- Technology company and new electric car maker Xiaomi has revealed how much money it burns to make its cars.
- The tech company’s EV division lost about $252 million from April to June, or $9,200 per car.
- Xiaomi has just one car, the Speed Ultra 7, but the company has ambitious plans to expand its range of smart vehicles.
Chinese tech giant Xiaomi, known for producing smartphones, attracted attention in March when its first electric car sold out within a day of its launch, with almost 90,000 pre-orders received.
The new automaker posted an adjusted loss of $252 million for the second quarter ended June 30 — its first full quarter of deliveries ever, the company said in its annual report. unaudited results submitted on Wednesday.
That’s despite Xiaomi saying it’s on track to meet its goal of 100,000 deliveries of its first car, Speed Ultra 7by November.
The new electric vehicle The maker said it delivered 27,307 SU7s in the second quarter, meaning it lost an average of $9,200 per car. The SU7’s base price is 215,900 yuan, or about $30,000.
That’s not to say Xiaomi is losing more money as it ships more cars: the company reported a higher-than-expected gross profit margin of 15.4%.
However, there have been signs for some time that it will take time for the automotive segment to break even, with CEO Lei Jun stated in April that the car was sold at a loss, although he did not say how much of a loss he incurred.
Citibank analysts wrote in a report at the time that they expected Xiaomi to turn a profit only after they reached annual sales of 300,000 to 400,000 vehicles. They predicted sales of 260,000 cars in 2026.
Xiaomi operates one EV factory, which it built itself. Since June, the company has been running double shifts to bring monthly deliveries above 10,000 cars.
A company spokesperson told Business Insider that the company is focused on expanding the size of its EV division to lower the cost per car.
“The size of Xiaomi’s electric vehicle industry is relatively small at present, while the automotive industry is a typical industry with economies of scale,” the spokesperson said.
For comparison: rival Chinese EV manufacturer BYD 426,039 cars sold in the April-June quarter.
The Xiaomi spokesperson added: “In addition, Xiaomi’s first electric car is a fully electric sedan and the investment cost is relatively high. So it will take some time to absorb this part of the cost.”
Lei Jun, the billionaire and co-founder of Xiaomi, said in March that he planned to invest “tens of billions of dollars” in building Xiaomi’s EV division over the next few years and automotive technologies.
The tech company has long said its vision for the SU7 is to be a smart car who rivals Elon Musks Tesla, but the price is more in line with the average Chinese income.
According to Xiaomi, customers are still coming in, with an additional 13,000 vehicles sold in the second quarter and July combined.
Ambitions for the electric car range are high, including self-driving and self-parking capabilities and an audio-controlled assistant with artificial intelligence that is due for full delivery this month.
Xiaomi posted strong results overall for the second quarter, with revenue growth of 32% across all sectors to 88.7 billion yuan compared to the same period in 2023.
Net profit also amounted to 5 billion yuan, up 38% from 3.6 billion yuan in the second quarter of last year.
The company said it plans to build several other electric models alongside the SU7 sedan, but has not yet said what those will be.