From the traffic frenzy to rational return, a sober reflection on Xiaomi Auto's 2025 performance

Yesterday (March 24), Xiaomi Group released its full-year 2025 performance announcement. According to the official financial report, Xiaomi Group’s total revenue for 2025 reached RMB 457.3 billion, a year-on-year increase of 25.0%; adjusted net profit was RMB 39.2 billion, a year-on-year increase of 43.8%, and both set historical highs.

Among them, the data for the auto business segment is especially striking: throughout the year, new car deliveries totaled 411,082 units, a year-on-year increase of 200.4%, exceeding the initial delivery target of 350,000 units set at the beginning of the year; revenue from innovative businesses such as intelligent electric vehicles and AI reached RMB 106.1 billion, a year-on-year increase of 223.8%, breaking through the RMB 1 trillion mark for the first time; the auto business gross margin was 24.3%, up 5.8 percentage points year-on-year.

More importantly, it marked the first time in annual terms that operating earnings turned positive, with profits of RMB 900 million. This also means that, in just two years, Xiaomi Auto has already completed the key leap from “burning money” to “creating blood,” which is enough to draw attention from the industry.

01

Structural support behind the achievement

Part One

Of course, being able to deliver such an outstanding set of results is inseparable from Xiaomi Auto’s precise positioning in its product matrix layout.

According to official data, in 2025, deliveries of the Xiaomi SU7 series exceeded 246,000 units, surpassing Tesla Model 3 to become the top-selling sedan in China for vehicles priced above 200,000 yuan. The YU7, launched in June, has also performed strongly; as of February 2026, it has remained No. 1 on the sales chart for mid-to-large SUVs for seven consecutive months.

In addition, the upward shift in its product structure has achieved notable results. Xiaomi Group CFO Lin Shiwei revealed during the earnings call that in 2025, Xiaomi Auto’s average tax-included unit price exceeded 280,000 yuan, up significantly from 234,000 yuan in 2024. The ramp-up of the SU7 Ultra and YU7 series not only lifted the average selling price, but also proved Xiaomi’s ability to break through in the high-end market.

Not only that, behind the RMB 900 million annual operating profit is also the classic scale effect typical of the manufacturing industry. With deliveries in 2025 surging 200.4% year-on-year, fixed costs were substantially diluted; at the same time, component procurement costs fell as scale increased, pushing the gross margin from 18.5% in 2024 up to 24.3%. This profit path closely matches the trajectories of early movers such as Tesla and BYD.

However, despite the strong momentum in business, doubts within the industry about Xiaomi Auto have not disappeared. Just days before the financial report was released, Xiaomi launched the new generation SU7. Order locks exceeded 15,000 in 34 minutes after sales began, and exceeded 30,000 within 3 days after sales began. Although these figures remain impressive, compared with the first-generation SU7’s 88,898 units of subscriptions (24-hour) two years ago, the burst of momentum still falls far short.

That is why many netizens or users have started to lament: Xiaomi Auto’s popularity now is no longer as high as before.

02

The real picture of the “popularity ebbing”

Part Two

In fact, the sense that “popularity is not as strong as before” is not a subjective misconception, but an objective reflection of the market moving from the “explosive period” into a “stable period,” driven primarily by the combined effect of three factors.

First is the long-term constraint of production capacity bottlenecks. Although Xiaomi delivered 410,000 units in 2025, the mismatch between production capacity and demand has always been the sword of Damocles hanging over Xiaomi. When the YU7 was launched in June 2025, it saw 240,000 units locked in orders within 18 hours; however, the designed annual production capacity of the Phase 1 plant was only 150,000 units, and the Phase 2 plant was not commissioned until July 2025.

This imbalance leads to a prolonged waiting period for users. It is understood that the delivery cycle for the first batch of YU7 customers was as long as 42–59 weeks. Even by the end of 2025, newly locked-in order customers still needed to wait at least 33 weeks as quickly as possible. When consumers realize that “if you place an order now, you’ll get the car next year,” some demand naturally shifts to competitors.

