Xiaomi electric-vehicle (EV) and new initiatives segment has posted a profit for the first time. According to multiple reports, the company’s innovative business segment (largely EV + AI) achieved its first-ever quarterly profit in the quarter ended September 2025
Key figures & highlights
- The division (EV + AI + new initiatives) posted a profit of RMB 700 million (≈ US $98.4 million) in the quarter ended 30 September.
- EV business revenue accounted for about RMB 28.3 billion (~US$3.98 billion) of the innovative business’s revenue, making up ~97.6% of that segment’s revenue.
- Revenue for the innovative segment reached a record high of RMB 29 billion in Q3.
- The segment’s growth has been rapid: for example, year-on-year EV revenue surged ~197.9% and quarter-on-quarter ~37.4% for that portion.
Why this matters
1. Turning profitable in an EV business is hard
Making money in EVs is notoriously difficult due to high capital expenditure, supply-chain costs, and competitive pricing. With Xiaomi reaching profitability so quickly, it marks a rare achievement among EV makers.
2. Strong execution by a tech company entering auto
Xiaomi is primarily known as a smartphone/consumer-electronics firm, not as a legacy automaker. That it has been able to ramp EV production/delivery and then convert to profit shows significant execution.
3. Implications for the competitive EV market
This milestone could pressure other EV manufacturers (especially newer or smaller ones) and may accelerate consolidation, cost-efficiency drives and differentiation in the market.
4. Strategic shift for Xiaomi
For Xiaomi, this profitability strengthens its diversification strategy into EVs, AI and “new initiatives”. It validates the large investment and signals that the EV business may become a meaningful contributor to the group’s profitability.
How Xiaomi achieved it: Key drivers
- Strong sales/volume growth: The EV business has gained traction quickly. Xiaomi’s EV models have gathered large pre-orders/deliveries in a short period.
- Scale & cost advantages: Leveraging its consumer-electronics manufacturing and supply-chain may have helped Xiaomi keep costs under better control compared to some pure EV startups.
- Focus on a single region/market (China): By focusing initial efforts in China, Xiaomi may have avoided the complexity and costs of global rollout early on, improving turnaround.
- New initiatives segment: The profit is tied to a broader “innovative businesses” segment (EV + AI + new tech) rather than EV alone; this helps contextualise the profitability
Challenges & what to watch
- Margins & sustainability: While profitability is a milestone, maintaining and scaling it will require margins to hold up, especially in the face of competitive pricing.
- Global expansion: Currently the focus is China. Expansion abroad will come with higher costs and regulatory challenges.
- Model mix & product pipeline: Future model launches, especially SUVs or lower-cost variants, will test whether profitability can scale.
- Supply-chain / cost inflation risks: Raw material, battery costs and logistics remain volatile.
- Competition: Many firms are competing aggressively in EVs, which can squeeze pricing and margins.
Final thoughts
The achievement that the Xiaomi EV business turns profitable is a major inflection point—not just for Xiaomi, but for the EV sector. It signals that under the right conditions (scale, cost control, strong product uptake) an EV startup (or non-traditional automaker) can make a profit faster than most expected. For stakeholders in tech, auto, and investment, this development is one to watch.
