With only two electric cars, Xiaomi is getting out of the “Valley of Death.” Others cost more than a decade

The Xiaomi Su7 has surprised the entire industry And he has led the company to do such rare things as telling its customers in a hurry that buy cars from competition. The play hides a strategy, but it is a great example of how good it goes to the company with its second car and bets on luxury, The Yu7. While they hope to make the leap to Europe in 2027, he has achieved kneel. Lost 800 million In his first year he sold cars. Great news that already pointed to what was coming later: the Break Even

When losing $ 500 per car sold is good news. Xiaomi has presented the Financial Results of the Second Fiscal Quarterwith great news for your car section. The Auto Division has commercialized 81,302 vehicles in the period and lost 41 million dollars. It is a loss of $ 507 for each car sold. It is very good news for the speed at which the company is approaching profitability.

The photo. In the last quarters, Xiaomi comes from losing, on average, 1,376, 905 and 507 dollars respectively, after coming from losses of 5,250 in the third quarter of 2024. That is, it now loses a tenth of what I lost until November. And it is not the only positive figure that the results bring along with sales growth: the gross margin has grown from 15.4% of the second quarter of 2024 to 26.4% of this year. This contributes to having launched the Su7 ultrawhose launch has helped the average sale price up 10% in one year. With him they wanted to eat Porsche in his field, And they got it.

According to its financial results, Xiaomi is very close to starting to earn money with its car section.

Why it is important. Tesla is the only pure manufacturers of electric cars that He has managed to get out of the “Death Valley” the initial period in which Startups They burn money to espuertas without hardly generating money. Brands such as Rivian, Lucid, or Ford (in their electric division) have accumulated losses exceeding 22,200, 11,000 and 10,500 million dollars respectively. That Xiaomi only loses 41 million dollars per quarter with such competitive prices speaks of the balance that has its commitment just over a year after having launched.

How are they getting it. Not all companies have The support that Xiaomi has had In his car crossing. In this sense, according to Bill Russo, CEO and founder of Automobility, a determining factor of Xiaomi’s success has to do with its production agility, which has benefited widely from producing with Beijing Auto, a state company that already had a huge production scale before the arrival of Xiaomi.

The company was able to access a production chain already components of high quality already available in the market thanks to investments made by the matrix and its founder for years in companies such as companies such as Momenta. Another of the keys, according to John Helveston, a professor specialized in the Chinese electric vehicles industry: it is an achievement to manufacture an electric in such a short time, but attention must be paid to evolution. “The car industry is hard and success is measured in years of resistance, not in the speed of the first launch,” he told us.

Xiaomi has passed in a year of being present in 30 cities with 87 stores to be in 92 with 335 stores. Image: Xiaomi.

Xiaomi had a long way carved. Yes, even being new in the electric car sector. On the one hand, although you can buy online cars, by its already extensive distribution network In China: 335 sales centers in 92 cities, and growing at a dizzying pace. It is no longer the company we met for selling extremely cheap technology. Although it maintains a part of that bet, in recent years too He has focused on the premium with the support of luxury brands such as Leica. It is much more path of of some brands when arriving in Spain.

The challenge. Among such good news, Xiaomi faces a problem: long waiting times and limited calendar. This explains that in China, the Su7 be the king of resalecosting more than new and with up to 10 months of waiting. To a limited production they also faced for years fAbricante as Teslaand Xiaomi has the best example of how to grow. In 2024 he achieved sell 4 million vehicles (In front of the 350,000 that Xiaomi hopes to sell this year).

Xiaomi has a plan factor growth for his future cars and be able to face international expansion. It will be a crucial moment, for example companies like Novo Nordisk knows well: the problems for Ozempic in the United States began When they could not deal with demand.

Cover image | Xiaomi

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