Second is the impact of public opinion stemming from a safety trust crisis. For Xiaomi Auto, 2025 was a year where commercial success and a trust crisis coexisted. According to publicly reported information, on March 29, an accident on the Anhui DeShang Expressway involving the collision and fire/explosion of the standard version of SU7 resulted in 3 deaths. In the vehicle’s highway NOA state, it failed to recognize the construction and road-modification segment; AEB did not trigger; after the collision, the vehicle doors locked shut; on October 13, another accident involving the SU7 Ultra on the Chengdu Ring Expressway once again exposed the issue of doors not opening.

Even more systemically impactful was that in September 2025, Xiaomi recalled 116,900 units of the SU7 standard version due to collision risks in extreme special scenarios involving its L2 highway navigation-assisted driving system, accounting for nearly half of the cumulative deliveries at that time. Although it completed upgrades via OTA, objectively it still weakened the brand’s promise of “quality you’re proud of.”

Finally, there was the reshaping of the market competition landscape. According to data from the CPCA (China Passenger Car Association), in 2025 Xiaomi Auto’s retail sales were 411,837 units, with a market share of 3.2%, ranking tenth. Although the growth rate is astonishing, compared with leading brands such as BYD and Geely, the gap in scale remains significant.

More critically, a competitive encirclement has already formed. Tesla Model Y has continued to cut prices; Huawei’s smart-driving ecosystem, backed by the smart-driving label, has risen quickly; in addition, models such as XPeng P7+ and Zeekr 007 also directly went head-to-head with the SU7 in the 200,000 to 300,000 yuan price range. When the market shifts from “does Xiaomi have (a product)?” to “is Xiaomi good or not?”, the traffic dividend naturally fades.

03

The key proposition for crossing the cycle

Part Three

There is no denying that Xiaomi Auto has achieved RMB 1 trillion in revenue in two years, annual profitability, and an average price above RMB 250,000—these indicators are, among new entrants, truly efficiency benchmarks. Its “people-car-home full ecosystem” strategy shows unique value—AIoT platform device connection counts have exceeded 1.079 billion units, providing differentiated intelligent experiences for vehicles. The 2026 delivery target is 550,000 units; if achieved, it will further consolidate its position in the industry.

But obviously, the challenges it faces next are even more impossible to ignore. On capacity, even if the Phase 2 plant is put into operation, whether the 2026 capacity can support the 550,000-unit target remains in doubt. After all, when the delivery cycle lasts as long as half a year, it is a huge test for users’ patience thresholds and brand loyalty.

As for rebuilding safety trust, it also requires long-term investment. The two fatal accidents revealed not only technical shortcomings, but also systemic insufficiencies in safety redundancy design. Although the new generation SU7 has made adjustments and upgrades, the repair of public sentiment is far from complete.

At the same time, it is also necessary to pay attention to the fact that the RMB 900 million annual profit in the financial report accounts for less than 1% of the RMB 1 trillion revenue, meaning the profitability foundation is still not solid. The fourth quarter of 2025 alone saw single-quarter profits of RMB 1.1 billion, but whether that can be sustained depends on the dynamic balance between scale expansion and cost control.

There is no doubt that Xiaomi Auto is standing at a crossroads from “an internet celebrity” to “a evergreen brand.” The key propositions for the future are: whether it can transform the internet era’s “speed-first” mindset into “safety-first” for the automotive industry; whether it can hold the quality bottom line amid a sprint for capacity; and whether it can establish clearer user expectations management in its autonomous driving promotion.

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Written at the end:

The 2025 financial report proves that Xiaomi Auto has made it through—and it’s doing pretty well. But “first-time profitability” is not the endpoint; it is the true beginning of the real test. When early users’ frenzy fades, when competitors all roll out competitive products, and when regulators’ requirements for autonomous driving safety become increasingly strict, Xiaomi Auto needs to prove not only that it can build a car that is “good-looking and easy to drive,” but also that it can build a “trustworthy and reliable” brand.

Moreover, the ebbing of popularity may not necessarily be a bad thing. It means the market is returning to rationality, users are becoming more mature, and competition is becoming fairer. For Xiaomi, shedding the traffic halo and honing its system-level capabilities may be the necessary path to evolve from a “phenomenon-level product” into an “industry-level company.”

As Lei Jun said, Xiaomi hopes to become one of the world’s top five car companies through 15 to 20 years of effort. In 2025, this dream took a solid step forward, but the road ahead will be far longer than what has already been traveled.

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Responsible editor: Liu Wanli SF014