Xiaomi’s EV Division Burns $5,600 Per Car as Delivery Gap Widens

Xiaomi's EV unit lost $424M in Q1, deliveries miss target, stock at 52-week low. Goldman sees 50% profit drop. Company bets on vertical integration and new models.

Xiaomi’s ambitious push into electric vehicles is bleeding cash at an alarming rate, with its EV unit posting an operating loss of 3.1 billion yuan ($424 million) in the first quarter—equivalent to roughly $5,600 for every vehicle handed over. The company’s stock has slumped to a new 52-week low of €2.76, and despite a HK$102 million buyback on Tuesday that scooped up 4 million shares, the equity closed at €2.81, barely above that floor. Year-to-date, the shares have shed 37% and are trading 33% below their 200-day moving average.

The core problem lies in Xiaomi’s inability to accelerate deliveries fast enough. Management set a 2026 target of 550,000 EVs, but in the first five months only 147,600 units were shipped—just 27% of the goal. To hit the annual figure, the company must average roughly 57,500 deliveries per month from June through December, yet its all-time monthly record stands at 50,000, set in December 2025. May’s tally exceeded 30,000 vehicles, though Xiaomi has not released precise numbers.

Financial strain is intensifying. The EV division’s gross margin shrank to 20.1% from 23.2% a year earlier, driven by lower government purchase-tax subsidies, a smaller mix of the high-margin SU7 Ultra, and rising component prices. That reversal came after the business eked out its first operating profit in the full year 2025. Goldman Sachs now forecasts just 1% revenue growth in the second quarter and a 50% plunge in adjusted net profit to 5.4 billion renminbi. Investors will get a clearer picture when Xiaomi reports Q2 results, expected on August 26.

To stem the losses, management is doubling down on vertical integration. Vice President Song Gang recently warned that profit margins across the EV industry are razor-thin and that survival hinges on supply-chain efficiency. Xiaomi is developing its own chips and artificial-intelligence capabilities to slash production costs, hoping to hold its own against premium automakers in a brutal price war.

New models are also being rushed into the breach. On May 21, the company launched the YU7 Standard Edition and YU7 GT; the former starts at 233,500 yuan and offers a range of 643 kilometres. Early buyers who order before June 30 receive a five-year low-interest loan and free access to the HAD autonomous-driving system. Meanwhile, a new electric vehicle with a range-extender (a combustion engine acting as a generator) is nearing regulatory approval. In the smartphone arena—where Xiaomi boasts 746 million active users—the new Redmi Turbo 5, featuring a silicon-carbon battery capable of two days of use, aims to boost monetization.

Technically, the stock’s relative strength index sits at 29, territory considered deeply oversold. Goldman’s earnings warning has already been priced in to some degree, but the critical support level at €2.79 is under threat. If it cracks, further selling pressure could follow. The buyback and product launches show a company fighting on multiple fronts, yet the arithmetic of 550,000 deliveries and a 50% profit drop suggests the road ahead remains steep.