Xiaomi: Premium Smartphones Shine as EV Ambitions Burn Through Billions

Xiaomi's Q1 revenue beat expectations but net profit plunged 43% as EV losses surged six-fold to 3.1B RMB. New 17T series phones aim to revive smartphone momentum while stock hits fresh low.

The electronics giant is fighting a war on two fronts — and the casualties are mounting in its financial statements. While Xiaomi pushes deeper into premium smartphones with the flagship 17T Pro, its electric vehicle venture continues to haemorrhage cash at an alarming rate. Shares hit a fresh 52-week low of €3.07 on Friday, sliding 2.88% in a single session, bringing year-to-date losses to nearly one-third of the stock's value.

The tension between product strength and profit destruction shows sharply in the first-quarter numbers. Group revenue came in at 99.14 billion RMB, slightly ahead of expectations, but adjusted net profit plummeted 43.1% to just 6.1 billion RMB. The culprit is the auto division, where the operating loss ballooned six-fold year-on-year to 3.1 billion RMB. On a per-vehicle basis, Xiaomi now loses roughly $5,600 on each car sold — a staggering leap from $900 a year ago.

Smartphones Hold the Line

While the EV business burns money, the core smartphone operation remains resilient. Xiaomi shipped 33.8 million handsets in the first quarter, marking its 23rd consecutive quarter among the global top three. The Smartphone × AIoT segment generated 79.3 billion RMB in revenue, with handsets alone contributing 44.3 billion RMB. Global market share stood at 11.3%, while in Europe it reached 17.2%.

To defend that position, Xiaomi has just launched its 17T Series globally, with sales starting in Hong Kong and rolling out across Europe. The lineup features two models: the 17T and the 17T Pro. Both carry a Leica Summilux 5x telephoto lens, 1.5K AMOLED displays with TÜV Rheinland eye comfort certification, and the latest MediaTek chips. The Pro model stands out with a 7,000 mAh silicon-carbon battery — a rare capacity even in the premium tier. European pricing starts at €749 for the base 17T, climbing to €1,099 for the 1TB 17T Pro. The company hopes the Leica branding and aggressive specs can inject fresh momentum into its smartphone segment.

Buyback Fails to Soothe Street

Parallel to the product offensive, management has been buying back stock aggressively. Since the mandate was approved in June 2025, Xiaomi has cancelled roughly 410 million shares, representing 1.58% of its share capital. Despite that, analysts remain cautious. China Galaxy International slashed its price target from 44.70 HKD to 36.70 HKD, citing reduced earnings forecasts for 2026 through 2028.

Research and development spending has surged 33.4% to 9 billion RMB, with 26,048 employees now working in R&D. The company maintains a comfortable liquidity position with cash reserves of 220.6 billion RMB, but that war chest is being consumed at an accelerating pace by the EV ramp-up.

The EV Bet Comes Down to Scale

Deliveries in the first quarter reached nearly 81,000 vehicles, up about 7% year-on-year. The SUV YU7 accounted for the vast majority — over 71,000 units. New models are entering the pipeline: the YU7 GT launched at around 390,000 RMB, followed by a cheaper standard edition at about 234,000 RMB. More than 80,000 pre-orders have already been placed for the upcoming SU7 generation.

Xiaomi has set a delivery target of 550,000 vehicles for 2026. If production scales as planned, fixed costs could spread more thinly and per-car losses should narrow. Until then, the stock is likely to remain under pressure as investors weigh the glossy appeal of premium smartphones and share buybacks against the brutal arithmetic of a car business that is losing thousands of dollars on every unit it sells.