The archive · Hardware & Devices · Strategic decision · 2024–2026
Xiaomi Auto bets scale beats skepticism: 410k deliveries, first profit, 550k goal
China doubted a phone maker could sell ¥200,000+ cars; Xiaomi Auto delivered 411,082 EVs in 2025, hit ¥106.1B revenue and set a 550,000-unit 2026 target
Xiaomi
What the business is
Xiaomi Auto is the electric-vehicle arm of the phone and smart-device maker, launched with the SU7 performance sedan in 2024 and expanded with the YU7 large SUV and SU7 Ultra in 2025; it sells in China with plans for extended-range SUVs and a seven-seat flagship, integrating cars with Xiaomi's phone and smart-home ecosystem.
Starting capital：Xiaomi funded the car business from group cash flow rather than external rounds: 2025 R&D spending was ¥33.1B, with ¥105.5B invested over the previous five years (BitAuto), and Lei Jun committed at least ¥200B to R&D over the next five years, concentrated on batteries, electric drives, intelligent driving and generative AI (36Kr).
How it started
Xiaomi Auto entered the market in 2024 with the SU7 sedan, a late and heavily doubted move: observers questioned whether a phone brand could sell premium cars in China's crowded EV market. The company answered with product-first positioning and scaled manufacturing, and by early 2025 was delivering tens of thousands of cars a month while Lei Jun publicly set the year's goal at 300,000 vehicles.
What happened
Demand ran ahead of plan through 2025. Xiaomi raised the delivery target from 300,000 to 350,000 mid-year, then finished at 411,082 vehicles, up 200.4% year on year. The YU7 large SUV, on sale about half a year, passed 150,000 deliveries and became China's top-selling large SUV for seven straight months; the SU7 was the best-selling sedan above ¥200,000 for the year, and the SU7 Ultra hit its 10,000-delivery goal in under six months. Q3 2025 marked the business's first profitable quarter.
How it ended up
In Xiaomi's 2025 annual report, released 2026-03-24, smart EV and AI innovation revenue reached ¥106.1B, up 223.8%, and the group called the car business its second growth engine, with auto revenue 23.2% of the total. On the new-year broadcast in January, Lei Jun set a 550,000-delivery target for 2026 — 140,000 more than 2025 — backed by four new models including two extended-range SUVs and a ¥200B five-year R&D commitment.
Background
Xiaomi Auto launched its first car, the SU7 performance sedan, in 2024, entering China's EV market as a phone maker with everything to prove. Lei Jun's bet was that Xiaomi's brand, ecosystem and supply-chain discipline could out-execute dedicated EV startups at scale, and he set deliberately public delivery targets to measure it.
The scale-up exceeded every target: Xiaomi delivered 411,082 vehicles in 2025, up 200.4% year on year, after raising its goal from 300,000 to 350,000 mid-year. The SU7 became China's best-selling sedan above ¥200,000, the YU7 large SUV passed 150,000 deliveries in about six months and led its segment for seven consecutive months, and the SU7 Ultra reached 10,000 deliveries in under half a year.
The 2025 annual report, released 2026-03-24, showed the payoff: smart EV and AI innovation revenue of ¥106.1B, up 223.8% and worth 23.2% of group revenue, with Q3 2025 the first profitable single quarter for the auto business. Lei Jun answered with a 550,000-unit 2026 target, four new models including extended-range SUVs, and a ¥200B five-year R&D plan, framing the car as Xiaomi's 'third growth curve' after phones and smart home.
What has to be true
- Xiaomi's phone and AIoT installed base gave the car brand instant trust and a human-car-home ecosystem rivals could not copy quickly
- Over-delivering against loudly announced targets turned skepticism into credibility, and each raise of the goal became free marketing
- Vertical experience in hardware pricing and supply chains let Xiaomi scale production faster than new EV entrants of the previous decade
- Premium pricing on the SU7 and YU7, rather than a low-price race, protected margin while the volume ramp built the brand
What can be applied
When everyone claims product superiority, prove credibility with delivery curves: Xiaomi over-delivered against publicly raised targets and turned a doubted entry into China's fastest EV scale-up
Aftermath
As of the March 2026 annual report, Xiaomi's car business is its second growth engine: ¥106.1B in smart EV and AI innovation revenue, 23.2% of group total, framed as the third curve after phones and AIoT. Lei Jun has set a 550,000-delivery 2026 target backed by four new models, including two extended-range SUVs for the large-SUV market, and committed ¥200B to R&D over five years, ¥60B of it in AI over three; capacity from two factories plus a third won in June 2025 is expected to cover the volume.
Sources
- Xiaomi Auto Sells 410,000 Units, Achieves First Profit at Year-End. Lei Jun Aims for 550,000 Units, Four New Models to Target Extended-Range Market
- Xiaomi 2025 Annual Report: Auto Business Revenue Breaks RMB 100 Billion
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