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Chinese tech giant Xiaomi, known for making smartphones, turned heads in March when its maiden electric vehicle sold out with almost 90,000 preorders within a day of launch.
Its new auto branch posted an adjusted loss of $252 million for the second quarter ending June 30 — its first-ever full delivery quarter, the company said in its unaudited results filed on Wednesday.
That's despite Xiaomi saying it's on track to smash its target of 100,000 deliveries of its first car, the Speed Ultra 7, by November.
The new electric vehicle maker said it delivered 27,307 SU7s in the second quarter, meaning that, on average, it lost $9,200 for each car. The base price of the SU7 is 215,900 yuan, or about $30,000.
That's not to say that Xiaomi loses more money when it delivers more cars: The firm reported a higher-than-anticipated gross profit margin of 15.4%.
Yet it's signaled for a while that its auto segment would take time to break even, with CEO Lei Jun mentioning in April that the car was selling at at a loss, though he didn't say by how much.
Citibank analysts wrote in a report at the time that they expected Xiaomi to turn a profit only after hitting annual sales of 300,000 to 400,000 vehicles. They forecast sales of 260,000 cars in 2026.
Xiaomi operates one EV factory, which it built itself. Since June, it's been running double-shift operations to push monthly deliveries past 10,000 cars.
A company spokesperson told Business Insider that the firm is focusing on increasing the scale of its EV arm to narrow per-car costs.
"The scale of Xiaomi EV business is relatively small at the moment, while the auto industry is a typical industry with economies of scale," the spokesperson said.
For comparison, competing Chinese EV maker BYD sold 426,039 cars in the April-June quarter.
Xiaomi's spokesperson added: "In addition, Xiaomi's first EV is a pure electric sedan, and its investment cost is relatively high, so it will take some time to digest this part of the cost."
Lei Jun, the billionaire cofounder of Xiaomi, said in March that he intended to pour "tens of billions of investment" over the next few years into building Xiaomi's EV division and car technologies.
The tech firm has long said its vision for the SU7 is to create a smart car that rivals Elon Musk's Tesla but is priced more in line with the average Chinese income.
Xiaomi said customers are still coming in, with 13,000 more vehicles sold in the second quarter and July combined.
Its ambitions for its EV range far, including self-driving and self-parking capabilities and an audio-based artificial intelligence assistant to be fully shipped this month.
Overall, Xiaomi posted strong results for its second quarter, with sales across all its sectors rising 32% to 88.7 billion yuan compared to the same period in 2023.
Net income also hit 5 billion yuan, up 38% from 3.6 billion yuan in the second quarter last year.
The company said it plans to build a variety of EV models beyond the SU7 sedan but has not said what they will be.
