Lei Jun is no longer gentle and still has two tough battles to fight.

The automotive business has achieved profitability, and the household appliance business has broken through in the overseas market. Lei Jun's two - front battle is showing the first signs of dawn. However, Xiaomi still needs to reconstruct the trust chain among "technology - product - user" and shift from "traffic - driven" to "value - driven."

Recently, Lei Jun, the founder, chairman, and CEO of Xiaomi, broke his usual mild - mannered image and rarely began to express his anger.

On November 16th, Lei Jun posted several Weibo posts in a row to respond to the doubts about the safety of Xiaomi cars. He said that in an interview in April 2024, when talking about product definition, he said, "For a car, good looks come first," but this does not conflict with "safety is the foundation and the premise." To prove this, he screenshot several past remarks about car safety, all of which were made before the release of the Xiaomi SU7.

Source: Screenshot from Weibo

Lei Jun's words "good looks come first" were once interpreted by the outside world as "Xiaomi cars focus more on appearance and less on safety," questioning that it ignores safety standards. Under the comments of netizens on his Weibo post that day, Lei Jun explained that "many people on the Internet take things out of context, distort, and smear."

For Xiaomi cars, which are in a critical production - capacity ramping - up period, any public - opinion storm may be infinitely magnified. Under such pressure, Xiaomi released a quarterly report that attracted wide attention from the outside world on November 18th.

In the third quarter of 2025, Xiaomi's revenue reached 113.1 billion yuan, a year - on - year increase of 22.3%, and its revenue exceeded 100 billion yuan for four consecutive quarters. The adjusted net profit was 11.3 billion yuan, reaching a record high, a year - on - year increase of 80.9%.

More significantly, Xiaomi's innovative businesses such as smart electric vehicles and AI achieved their first single - quarter profit in the third quarter, with an operating income of 700 million yuan.

For reference, leading new - energy vehicle manufacturers such as Li Auto and Leapmotor took more than 7 years to achieve single - quarter profitability. XPeng, which started earlier, also just achieved single - quarter profitability this quarter, while NIO is still in a loss - making state.

However, Lei Jun has no time to celebrate. In addition to the relatively mature smartphone business, he is simultaneously commanding two tough battles: one is the smart - car business that determines Xiaomi's future height, and the other is the IoT business that concerns the breadth and depth of the Xiaomi ecosystem. One of these two fronts is about survival, and the other determines the boundary.

More importantly, while Xiaomi achieved performance growth, the market is also waiting for Lei Jun to answer how to handle the public's questions about product safety, regain users' trust in the Xiaomi brand and himself, and get out of the risk of Xiaomi's over - dependence on Lei Jun's personal IP.

After the release of the financial report, on November 19th, Xiaomi's stock price opened lower. As of the time of writing, Xiaomi's stock price had fallen by 4.02%, reaching HK$39.14. Compared with the high of HK$61.45 on June 27th, the cumulative decline in the stock price this year has exceeded 30%.

The Battle of Cars: The Offensive and Defensive War Behind Profitability

"We will basically achieve the annual delivery target of 350,000 units set at the beginning of the year this week." When talking about production capacity and delivery speed, Lu Weibing, the president of Xiaomi Group, told China Entrepreneur in the third - quarter earnings conference call.

Behind the numbers, the production capacity and delivery of Xiaomi cars have fully picked up. In the third quarter of 2025, Xiaomi delivered 108,796 new cars in a single quarter, setting a new record. Among them, the monthly deliveries in September and October both exceeded 40,000 units.

More notably, just one year after its launch, the gross profit margin of Xiaomi's smart - electric - vehicle division has reached 25.5%, and the average after - tax unit price is stable at around 260,000 yuan, in the same range as luxury brands such as BBA.

The simultaneous achievement of these three key indicators - profitability, delivery, and gross profit margin - marks that Xiaomi cars have initially completed the business closed - loop. What supports this report card is that Xiaomi has laid out a dense sales and service network offline. As of the end of September 2025, Xiaomi had opened 402 sales stores in 119 cities and arranged 209 service outlets in 125 cities.

Photography: Wu Ying

However, beneath the spotlight, crises are still lurking. Lu Weibing admitted in the earnings conference call: "There will still be challenges next year (2026), and the gross profit margin of the automotive business may decline to some extent compared with this year."

He pointed out two key variables: First, the purchase - tax subsidy policy will be halved. According to the policy announced by the state, in 2026, the purchase - tax subsidy policy for new - energy vehicles will be adjusted from the current "full exemption" to "half exemption," with a maximum of 15,000 yuan per vehicle. Second, the automotive industry is still in the early stage of industrial development, and the market is fragmented. "It will take a period of fierce competition before the market converges."

