Xiaomi's Automotive Business Reports First Quarterly Operating Loss

[Operating Loss] Xiaomi's automotive business recorded its first operating loss in Q1 2026.

Core Developments: Revenue from New Initiatives Rises to 20%, but Profitability Under Pressure

Xiaomi Group reported total Q1 2026 revenue of RMB 99.1 billion, down 10.9% year-over-year; adjusted net profit stood at RMB 6.1 billion, a 43.1% decline year-over-year. Within this, the smart electric vehicle and AI-driven new initiatives segment generated revenue of RMB 19.9 billion, up 6.9% year-over-year, but incurred an operating loss of RMB 3.1 billion—marking its first quarterly loss since Q3 2025.

Key Metrics: Declines in Both Delivery Volume and Average Selling Price Drive Revenue Drop

Vehicle deliveries for the quarter totaled 80,856 units, down 44.3% quarter-over-quarter; average selling price was RMB 235,116, a 5.9% sequential decline. The primary drivers were reduced deliveries of the Xiaomi YU7, discontinuation of the SU7, and the phase-out of purchase tax subsidies.

Strategic Rationale: Short-Term Pain for Long-Term Gain

Despite profitability pressures, the automotive business has become the group’s second-largest segment, with continued strategic investment.