Xiaomi's EV Breakout: A High-Growth Play in China's Electric Vehicle Revolution

Xiaomi’s electric vehicle (EV) division is surging into the spotlight, driven by explosive sales, aggressive production expansion, and a clear path to profitability. In Q2 2025, the company delivered 81,000 EVs, a 197.7% year-on-year increase, with cumulative deliveries surpassing 300,000 units by July 2025 [2]. This momentum is underpinned by the SU7 sedan and YU7 SUV, which have captured market attention: the SU7 became the best-selling large sedan in China’s E-Car segment in January 2025 [3], while the YU7 generated nearly 300,000 orders within an hour of its launch [5].

The company’s production scalability is equally compelling. Xiaomi has already activated a second factory in Beijing, matching the 150,000-annual-unit capacity of its first plant [2]. A third facility, built on a 485,000-square-meter site acquired for $88.5 million, is under construction and will push total annual capacity to nearly 500,000 vehicles by 2026 [1]. This expansion aligns with Xiaomi’s revised 2025 delivery target of 350,000 vehicles, a 17% increase from its prior goal [6]. The phased approach—Phase 2 of the Beijing plant expected to complete by mid-2025—ensures the company can meet surging demand without overextending its balance sheet [4].

Revenue potential is the final pillar of Xiaomi’s EV strategy. The smart EV division generated 20.6 billion yuan in Q2 2025, contributing significantly to the company’s record $16 billion revenue for the quarter [2]. Crucially, segment losses narrowed in Q1 2025, and Xiaomi aims for the EV business to turn a profit in H2 2025 [5]. With the SU7 and YU7 priced to compete with Tesla’s Model 3 and BYD’s Han EV, Xiaomi is leveraging its brand equity and ecosystem integration to capture premium margins.

While competition intensifies, Xiaomi’s vertical integration and software-driven value proposition position it to outperform rivals. The company’s entry into Europe by 2027 [5] further signals its ambition to replicate its smartphone success in the global EV market. For investors, the combination of rapid production scaling, strong unit economics, and a clear path to profitability makes Xiaomi’s EV division a high-conviction growth story.

Source:
[1] Xiaomi's third car factory is coming! [https://licarco.com/news/xiaomi-s-third-car-factory-is-coming]
[2] Xiaomi logs 20.6 billion yuan in Q2 2025 smart EV revenue [https://autonews.gasgoo.com/m/70038689.html]
[3] China's Xiaomi YU7 launch shakes up EV landscape [https://www.spglobal.com/automotive-insights/en/blogs/2025/07/chinas-xiaomi-yu7-launch-shakes-up-ev-landscape]
[4] Xiaomi EV plant phase 2 expected to be completed by mid- ... [https://cnevpost.com/2025/05/20/xiaomi-ev-plant-phase-2-completed-jun/]
[5] Xiaomi EV-powered rally faces earnings test [https://www.tradu.com/en/insights/shares/xiaomi-ev-powered-rally-faces-earnings-test/]