Chinese electric vehicle maker Xiaomi reveals it lost $9,200 on every car it shipped

That’s despite Xiaomi saying it’s on track to surpass its target of 100,000 shipments of its first machine, the Speed ​​Ultra 7, by November.

The new electric vehicle maker said it shipped 27,307 SU7s in the second quarter, meaning it lost an average of $9,200 per car. The base price of the SU7 is 215,900 yuan, or about $30,000.

That doesn’t mean Xiaomi is losing more money when it ships more cars: the firm reported a higher-than-anticipated gross profit margin of 15.4 percent.

However, there have been signals for a while that its auto segment will last until it breaks even, with CEO Lei Jun noting in April that the car is selling at a loss, though he did not say by how much.

Citibank analysts wrote in a report at the time that they expected Xiaomi to turn a profit only after reaching annual sales of 300,000 to 400,000 vehicles. They estimate sales of 260,000 cars in 2026.

Xiaomi operates an electric vehicle factory, which it built itself. Since June, it has been running double-shift operations to push monthly deliveries above 10,000 cars.

A company spokesperson told Business Insider that the firm is focusing on increasing the size of its EV arm to reduce costs per car.

“The scale of the Xiaomi EV business is relatively small at the moment, while the automotive industry is a typical industry with economies of scale,” the spokesperson said.

By comparison, rival Chinese electric vehicle maker BYD sold 426,039 cars in the April-June quarter.

The Xiaomi spokesperson added: “In addition, Xiaomi’s first EV is a pure electric sedan, and its investment cost is relatively high, so it will take some time to digest this part of the cost.”

Lei Jun, Xiaomi’s billionaire co-founder, said in March that he plans to invest “tens of billions” over the next few years in building Xiaomi’s EV and automotive technology division.

The tech firm has long said its vision for the SU7 is to create a smart car that rivals Elon Musk’s Tesla but is priced more in line with the average Chinese income.

Xiaomi said customers are still coming in, with another 13,000 vehicles sold in the second quarter and July combined.

Its ambitions for its range of electric vehicles, including self-driving and self-parking capabilities and an audio-based artificial intelligence assistant, will be delivered in full this month.

Overall, Xiaomi posted strong results for the second quarter, with sales across all its sectors rising 32% to 88.7 billion yuan compared to the same period in 2023.

Net income also reached 5 billion yuan, up 38 percent from 3.6 billion yuan in the second quarter of last year.

The company said it plans to build a variety of EV models beyond the SU7 sedan, but didn’t say what those would be.