Xiaomi's electric vehicle (EV) division has achieved a major milestone by producing its 500,000th car, and concurrently raised its full-year 2025 delivery target to over 400,000 units, up from the previous goal of 350,000 units. This announcement was made during the company's third-quarter earnings call, with founder and CEO Lei Jun sharing the update on social media.
The EV and AI division reported a profit of 700 million yuan (approximately $98 million) in the latest quarter, achieving profitability just 19 months after launching the SU7 electric sedan. The division's gross margin stood at 25.5%, equating to roughly 6,434 yuan profit per vehicle.
However, Xiaomi faces significant challenges, including a global shortage of memory chips that could increase costs for both EV and smartphone sectors. President Lu Weibing noted that the company has secured supply deals but may raise product prices to offset anticipated cost surges. Semiconductor Manufacturing International Corp. (SMIC) warned of a potential memory shortage impacting car and electronics manufacturing in 2026.
Additionally, China's EV purchase tax incentives are set to be reduced by half next year, potentially dampening consumer demand. Despite these headwinds, Xiaomi plans to address challenges by reducing customer wait times, improving production, and investing in R&D for advanced features like AI driver-assistance systems.
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