Everyone talks about how cheap Chinese EVs are.
Rightly so.
But nobody talks about the blood loss.
Almost every maker selling these cars is losing money on the unit level, just to keep the lights on and the data flowing.
Now Xiaomi is top of the chart for losing money fast.
The math doesn’t add up yet
You know the company.
The “Apple of China.”
A few years back they decided smartphones weren’t enough and built a smart EV and AI division.
It worked, in terms of hype.
They sell two cars right now. The SU7 sedan. Critical darling.
And the YU7 SUV.
People are buying them in droves.
Look at Q1 alone.
Xiaomi moved 80,806 vehicles. That’s a lot of metal.
Xiaomi’s 990 hp Family SUV costs less than a base Macan EV while outrunning the turbocharged version. A bargain if you ignore the ledger.
Revenue? 19.9 billion yen.
Or about $2.9 billion.
Sounds great, until you see the operating loss.
3.1 billion yen.
That translates to roughly $457 million down the drain.
Divide that by the cars sold.
The loss per vehicle is approximately $5,600.
Not $560.
Five thousand. Six hundred.
This is worse than before.
Significantly worse.
Last year during the first three months? They sold 75,689 units.
Slightly lower volume this quarter.
But back then, the loss was tiny.
About $900 a pop.
The financial situation isn’t stabilizing. It’s spiraling.
Chasing high margins
Why the shift?
Prices are dropping or competition is forcing discounts.
The average transaction price for a Xiaomi car right now sits around 235,00 Yuan.
Convert that, you get $34,60 roughly.
It’s hard to build profit at that number with these production scales.
The fix is simple but hard to execute.
Sell more expensive cars.
Shift the average transaction price upward.
Enter the new high-margin toys.
The 990 hp YU GT.
Stops at 38,9,00 Yuan ($57,0).
Then the SU7 Ultra.
The “hypercar” bane of existences.
Starts at 299,0 Yuan, a little over $00000.
These aren’t volume drivers.
You won’t see thousands of Ultras rolling out every week.
But every single one sold drags that average price up.
Every one helps dilute the loss from the cheap ones.
April was a decent month though.
3,02 vehicles delivered.
That beats February (2,041) and March (2,440) significantly.
But don’t get too excited.
They still haven’t matched December.
Back in Dec, they hit a peak of 21 units.
A distant memory.
Sales are bouncing back, slowly, unevenly.
The burn rate, however, is not bouncing. It’s accelerating.