An even more arduous test lies overseas. Previously, Lei Jun had clearly set 2027 as the time point for Xiaomi cars to enter the overseas market and chose the toughest nut to crack - the European market.

"The market share of local German automotive brands reaches more than 50%. Even Toyota, such a powerful brand, only has a 3% market share in the German market." Lu Weibing, who recently returned from an inspection in Europe, clearly recognized the difficulty of this battle. In the past two weeks, he personally drove the SU7 and SU7 Ultra on German highways for nearly 800 kilometers.

"If our products are recognized in Europe, it will be much easier to enter other markets." Lu Weibing told China Entrepreneur.

The Battle of IoT: Competing with Giants like Midea

Beyond the automotive business, the IoT and consumer - product business is becoming Xiaomi's new growth curve.

At the "Xiaomi 15th Anniversary Strategic New - Product Launch Conference" in May this year, Lei Jun clearly stated that "the IoT household - appliance business has become Xiaomi's strategic business." Subsequently, Lu Weibing proposed in the first - quarter earnings conference call of 2025 the performance goal of "becoming one of the top three in China within three years."

At that time, Xiaomi's large - household - appliance business delivered impressive results with double - digit revenue growth. In the following second quarter of 2025, the gross profit of Xiaomi's IoT and consumer - product business exceeded that of the smartphone business, becoming the primary contributor to the profit of Xiaomi Group.

Data from Aowei Cloud Network shows that in July 2025, Xiaomi's online market share of air - conditioners reached 16.71%, surpassing Gree and ranking second only to Midea.

In the third quarter of 2025, the revenue of Xiaomi's IoT and consumer - product business was 27.6 billion yuan, a year - on - year increase of 5.6%, and the growth has been maintained for 7 consecutive quarters; the gross profit margin was 23.9%, a year - on - year increase of 3.2%.

However, it should be noted that the revenue of Xiaomi's smart large - household appliances decreased by 15.7% year - on - year this quarter. The financial report explained that it was "mainly affected by the decline of national subsidies and intensified competition."

In the past few years, Xiaomi's household - appliance business has disrupted the existing order in the household - appliance market, which has formed a stable pattern, with its Internet - based approach, breaking the fortresses that traditional household - appliance enterprises have held for decades.

In March this year, Midea announced in its 2024 annual report that it had sold Xiaomi Group shares worth 902 million yuan and completely cleared its position by the end of 2024. Since 2020, Midea Group has been gradually selling its Xiaomi shares, cashing out nearly 2 billion yuan in total.

The story of mutual empowerment between the Internet and the household - appliance industry has come to an end. A confrontation between new and old forces is unfolding, and the competition in the household - appliance market has become extremely fierce. Fang Hongbo, the chairman of Midea, once admitted that he should "attach importance to Xiaomi tactically but not be afraid of it strategically." He also revealed that Midea had prepared "three research reports totaling more than 100,000 words" to study Xiaomi.

In response, although Lei Jun responded with high emotional intelligence, saying that "Midea is a very excellent enterprise" and emphasizing "learning from each other to make better products," on the JD platform, the price of the same - specification air - conditioner of Welling, a sub - brand of Midea, is 120 yuan lower than that of Xiaomi, clearly indicating a price war.

Recently, the executives of Xiaomi and Gree have also sparked several "wars of words" in the public - opinion field regarding market competition. In September this year, Xiaomi also launched a "ten - year warranty" policy in the air - conditioner field to cope with the competitive pressure from its peers.

Lu Weibing told China Entrepreneur: "The current household - appliance market is in the process of transition between the old and new patterns. The old pattern will surely be broken, and a new pattern will surely be established." Previously, Lu Weibing had proposed the goal of "entering the top brands of large - household appliances by 2030 and ranking among the top two in the Chinese air - conditioner market."

To this end, Xiaomi has also started to build a higher moat in intelligent manufacturing. In October 2025, Xiaomi's smart - household - appliance factory in Wuhan was officially put into operation. This is Xiaomi's third large - scale intelligent - manufacturing base after the smartphone factory and the automobile factory, and it is also the most crucial move in the large - household - appliance segment of its "smart - car, smartphone, and smart - home full - ecosystem" strategy. The total investment in the first phase of the factory exceeds 2.5 billion yuan, with a planned peak annual production capacity of 7 million air - conditioners.

