Xiaomi electric vehicle company reports first-quarter profit, targets 350,000 units by 2026.
Xiaomi EV reported a profit of 700 million yuan in the third quarter, reversing the previous quarter; the company aims to deliver 350,000 vehicles by 2026 and plans to launch sales in Europe from 2027.
Xiaomi's electric vehicle division posted a first-quarter profit of 700 million yuan ($98 million) in the third quarter, reversing a 300 million yuan loss from the previous quarter and contributing to a doubling of the group's overall net profit. This is a significant milestone for the smartphone maker's automotive ambitions in the highly competitive Chinese market. (According to Bloomberg.)
Profit milestones and execution messages
The profitable results place Xiaomi among the group of Chinese electric vehicle manufacturers that have reached break-even. While it's still early days, this confirms the direction of co-founder Lei Jun, who predicted the automotive segment would become profitable this year. Xiaomi's first SUV model has received positive feedback and a large number of orders, providing momentum for initial sales.
Vehicle delivery capacity and expansion plans
On November 18th, executives announced that Xiaomi will reach its goal of delivering 350,000 electric vehicles by 2026 this week, a month ahead of schedule. The company is ramping up production to shorten lead times; currently, some models still have lead times of up to nine months due to demand exceeding supply capacity. In October, Xiaomi delivered over 40,000 electric vehicles, the same number as the previous month.
In the international market, Xiaomi aims to start selling electric vehicles in Europe from 2027. In China, the company aims to compete directly with Tesla and BYD before expanding overseas.
The risk landscape: competition, supply chains, and smartphones.
Some investors questioned the long-term outlook, citing fierce competition, safety concerns, and factory delays. In the core smartphone segment, the race with Apple is also creating pressure: Xiaomi launched a $630 iPhone 17 replacement in September to gain market share in the high-end segment in China, but according to Counterpoint Research, iPhones accounted for about a quarter of smartphone sales in China last month, while Xiaomi's growth rate was slower than Oppo's.
The supply chain is also an unpredictable variable. On November 11th, Xiaomi stated that it expects a shortage of memory chips to drive up mobile device prices next year; many other companies have also warned of the risk of shortages of this crucial component by 2026.
Impact on stocks
The aforementioned factors have contributed to the negative performance of Chinese technology stocks in just the past few months. Xiaomi shares have fallen by approximately 20% since May.
Key milestones and figures
| Target | Value |
|---|---|
| Electric vehicle segment profits in Q3 | 700 million yuan (98 million USD) |
| Previous quarter results | A loss of 300 million yuan. |
| Vehicle delivery in October | Over 40,000 vehicles |
| Target delivery year: 2026 | 350,000 vehicles |
| Sales plan in Europe | From 2027 |
| Stock price fluctuations since May | A discount of about 20% |
Brief summary
Third-quarter profits indicate that Xiaomi's electric vehicle segment is on the right track in terms of scale and cost. However, the ability to expand production, reduce lead times, manage supply chain risks, and maintain competitiveness in the domestic market will determine the sustainable pace of growth in the coming quarters.
