Xiaomi Shatters Expectations with Record Q1 Profit and Expanding EV Ambitions

Xiaomi Corporation has reported a record-breaking first quarter for 2025, surpassing analyst expectations with a revenue of 111.3 billion yuan, marking a 47.4% year-over-year increase. The company’s adjusted net profit also soared to 10.7 billion yuan, a 64.5% rise compared to the same period last year.

Smartphone and IoT Growth

The smartphone segment remained a significant contributor, with revenues climbing 8.9% to 50.6 billion yuan. Xiaomi shipped 41.8 million smartphones globally, maintaining its position among the top three smartphone manufacturers worldwide.

The Internet of Things (IoT) and lifestyle products division experienced substantial growth, with revenues increasing by 58.7% to 32.3 billion yuan. The gross margin for this segment improved by 5.4 percentage points, reaching a record 25.2%. Sales of home appliances such as refrigerators and washing machines doubled, while air conditioner sales rose by over 65%.

Electric Vehicle Expansion

Xiaomi’s electric vehicle (EV) business is rapidly gaining momentum. The company delivered 75,869 units of its SU7 series in the first quarter, contributing 18.6 billion yuan in revenue. Despite the EV division currently operating at a loss, Xiaomi aims to sell 350,000 vehicles in 2025, up from its previous target of 300,000. Analysts predict that Xiaomi’s EV business could reach profitability by 2026.

Investment in Research and Development

In the first quarter, Xiaomi invested 6.7 billion yuan in research and development, a 30.1% increase year-over-year. The company employs over 21,700 individuals in its R&D department and has filed more than 43,000 patents. A notable development is the introduction of the Xiaomi XRING O1 chip, a 3nm system-on-chip (SoC) that signifies a significant step in Xiaomi’s “chip, AI, and operating system” strategy.

Market Response

Following the announcement of its impressive financial results, Xiaomi’s shares rose by 2.3%, reflecting investor confidence in the company’s strategic direction and growth prospects.

Additional Information

Xiaomi’s SU7 has outperformed Tesla’s Model 3 in sales within China on multiple occasions, highlighting the competitive nature of the domestic EV market. The company plans to launch its second EV model, the YU7 SUV, in mid-2025, aiming to compete directly with Tesla’s Model Y.

Furthermore, Xiaomi’s AIoT platform has reached a milestone with 943.7 million connected devices, and the Mi Home app boasts 106.4 million monthly active users, indicating strong user engagement and ecosystem expansion.