The gross profit margin of Xiaomi's car - making business has exceeded that of Tesla, and the average price per vehicle is on par with those of BBA brands. Profitability is in sight, but Xiaomi is "in no hurry".

Almost every sentence in Xiaomi's latest financial report is about "new highs."

In the second quarter, the group's total revenue reached 116 billion yuan, and the adjusted net profit was 10.8 billion yuan, both hitting new historical records.

The growth curve of the automotive business is even more astonishing:

In Q2, 81,302 vehicles were delivered. The automotive gross profit margin has soared to 26.4%, surpassing Tesla and Li Auto. It may be second only to SERES, whose financial report has not been released yet, firmly placing Xiaomi at the top level among new - energy vehicle startups.

All in all, after five years of car - making and over a year since the car's launch, the automotive revenue has exceeded that of XPeng and Leapmotor. The operating loss has been reduced to 300 million yuan. It's very likely that we'll see Xiaomi's automotive business achieve quarterly profitability in the second half of this year.

Xiaomi Releases Financial Report with New Highs

As expected, Xiaomi's latest financial report continues to break its own best records.

In the first half of this year, Xiaomi Group's total revenue was 227.249 billion yuan, a year - on - year increase of 38.2%.

Among them, the revenue in the second quarter was 116 billion yuan, a year - on - year increase of 30.5%. It has exceeded 100 billion yuan for three consecutive quarters, setting a new historical high.

In terms of profit, Xiaomi Group's gross profit in the first half of the year was 51.5 billion yuan, a year - on - year increase of 46.2%; the semi - annual gross profit margin was 22.7%.

The gross profit in the second quarter was 26.1 billion yuan, a 41.9% increase from 18.4 billion yuan in the same period last year; the gross profit margin in the same period was 22.5%, a year - on - year increase of 1.8 percentage points.

Xiaomi Group's net profit in the first half of the year was 22.766 billion yuan, a year - on - year increase of 146.3%.

The net profit in the second quarter was 11.87 billion yuan, a year - on - year increase of 134.2%. Under non - IFRS, the adjusted net profit exceeded 10 billion yuan for two consecutive quarters, reaching 10.8 billion yuan in Q2, a year - on - year increase of 75.4%.

In terms of expenditure, Xiaomi Group's R & D expenses in Q2 were 7.8 billion yuan, a year - on - year increase of 41.2%.

Xiaomi invested a total of 14.48 billion yuan in R & D in the first half of the year, a year - on - year increase of 35.8%. It is expected to complete 30 billion yuan in R & D investment for the whole year. As of the end of the first half of the year, the number of R & D personnel also reached a record 22,641.

Looking specifically at the automotive business part, first of all, what the outside world is most concerned about should be the detailed sales data:

In the second quarter, Xiaomi delivered a total of 81,302 vehicles, a year - on - year increase of 197.7% and a quarter - on - quarter increase of 7.2%.

Notably, in July, Xiaomi's vehicle deliveries exceeded 30,000 for the first time. Among the new - energy vehicle startups' rankings, it reached the same delivery level as Li Auto, ranking fourth or fifth. Since its launch 15 months ago, the total deliveries of Xiaomi cars have exceeded 300,000.

In the second quarter, Xiaomi's revenue from the intelligent electric vehicle and AI and other innovative businesses segment was 21.3 billion yuan, a year - on - year increase of 34%.

The revenue of intelligent electric vehicles in Q2 was 20.6 billion yuan, and its proportion in Xiaomi's total revenue has increased from 7% in Q2 last year to 17.8% now.

In the financial reports of the new - energy vehicle startups that have been released, it has exceeded XPeng's 18.2 billion yuan, Leapmotor's 14.2 billion yuan, and Geely's Zeekr brand's 10.9 billion yuan.

Xiaomi's automotive gross profit margin is even more astonishing this quarter. The automotive gross profit margin in Q2 has reached 26.4%, a year - on - year increase of 11 percentage points. Since the fourth quarter of last year, it has surpassed Tesla and Li Auto, leading most new - energy vehicle startups and reaching the top level.

