Xiaomi Car Reports Over 60,000 Yuan Loss per Vehicle, Lei Jun: "Building Cars is Hard, But Success Will Be Cool!"

Xiaomi Car Reports Over 60,000 Yuan Loss per Vehicle, Lei Jun: "Building Cars is Hard, But Success Will Be Cool!"On August 21, Lei Jun, founder and CEO of Xiaomi, publicly revealed the quarterly performance of Xiaomi's automotive division for the first time. Subsequently, the topic "Xiaomi loses over 60,000 yuan per car sold" trended on social media

Xiaomi Car Reports Over 60,000 Yuan Loss per Vehicle, Lei Jun: "Building Cars is Hard, But Success Will Be Cool!"

On August 21, Lei Jun, founder and CEO of Xiaomi, publicly revealed the quarterly performance of Xiaomi's automotive division for the first time. Subsequently, the topic "Xiaomi loses over 60,000 yuan per car sold" trended on social media. Late that night, Lei Jun responded in a post, saying, "Building cars is hard, but success will be cool! Xiaomi cars are still in the investment stage, and we hope for your understanding."

Earlier, Lei Jun had announced Xiaomi's second-quarter financial report: revenue of 88.9 billion yuan, a 32% increase; adjusted net profit of 6.2 billion yuan, a 20.1% growth. The company emphasized its commitment to technology, with R&D spending of 5.5 billion yuan, a 20.7% increase. Regarding innovative businesses like smart cars, Lei Jun highlighted accelerated deliveries, stating that the annual target of 100,000 deliveries is expected to be achieved by November. In the second quarter, 27,307 vehicles were delivered, generating 6.4 billion yuan in revenue and a gross margin of 15.4%. However, the segment also incurred a loss of 1.8 billion yuan, attributed to the high investment stage.

According to Qi Dian News, the innovative business, including intelligent electric vehicles, generated 6.4 billion yuan in revenue, with a total of 27,307 vehicles delivered in the quarter. The segment reported a net loss of 1.8 billion yuan, implying a loss of over 60,000 yuan per vehicle sold.

It is common for automotive businesses to experience losses in the initial phases due to substantial investments in areas like factory construction, technology development, personnel costs, and dealership establishment. Xiaomi's automotive division is currently in a high-investment phase, making the per-vehicle loss expected.

Lei Jun expressed unwavering confidence in the future of Xiaomi's automotive business. He emphasized that car manufacturing is a long-term challenge requiring continuous investment and patience. Xiaomi Cars will continue to prioritize technological innovation and user experience, aiming to deliver premium smart mobility products.

The losses incurred by Xiaomi Cars have sparked concerns within the market regarding the profitability of emerging electric vehicle companies. However, industry insiders believe that losses are common during the initial stages of development for new automotive players, a natural part of the industry's growth cycle. With increasing market size and technological advancements, these companies are expected to gradually transition towards profitability.

The future development of Xiaomi Cars is promising. As Xiaomi continues to invest and expand its presence in the smart automotive sector, the company is expected to achieve profitability and become a significant force in the smart mobility space.

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