Shan Lianyu, the general manager of Xiaomi's large - household - appliance department, told China Entrepreneur that the Xiaomi large - household - appliance factory stands on the shoulders of two "giants": One is the household - appliance industry itself. "The household - appliance industry is one of the few industries in China that can export products, technologies, standards, and equipment globally. We have learned a lot from our peers." The other is the manufacturing experience of Xiaomi's smartphones and cars.

The cross - border integration of product categories can be seen everywhere in the Wuhan factory. Shan Lianyu said that the SMT (Surface Mount Technology) and AI quality - inspection capabilities of Xiaomi's smartphone business have been reused here, greatly improving the yield rate of household - appliance motherboards; the macro - management logic of Xiaomi's automobile factory has also been borrowed to optimize the logistics flow of large - household - appliance manufacturing, forming the concept of 'large - scale delivery, large - scale logistics, and small - scale production.'

Facing the fierce competition in the industry, Shan Lianyu told China Entrepreneur that the core of Xiaomi's household - appliance competition lies in industrial intelligence and product innovation. "Inside the Xiaomi large - household - appliance factory, 120,000 data - collection points are operating in real - time, and 136 AI visual inspections have greatly improved the production yield rate and efficiency. Through industrial artificial - intelligence capabilities, it can make its own decisions, learn on its own, and execute on its own."

In the after - sales service beyond production, Shan Lianyu gave an example that through intelligent means, Xiaomi can prevent air - conditioners from operating in a "sub - healthy" state for a long time, thereby extending their service life. The system can remotely monitor that the dust accumulation on the filter in the user's home has led to a decline in efficiency and actively push a cleaning reminder. In the past, "about 30% of after - sales work orders were due to dirty filters."

However, Xiaomi still has some weaknesses in the offline channels. According to data from Aowei Cloud Network, in the first seven months of this year, in the offline air - conditioner market, the market shares of Midea, Gree, and Xiaomi were 29.63%, 30.21%, and 0.25% respectively. Xiaomi currently still mainly relies on Xiaomi Home and third - party 3C stores for its offline channels and cannot compete with the huge dealer systems of traditional household - appliance brands.

How to Win Back Users' Trust?

However, for Xiaomi at present, the most thorny issue is probably how to regain users' trust. Since this year, Xiaomi's brand image has been challenged several times due to unexpected events.

In March this year, a traffic accident involving a Xiaomi SU7 in Anhui unfortunately resulted in the deaths of three passengers, which triggered widespread attention across the industry regarding the safety of assisted - driving systems. Subsequently, the owners of the Xiaomi SU7 Ultra launched a rights - protection campaign on various social platforms regarding the front - hood with a punched - out hole. In September this year, Xiaomi recalled 117,000 Xiaomi SU7s, and another accident involving a Xiaomi car in Chengdu once again pushed Xiaomi into the spotlight.

Looking back at the public - opinion storms that Lei Jun and Xiaomi have faced this year, on the surface, it seems to be a reversal of the brand image, but in essence, it reflects the cognitive conflict that Xiaomi faces during the transformation period - when a company crosses over from the relatively mature smartphone business to the two completely different battlefields of cars and household appliances, the outside world needs to use new criteria to measure it.

In the automotive field, Xiaomi needs to face global giants such as BYD and Tesla, as well as a group of new forces. In the large - household - appliance field, Xiaomi is facing traditional giants such as Midea, Haier, and Gree, which have been deeply involved in the industry for decades. With the decline of national subsidies and intensified competition, 2026 will be a more brutal elimination stage.

The automotive and household - appliance businesses, seemingly two parallel lines, are gradually converging under Xiaomi's "smart - car, smartphone, and smart - home full - ecosystem" strategy. At this moment, Lei Jun is simultaneously commanding two different but equally arduous battles.

The automotive business needs to continue to expand its scale after achieving profitability and cope with more intense competition next year. The large - household - appliance business needs to break the old pattern and carve out a path in the market dominated by traditional giants. This two - front battle not only tests Xiaomi's product capabilities and technological reserves but also its strategic patience and ecological synergy capabilities.

Going overseas is considered one of the solutions to break the bottleneck. This year, Xiaomi's household - appliance business has entered the Southeast Asian and European markets. Lu Weibing revealed: "As of the end of September 2025, the number of domestic and overseas stores meeting Xiaomi's new - retail standards has reached more than 300, and it is expected to reach 500 by the end of the year. After Xiaomi's new - retail model goes global, it will be a very important capability foundation for the full - ecosystem overseas expansion."

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