China’s Xiaomi (XIACF) Optimistic About EV Business Turning Profitable in H2 2025

Xiaomi (XIACF) expects its electric vehicle (EV) business to turn profitable in the second half of 2025. The Chinese smartphone giant and EV maker’s founder, Chairman, and CEO Lei Jun provided this timeline on Tuesday at the Xiaomi Investor Day event. XIACF stock has rallied 51% year-to-date, as the company’s rapid growth in the EV space has impressed investors.

Xiaomi’s EV Business Moves on the Right Track

Xiaomi announced its entry into the auto space in March 2021. The company launched its first model, the SU7 electric sedan, in March 2024 and has grown at a strong pace since then. In Q1 2025, Xiaomi delivered 75,869 SU7 series EVs, reflecting an 8.86% growth compared to the fourth quarter of 2024.

In Q1 2025, Xiaomi’s innovative businesses, including EV and artificial intelligence (AI), delivered RMB 18.6 billion in revenue, with RMB 500 million generated by other businesses. The company’s innovative businesses’ gross margin was 23.2% in Q1 2025, up from 20.4% in the previous quarter. Moreover, the operating loss came down to RMB 500 million in the first quarter from RMB 700 million in Q4 2024.

If Xiaomi’s EV business turns profitable in the second half of 2025, then it will become the fastest Chinese EV maker to achieve profitability. Note Nio (NIO) and XPeng (XPEV), both founded about 10 years ago, aim to generate quarterly profitability this year. In comparison, Li Auto turned profitable in Q4 2022. The Chinese EV market is very competitive, with price wars putting pressure on margins.

Is Xiaomi Stock a Buy, Hold, or Sell?

Turning to Wall Street, Xiaomi stock scores a Strong Buy consensus rating based on 11 Buys and two Hold recommendations. The average XIACF stock price target of $8.72 implies about 31% upside potential.

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