On the evening of August 21st, Xiaomi Group released its second-quarter financial report for 2024. Revenue reached 88.9 billion yuan during the reporting period, an increase of 32% year-on-year.

Unlike in the past, the automotive business was listed separately for the first time. The revenue from innovative businesses such as smart electric vehicles during the reporting period was 6.4 billion yuan, of which 6.2 billion yuan came from smart electric vehicles. Corresponding to Xiaomi SU7's quarterly sales of 27,307 vehicles. As of the end of the reporting period, Xiaomi Auto's overall gross margin was 15.4%. This gross margin is higher than that of most domestic automakers and comparable to Tesla during the same period.

Lu Weibing, Xiaomi Group Partner and Group President, expressed satisfaction with the gross margin of Xiaomi SU7, reflecting Xiaomi Auto's capabilities in supply chain management and intelligent manufacturing. "The supply chain has confidence in Xiaomi, and Xiaomi Auto has realized cost savings," he said.

However, after deducting R&D expenses, Xiaomi Auto still had an adjusted net loss of 1.8 billion yuan during the reporting period. After calculation, it equates to a loss of 60,000 yuan per car sold!

This surprised some automakers' employees. A PR director at Jiyue said, "Losing 60,000 yuan per car, why sell so many when you're losing so much? Some companies lose money because they can't sell without discounting. What do Xiaomi and Lei Jun call this? In the past, this would be called dumping."

After all, Xiaomi SU7 is not short of orders. Currently priced from 215,900 yuan, the number of locked orders has exceeded 100,000, with an estimated total value exceeding 27 billion yuan. In contrast, Jiyue, also born from a "big factory" like Baidu, has had an unsuccessful journey in the automotive industry. Moreover, due to overlapping target audiences and similar prices, Jiyue's customers have been diverted again, resulting in monthly sales of less than 1,000 vehicles.

Xiaomi CFO Lin Shiwei seemingly responded to this matter, saying, "We are willing to sacrifice profits to develop electric vehicles and prioritize scale."

Regarding the topic of losing 60,000 yuan per car sold, Xiaomi Auto founder Lei Jun also responded, "Building cars is tough, but success will definitely be cool! Xiaomi Auto is still in the investment stage, and we hope for your understanding."

According to Lei Jun's previous sharing, Xiaomi Auto's R&D investment in 2023 reached 19.1 billion yuan, and it is expected to invest 24 billion yuan this year. In fact, not only Xiaomi Auto, but among the many new energy vehicle brands, only a few automakers such as BYD, Tesla, and Lixiang have achieved positive profits.

Lei Jun previously stated that based on current market feedback and forecasts, when the annual sales volume of Xiaomi SU7 reaches 300,000 to 400,000 vehicles, the model is expected to become profitable.

Image source: Xiaomi Auto