehensive gross margin is 18.9%, Ideal’s is 18.7%, Leap Motor’s is 14.5%, and NIO’s is 13.6%. Geely and Chery also released their financial reports for 2025, with corresponding comprehensive gross margins of 16.6% and 13.8% respectively. Among the entire Chinese automotive industry, the only company that can match Xiaomi’s gross margin is Seres, which achieved a gross margin of 29.38% in the first three quarters of 2025, with its annual financial report data yet to be released.

In terms of internal gross margins for two major businesses, the comprehensive gross margin for mobile phones × AIoT in 2025 is 21.7%, a year-on-year increase of 0.5 percentage points, which is 2.6 percentage points lower than the comprehensive gross margin of intelligent electric vehicles and AI innovation business. This indicates that Xiaomi’s automotive business is more profitable than its mobile phone business.

Regarding the record high financial data for the automotive business, Xiaomi explained that this is mainly due to the increase in vehicle delivery volume, the release of scale effects, and the increase in ASP (average selling price per vehicle). In 2025, Xiaomi launched a new model, YU7, which, like SU7, sold out upon launch. With the synergy of these two models, Xiaomi’s vehicle deliveries in 2025 reached 411,082 units, a year-on-year increase of 200.4%, exceeding the annual sales target of 300,000 units, and directly surpassing Ideal and NIO, becoming the top three sales among new forces last year. Additionally, thanks to the higher ASP of the SU7 Ultra and YU7 series deliveries, Xiaomi’s ASP in 2025 reached 251,200 yuan, an increase of 7.1% from 234,500 yuan in 2024.

Based on a simple calculation of financial data, Xiaomi earned approximately 61,100 yuan per vehicle in gross profit in 2025, while the net profit per vehicle was 2,190 yuan.

This year, Xiaomi will welcome a more intensive product launch, launching a more aggressive assault on the new energy market. Just last week, Xiaomi released the new generation SU7, which has improvements in smart driving and range, while the price has increased by about 4,000 yuan. According to Xiaomi’s data, the new generation SU7 achieved over 15,000 units locked in 34 minutes after sales began; within three days, locked orders surpassed 30,000 units. Xiaomi Group CFO Lin Shih-wei stated in a conference call after the financial report that the order locking speed for the new generation SU7 is higher than that of the previous generation, with a higher penetration rate among iPhone users.

According to previous media reports, in July, Xiaomi will launch the YU9 (codename Kunlun N3); in September, it will launch the YU5 (codename Kunlun N1); in October, it will launch the YU8 (codename Kunlun N2) and SU7L. Among these, YU5 and YU9 are extended-range models. Several Xiaomi Auto executives have previously shared spy photos of the new models during winter testing, starting the product hype. With the dense release of new products, Xiaomi is targeting a sales goal of 550,000 units this year. If these models can achieve significant success, then the only limitation for Xiaomi is likely to be production capacity.

“We expect growth in the automotive business in 2026 compared to 2025. Of course, there may be a bit of pressure in the overall market this year, but we are still full of confidence in YU7, the new SU7, and so on,” said Lin Shih-wei regarding the market competition Xiaomi Auto will face in 2026.

Additionally, in terms of R&D investment, Xiaomi Group’s R&D expenditure for 2025 is 33.1 billion yuan, a year-on-year increase of 37.8%, mainly due to the increase in R&D spending related to intelligent electric vehicles and AI innovation business, as well as increased salaries for R&D personnel related to mobile phones × AIoT. At the recent China Development High-Level Forum 2026, Xiaomi Group Chairman Lei Jun stated that over the next five years, the company plans to invest more than 200 billion yuan in R&D, focusing on technology fields such as chips, automobiles, and AI.

However, from the capital market’s perspective, Xiaomi has not received market recognition recently. Since late September last year, Xiaomi’s stock price has continued to decline, falling from a peak of 59.9 yuan to the current 32.68 yuan, a drop of 45.5%, nearing a halving. Particularly after the release of the new generation SU7, Xiaomi’s stock price did not see the expected sharp increase, but instead fell sharply for two consecutive days, which was surprising. The outside world believes this may reflect capital concerns about Xiaomi Auto’s future market performance, as brands represented by Huawei’s Shangjie, Zhijie, and Qijing have launched targeted models, which may put pressure on the market performance of Xiaomi’s SU7.