Xiaomi Corporation recorded its most sluggish quarterly expansion since 2023 because surging electric vehicle sales could not fully compensate for the downturn in smartphone demand. Although the company generated 116.9 billion yuan in revenue and slightly beat market expectations, the 7.3% growth rate reflects a cooling trend. Xiaomi successfully delivered over 145,000 vehicles during the December quarter, which helped its automotive division achieve a profit of 1.1 billion yuan. However, the core smartphone business faced significant headwinds due to rising memory costs and a global market contraction of 12.9%. While Xiaomi remains the world's third largest phone vendor, its shipments fell by 11.5% even as the broader market saw slight growth.
To diversify, billionaire co founder Lei Jun has set an ambitious target to deliver 550,000 cars by 2026 and plans to enter the European market by 2027. This expansion comes at a difficult time as the Chinese EV sector remains trapped in a fierce price war amid a slowing economy and the removal of government subsidies. These pressures have contributed to Xiaomi’s stock price dropping more than 40% from its 2025 peak. In response to rising material costs, the company recently increased the price of its updated SU7 sedan by 2%. Beyond hardware, Xiaomi is now investing in AI agent technology to challenge domestic competitors like Alibaba and Tencent in the rapidly evolving artificial intelligence landscape.
Source: Bloomberg
