Xiaomi’s electric vehicle division posted losses again in Q2
Xiaomi's business in electric vehicles, AI, and other new initiatives remained in the red in the second quarter of 2026. Despite significantly higher vehicle deliveries, the segment recorded an operating loss of 2.6 billion yuan. However, the deficit decreased compared to the first quarter.
Xiaomi’s “Smart EV, AI and Other New Initiatives” segment generated sales of 24.9 billion yuan (approximately 3.0 billion euros) in the second quarter of 2026. This represented a 17.1 percent increase compared to the previous year’s quarter and a 25.3 percent rise versus the first three months of the current year. Electric vehicle sales alone accounted for 23.9 billion yuan, marking a 15.9 percent increase from the previous year. Other business areas, including revenue from Xiaomi’s MiMo AI product line, contributed 1 billion yuan.
As in the previous quarters, Xiaomi does not report its electric vehicle business separately but combines it with AI and other new initiatives. Although pure vehicle sales still account for the largest portion of segment revenue at 23.9 billion yuan out of 24.9 billion yuan, the operating loss and gross margin cannot be directly attributed to the automotive business alone.
The business unit is not profitable in any case. The operating loss in the second quarter amounted to 2.6 billion yuan (around 315 million euros), marking the second consecutive quarter of losses for this segment. However, Xiaomi managed to reduce the loss compared to the first quarter, when the deficit was 3.1 billion yuan (around 400 million euros). Previously, the business unit had posted profits in the third and fourth quarters of 2025, thus ending the full year with an operating profit for the first time.
At the same time, the gross margin of this segment continued to come under pressure. It dropped from 26.4 percent in the second quarter of 2025 to 19.2 percent. By the first quarter of 2026, it had already fallen significantly below the previous year’s level at 20.1 percent. Xiaomi attributes this further decline to factors such as the reduced share of the high-priced SU7 Ultra in sales mix and rising prices of key components. Additional pressures came from higher costs in the AI business. Meanwhile, the operating expenses of this segment increased by 25.7 percent within a year to 7.4 billion yuan.
Deliveries rise to over 100,000 vehicles
In terms of vehicle sales, the trend continues to show upward momentum. Xiaomi delivered 104,199 electric vehicles between April and June, 28.2 percent more than in the same period last year. Compared to 80,856 vehicles sold in the first quarter, this represents a growth of nearly 29 percent. However, the average selling price dropped to 229,312 yuan (around 27,700 euros), a decrease of 9.6 percent from the previous year. Here too, the smaller share of the more expensive SU7 Ultra is having an impact.
The SU7 remains a key pillar of the still young automotive business. As of August 17, Xiaomi has delivered over 500,000 units of this series, according to the company. In the first half of 2026, the SU7 was also the best-selling all-electric sedan priced at over 200,000 yuan in the Chinese market.
Meanwhile, Xiaomi continues to invest heavily in expanding its business. Of the group’s total investment expenditure of 3.6 billion yuan, 2.4 billion yuan was allocated to the electric vehicles, AI, and other new initiatives segment in the second quarter. The group’s overall research and development spending also increased by 18.9% to 9.2 billion yuan.
Xiaomi has set a goal of delivering 550,000 vehicles for the full year. According to CnEVPost, 216,322 units were delivered from January to July. In July, deliveries dropped by about 10% compared to June, reaching 31,267 vehicles. To still meet the annual target, Xiaomi would need to deliver an average of around 66,700 vehicles per month in the remaining five months. This is significantly higher than the most recent monthly delivery level.