Xiaomi Group recently sparked discussions over the topic of “Xiaomi loses over 60,000 for every car sold” after releasing its latest financial report.
On August 21st, Xiaomi Group’s latest financial report showed that the company achieved a 29.6% year-on-year increase in revenue in the first half of 2024, with an adjusted net profit growth of 51.3%.
The financial report divided the business into “Smartphone XAIoT” and “Innovative Business such as Smart Electric Vehicles.” The revenue for “Smartphone XAIoT” was 82.5 billion yuan, a 22.5% annual increase, with a gross profit margin of 21.1%. The revenue from electric vehicles and other innovative businesses was 6.4 billion yuan. In the second quarter, 27,307 smart electric vehicles were delivered, generating an income of 6.2 billion yuan. The gross profit margin for the “Innovative Business such as Smart Electric Vehicles” was 15.4%, resulting in a net loss of 1.8 billion yuan.
According to reports, based on this calculation, Xiaomi’s automotive division loses over 60,000 for every car sold, which led to heated discussions regarding “Xiaomi loses over 60,000 for every car sold.”
A screenshot circulating online showed that Xu Jiye, the public relations head of Xiaoyue Motors, posted on his social media saying, “Xiaomi cars lose over 60,000 for every unit sold. Why continue to sell them? In the past, this would have been considered dumping.”
On the morning of August 22nd, the news of “Xu Jiye, the Public Relations Head of Xiaoyue, criticizing Xiaomi’s car sales losses” drew market attention.
Red Star News reached out to Xu Jiye for confirmation, to which he responded, “What I post on social media is mainly aimed at friends sharing personal viewpoints, limited to the circle of friends. I can neither confirm nor deny specific claims.”
During the live broadcast event “Lei Jun’s Copilot” in the Pearl River Delta on August 22nd, Lei Jun personally drove the Xiaomi SU7.
When discussing the issue of “Xiaomi SU7 loses over 60,000 for every car sold,” Lei Jun mentioned that “Xiaomi’s automotive sector is still in the investment phase, and we hope for understanding.”
As for the 1.8 billion yuan adjusted net losses, Xiaomi Group’s CEO Lu Weibing attributed it to the small scale of Xiaomi’s automotive division. He also pointed out that the first car model is a pure electric sedan, which incurs high battery costs, and it will take time to absorb these costs.
In April of this year, Citigroup released a research report forecasting that Xiaomi will incur an average loss of 6,800 yuan for every SU7 car sold, with a projected total loss of up to 4.1 billion yuan in the entire car manufacturing business. This data highlights the financial strain Xiaomi faces when entering the automotive market.
Start PowerOn, a media outlet under 36Kr, previously revealed that Xiaomi’s automotive sector has prepared for losses exceeding five years into the future.