The technology giant Xiaomi released its official financial report for the first quarter of 2026. The division responsible for smart-home products and innovative AI technologies reported operating revenue of 19.9 billion yuan (around 2.9 billion USD). However, the other side of this rapid growth was significant losses: Xiaomi’s automotive division posted an operating loss of 3.1 billion yuan (around 457 million USD).
Considering that the company delivered 80,856 vehicles during the three-month period, the loss per vehicle sold amounted to roughly 5,600 USD. For comparison, in the first quarter of last year this figure stood at around 900 USD.
Despite the negative profitability, delivery growth remains promising. Total deliveries reached 80,856 units, representing a 6.6% increase compared with the first quarter of 2025, when customers received 75,869 vehicles. Revenue from EV sales alone reached 19 billion yuan, resulting in an average selling price (ASP) of approximately 235,000 yuan (around 34,600 USD) per vehicle.
Xiaomi representatives emphasize that this positive trend was achieved despite production adjustments and lower delivery volumes of the company’s first model, the first-generation SU7 sedan.
The main driver of sales was the all-new YU7 crossover. At the beginning of May, the updated SU7 sedan, which entered the market in March, had already collected more than 80,000 confirmed pre-orders. At the same time, the YU7 crossover family demonstrated impressive performance: within ten months of its market debut, cumulative deliveries exceeded 232,000 units.
Within the lineup, pricing is structured as follows: the flagship YU7 GT, launched on May 21, starts at 389,900 yuan (57,300 USD), while the entry-level YU7 starts at 233,500 yuan (34,300 USD). To support such high sales volumes, Xiaomi established a large dealer network consisting of 490 retail centers across 143 cities in mainland China.
The main challenge of the quarter was margin pressure. The gross margin of the automotive and AI segments declined from 23.2% last year to 20.1% currently. Financial analysts attribute this decrease to the need to provide substantial customer subsidies to offset vehicle purchase taxes, a temporarily lower share of premium and high-margin models such as the SU7 Ultra in the sales mix, as well as rising costs of key electrical components.
However, April’s operating results were encouraging. In a single month, the company sold 36,702 vehicles, representing growth of 28.4% year-over-year and 71.2% compared with March.
