Xiaomi unexpectedly showed how expensive its automotive expansion is. According to the financial report for the first quarter of 2026, the company lost about $5,600 on each car sold. During the quarter, Xiaomi delivered 80,856 vehicles, and the Smart EV and AI Innovation division incurred an operating loss of 3.1 billion yuan (approximately 35 billion rubles). At the same time, the automotive sector's revenue grew to 19.9 billion yuan (approximately 220 billion rubles).
The paradox is that sales continue to grow. The main driver was the new YU7 crossover, and the updated SU7 has already accumulated over 80,000 confirmed orders after the March restyling. Xiaomi is also actively expanding its sales network: by the end of March, the company had opened 490 showrooms in 143 cities across China.
But profitability has sharply deteriorated. A year ago, Xiaomi was losing about $900 per car; now, it's more than six times that. The EV segment's gross margin decreased from 23.2% to 20.1%. The company attributes this to subsidies, high component costs, and a decrease in the share of expensive SU7 Ultra versions.
Interestingly, Xiaomi's strategy itself looks familiar to the technology market. The company historically earned not from high markups, but from scaling its ecosystem — smartphones, services, and IoT devices. Now this approach is being transferred to the automotive industry: Xiaomi is clearly ready to sacrifice profit for rapid market capture.
For the industry, this is an alarming signal. The Chinese EV war is becoming increasingly fierce, and new players are willing to operate at a loss for years to gain market share. Analysts are already warning that many startups may not survive the next few years without consolidation or massive growth.
At the same time, Xiaomi remains an extremely dangerous competitor. The company already knows how to build global digital ecosystems, quickly reduce costs, and aggressively scale production. This means that current losses may not be a sign of weakness, but an investment in a future price war.
Earlier, motoram.ru reported that the new Xiaomi broke a record at the Nürburgring.