Xiaomi EV Unit Posts Q1 Loss Despite Higher Deliveries

Xiaomi’s electric vehicle business reported an operating loss of 3.1 billion yuan ($460 million) in the first quarter of 2026, even as deliveries rose from a year earlier. The company attributed the weaker result to the Spring Festival holiday period in China and a short-term disruption as it transitioned to a facelifted version of its SU7 sedan. The loss followed the segment’s first quarterly profit in Q3 2025 and its first annual operating profit for full-year 2025.

Xiaomi delivered 80,856 vehicles in Q1 2026, up 6.57% year on year. Revenue from its “innovative businesses,” including EV and AI, totaled 19.9 billion yuan in the quarter, with the EV business contributing 19 billion yuan.

Xiaomi said the product transition temporarily pressured profitability, and that seasonality also weighed on demand and production during the holiday period. The results contrast with the segment’s stronger performance in 2025, when the company reported its first quarterly profit in the third quarter and its first annual operating profit for the year.

Margins pressured by subsidy changes and component costs

Gross margin for the innovative business segment fell 3.1 percentage points from a year earlier to 20.1% in Q1 2026. Xiaomi attributed the decline to reduced purchase tax subsidies for new energy vehicles in China and higher costs for core components.

The company’s quarterly delivery growth was accompanied by a weaker March, reflecting the transition period for the SU7 model. March deliveries totaled 21,440 vehicles, a 26.69% decline from the prior year, according to the figures cited in the report.

April rebound tied to new-generation SU7

Deliveries rebounded in April to 36,702 vehicles, up 71.18% from March. Xiaomi said the recovery was largely driven by the new-generation SU7 electric sedan, which accounted for 26,826 units.

Investors will be watching whether deliveries and margins stabilize as the updated SU7 rolls out more broadly, and whether the segment can return to profitability after the holiday- and transition-related drag.