Chinese reports suggest the brand may release its second model within the next two months
Developing, manufacturing, and selling electric vehicles is a costly endeavor, and Chinese tech giant Xiaomi learned this the hard way, losing millions with the launch of its SU7 sports sedan. Despite the setbacks, Xiaomi is outperforming some more established brands on a per-vehicle basis.
Xiaomi’s automotive division reported an adjusted loss of $252 million for the second quarter ending June 30, marking its first full delivery quarter. In April, May, and June, Xiaomi delivered 27,307 EVs to customers in China and is confident it will surpass 100,000 deliveries by November. Based on its total losses and deliveries, Xiaomi incurred a loss of $9,200 for every car sold.
Xiaomi’s automotive division may not be profitable yet, but such losses are not uncommon in the industry. In early August, it was reported that Rivian lost $1.46 billion in the second quarter, producing only 9,162 vehicles and losing $32,705 per vehicle delivered. Ford’s situation is even more challenging. In the second quarter, its Model e electric car division posted a $1.1 billion loss, selling 23,957 vehicles, which translates to a loss of $47,600 per EV sold.
Citibank analysts estimate that Xiaomi’s automotive division could break even if annual sales reach between 300,000 and 400,000 vehicles.
Interestingly, Lei Jun has no immediate plans to sell Xiaomi’s current or future EVs outside of China. In an April interview with CNBC, Lei stated that the company will concentrate solely on the Chinese market for the next three years before expanding globally.
A second model could accelerate Xiaomi’s path to profitability. This upcoming vehicle, expected to be a larger SUV than the SU7, might debut by the end of this year, with customer deliveries starting in early 2025. With the growing demand for SUVs and crossovers, it could surpass the popularity of the SU7 sedan.
