Xiaomi unveiled strong quarterly results on Tuesday, marking the acceleration of its diversification into electric vehicles (EVs). The group's revenue jumped 47.4% y-o-y in Q1 2025 to 111.3bn yuan ($15.48 billion), exceeding the average forecast of 107.6bn yuan by 17 analysts surveyed by LSEG.
Adjusted net profit jumped 64.5% to 10.7bn yuan, again above expectations (8.96bn yuan). This performance reflects the leverage effect of the group's multi-sector strategy, which is establishing itself as one of Tesla's main challengers in the Chinese market.
The YU7 SUV expands Xiaomi's electric range
A few days before the results were released, Xiaomi unveiled its new electric SUV, the YU7, which will go on sale in July. While remaining tight-lipped about prices, the manufacturer has indicated that its high-end versions are expected to be 60,000 to 70,000 yuan more expensive than Tesla's Model Y, which starts at 263,500 yuan ($36,574).
The Chinese group made a splash in the automotive market last year with the SU7 electric sedan, inspired by Porsche design and priced below the Model 3. Since December, the SU7 has outsold Tesla's Model 3 every month in China. Xiaomi delivered 75,869 SU7s in the first quarter, generating 18.1bn yuan in revenue for its automotive division. Since its launch, more than 258,000 units have been sold.
Dynamic growth despite recent setbacks
Despite this momentum, the group's automotive division posted an adjusted net loss of 0.5bn yuan, linked to investments in this business, which is still in the ramp-up phase. Xiaomi also had to deal with negative fallout from a fatal highway accident involving an SU7 in driver assistance mode at the end of March. Added to this were accusations of false advertising, in response to which the company issued an apology in early May, acknowledging a lack of clarity in its marketing communications.
Nevertheless, the markets have welcomed the group's resilience: Xiaomi's share price has rebounded since April, bringing its market capitalization to around $170bn, more than BYD (around $161bn), the market leader in electric vehicles in China.
With an ambitious strategy combining smartphones, connected devices and now cars, as well as its own mobile chips, Xiaomi continues to blur the lines between tech and mobility, establishing itself as a key player in China's new industrial generation. This is what Jefferies emphasizes, explaining: "Xiaomi remains our top pick in Chinese tech, given 1) strong growth supported by a distinctive ecosystem, 2) minimal pricing impact on its business, and 3) no risk of ADR delisting." It adds in its analysis: "During our trip to the United States, we found that all EM/Asia funds held the stock, but the most common objections are high investor expectations and a potential delay in the launch of its SUV."