Except for SERES, there may be no other new - energy vehicle startups with the same gross - profit - margin level in Q2.

Xiaomi explained the reason for the sharp rise in the automotive gross profit margin in the financial report:

It mainly comes from the decline in the cost of core components, the reduction in unit manufacturing costs, the delivery of the Xiaomi SU7 Ultra, and the rising gross profit margin of other related businesses.

Another point worth noting is that Xiaomi's automotive losses continue to narrow. The operating loss this quarter was 300 million yuan, compared with 1.8 billion yuan in the same period last year and 500 million yuan in Q1.

Referring to XPeng, which also released its financial report around the same time and is on the verge of profitability, its operating loss in Q2 was 900 million yuan, and the net loss was 480 million yuan.

Judging from the financial report data, Xiaomi, the "youngest" new - energy vehicle startup, has not only successfully applied the Internet model to car - making but also achieved remarkable results at a rapid pace.

The Automotive Business Achieves High - end Positioning First and Will Turn Profitable in the Second Half of the Year

Xiaomi's long - cherished wish to achieve high - end positioning has unexpectedly been realized first in the automotive business.

Relatively speaking, the latest and most - watched automotive business is gradually becoming the growth pillar of Xiaomi's business.

For example, in the second quarter of this year, Xiaomi Group's comprehensive gross profit margin was 22.5%, largely driven by the high 26.4% gross profit margin of the automotive business.

Looking at the new - energy vehicle startups, which one hasn't experienced ups and downs for many years before gradually turning the gross profit from negative to positive and then slowly reaching double - digits?

Xiaomi has been making cars for only five years, and such a growth rate in the gross profit margin is truly exceptional.

Lu Weibing, President of Xiaomi, believes that there are two reasons for Xiaomi's high automotive gross profit margin:

Firstly, the success of Xiaomi's automotive strategy - choosing to enter the high - end market.

In terms of the average vehicle price, the average price of Xiaomi cars in the second quarter was 254,000 yuan, a year - on - year increase of 10.9%.

Of course, this year - on - year increase is related to the delivery of the higher - priced SU7 Ultra.

However, in the past few quarters, the average price has not fluctuated much, basically remaining around 230,000 yuan and is not affected by the price - war in the market. In fact, it has firmly established itself in this price range.

Lu Weibing also said that if the contract includes tax, the actual average price is around 286,000 - 287,000 yuan. This unit price of just over 280,000 yuan is basically at the level of the former BBA.

Secondly, this level of automotive gross profit margin cannot be achieved without the long - term experience of Xiaomi Group in the consumer electronics field.

This enables Xiaomi cars to have platform - integration capabilities from the start. The three models launched by Xiaomi - Xiaomi SU7, Xiaomi SU7 Ultra, and Xiaomi YU7 - are all based on the same platform.

The biggest advantage of this model is that its products generally have the characteristics of modularity and standardization. On the same platform, it can quickly form platform - scale economies. Many technologies and components can be shared, which can also reduce costs and more effectively leverage the supply - chain advantages.

Lu Weibing has mentioned more than once that Xiaomi's automotive success relies on the blockbuster - product model.

By doing a good job in platformization and standardization and then establishing economies of scale with a single blockbuster product, fixed costs can be spread out to the greatest extent, and higher bargaining power can be obtained. Then, it will be natural for the gross - profit level to rise.

This business model has not only been applied to Xiaomi's automotive business but will also be extended to overseas markets in the future.

Lu Weibing revealed that when Xiaomi goes global in 2027, it will continue to apply this strategy in Europe.

Why choose Europe?

Because it is the birthplace of the automotive industry. In Lu Weibing's view, Xiaomi's strategy has always been to start with the difficult tasks, whether it's making cars or chips.

However, some people may wonder why Xiaomi's automotive business is still in the red despite such a high gross profit margin?

The reason lies in the operating expenses, that is, large - scale investments are still being made in R & D, sales, management, and other expenses.

In the second quarter of this year, Xiaomi's automotive operating expenses were 5.9 billion yuan.