Wen | Sina Technology, Zhang Jun

On August 21, Xiaomi announced its performance for the second quarter of this year.

Overall, Xiaomi exceeded expectations in terms of revenue, net income, and the performance of the smartphone X AIoT division.

Of particular interest is the disclosure of the operational situation of Xiaomi's car business for the first time. Despite delivering impressive volumes and gross margins, the early-stage Xiaomi car business still experienced certain losses, leading to public criticism from a competitor's PR head in the social circle.

Following his response yesterday evening, Lei Jun once again addressed the issue of car losses in today's live broadcast, admitting, "When we reach a certain scale, I believe it will be easy to break even, so everyone don't need to worry for us."

Car business losses? Xiaomi executives respond.

In this financial report, Xiaomi disclosed the financial situation of its automobile business for the first time.

The financial report shows that in the second quarter of 2024, Xiaomi's total revenue from innovative business segments such as smart electric autos was 6.4 billion yuan. The revenue from smart electric autos was 6.2 billion yuan. In the second quarter, Xiaomi delivered 27,307 units of the Xiaomi SU7 series autos, with a net loss of 1.8 billion yuan in innovative businesses such as smart electric autos. The media used this to estimate that Xiaomi's autos are losing more than 0.06 million per vehicle.

Today, a picture circulating on the internet shows Xu Jiyue, the head of PR for Xiaomi, criticizing Lei Jun and Xiaomi for losing money on car sales in his friend circle.

Xu Jiye said, "Entrepreneurs like Lei Jun, can you have a little public morality and shame? Each car loses 0.06 million, why do you sell so many? Some companies lose money because they can't sell without discounting, but what about Xiaomi and Lei Jun? In the past, this was called dumping, which is the worst nature of businessmen."

In fact, regarding the issue of per-vehicle loss exceeding 0.06 million, Lei Jun responded through Weibo on the evening of the 21st, saying, "Building cars is very tough, but success is definitely cool. Xiaomi's autos are still in the investment phase, and I hope everyone understands."

And in today's live broadcast, Lei Jun once again addressed this issue, "I think this calculation is both right and wrong, because Xiaomi's autos are still in the investment phase, just getting started. I think our financial performance is still good. Indeed, in the second quarter, we lost 1.8 billion in innovative businesses such as smart autos. But when we reach a certain scale, I believe it will be easy to break even, so everyone doesn't need to worry for us."

Lei Jun stated that making cars is really not easy; first, it's very difficult, and second, it requires a lot of money. After the financial report was released, it sparked a lot of discussion, some people think it's normal, some people think we're losing a bit too much," I actually think it's fine. I believe it's a very good financial report."

As Lei Jun said, the early-stage Xiaomi automobile business did experience losses, but when you look at the delivery volume and gross margin, there are still many bright spots.

For example, in the second quarter, the gross margin of the smart electric vehicle and other innovative business divisions of Xiaomi was 15.4%. Compared to other new car makers, Xiaomi's performance is quite good. Tesla's automotive gross margin in the second quarter was 13.9%, Xiaopeng's automotive gross margin in the second quarter was 6.4%, Jike's vehicle gross margin in the second quarter was 14.2%, Nio's automotive gross margin in the first quarter was 9.2%, and Ideal's vehicle gross margin in the first quarter was 19.3%.

Xiaomi Group Partner and President Lu Weibing stated on a conference call that the 15.4% gross margin in the first quarter did indeed exceed everyone's expectations. The automotive business has incurred some losses, which also indicates that Xiaomi's automotive business has just begun today and is still in a period of heavy investment.

Want to continue to compete for iPhone business?

In the second quarter, Xiaomi's financial report indeed exceeded expectations.

In terms of revenue and net income, total revenue reached 88.9 billion yuan, a year-on-year increase of 32.0%; net income was 5.1 billion yuan, compared to 3.7 billion yuan in the same period last year; adjusted net income was 6.2 billion yuan, a year-on-year increase of 20.1%.

This marks the fourth consecutive quarter of double-digit year-on-year growth in revenue and net income for Xiaomi.

Starting from this quarter, Xiaomi also divided its performance for the first time into the Smartphone X AIoT division, the smart electric vehicle and other innovative business divisions, to reflect the full ecosystem strategy of People-Device-Home.

From the performance of the Mobile X AIoT division, the second quarter of 2024 was 82.5 billion yuan, a year-on-year increase of 22.5% compared to the second quarter of 2023, which was 67.4 billion yuan. The performance of the Mobile X AIoT division, which includes the sectors of mobile phones, IoT and consumer products, and internet services, also achieved year-on-year growth.

In addition, Lu Weibing also discussed the layout of Xiaomi phones in the high-end market during the conference call.

He said that after the release of the folding phone Xiaomi MIX Flip, about 42% of the users were iPhone users. Apple will also launch a phone with AI capabilities in the second half of this year, but the trend of "Xiaomi grabbing more and more iPhone users" will not change just because of the release of a certain product.

He emphasized that Xiaomi hopes to solidify its position in every higher price segment every year. "If you had asked me this question last year, I might have been a bit anxious about the 6,000 yuan price segment; but this year, I have confidence in the 6,000 to 8,000 yuan price segment. So, next year, Xiaomi's focus will be on the 10,000 yuan segment. In addition, I want to emphasize that the success of Xiaomi cars and the mutual support between Xiaomi phones and Xiaomi cars, I think their effects are just beginning." said Lu Weibing.