Xiaomi Results Put Its Smartphone and EV Ambitions to the Test

Xiaomi’s push into electric cars and more expensive smartphones is becoming more important to the business, but its latest financial results show that neither is yet fully shielding the company from a weakening handset market and higher costs.

The company published its unaudited interim results for the three and six months ended 30 June on 18 August. Second-quarter revenue was RMB108.9bn, down 6.1% year on year, while adjusted net profit fell 42.6% to RMB6.2bn. Gross profit declined 17.2% to RMB21.6bn and operating profit was down 19.1% at RMB10.9bn.

For the first half of 2026, Xiaomi reported revenue of RMB208.1bn, an 8.4% year-on-year fall, and adjusted net profit of RMB12.3bn, down 42.8%.

Phones still dominate, but shipments have fallen sharply

Smartphone × AIoT remains Xiaomi’s biggest division, contributing RMB84.0bn in the quarter, or 77.1% of group revenue. But that figure was down 11.3% from a year earlier. Its newer Smart EV, AI and other new initiatives division grew 17.1% to RMB24.9bn, accounting for the remaining 22.9%.

The pressure is most apparent in phones. Xiaomi shipped 31.2 million smartphones globally during the quarter, down 26.5% from 42.4 million in the same period in 2025. Smartphone revenue dropped 7.5% to RMB42.1bn.

According to Xiaomi, the decline reflected product-portfolio optimisation, lower shipments of mid-range and low-end handsets, weaker global demand and increased prices for key components including memory.

That strategy has lifted the amount Xiaomi earns per handset. Its smartphone average selling price reached a record RMB1,351, up 25.9% year on year. Xiaomi credited a greater mainland China contribution, changes to its product mix and the overseas launch of the Xiaomi 17T Series in May.

But higher selling prices have not protected handset profitability. Smartphone gross margin fell from 11.5% in the second quarter of 2025 to 8.5% this year, which Xiaomi said was mainly due to higher component costs.

• Xiaomi ranked third globally for smartphone shipments, according to the company’s Omdia data.
• It has remained in the global top three for 24 consecutive quarters, Xiaomi said.
• In Europe, Xiaomi reported a 16.5% shipment share and a third-place ranking.

The UK-facing 17T illustrates the balancing act

The Xiaomi 17T is listed on Xiaomi’s UK website, making it a useful example of the company’s move towards better-equipped devices. The handset has a 6.59-inch 1.5K 120Hz display, a MediaTek Dimensity 8500-Ultra processor, a 6,500mAh typical battery and 67W HyperCharge.

Its Leica-branded triple-camera system includes a 50MP main camera with optical image stabilisation, a 50MP telephoto camera with 5x optical zoom and a 12MP ultra-wide camera. The 17T also has IP68 water and dust resistance and runs Xiaomi HyperOS.

Xiaomi’s UK launch offer for the 17T Series ran from 28 May to 30 June, including a trade-in bonus of up to £100 for the 17T and £150 for the 17T Pro. The official material reviewed does not confirm a standard UK retail price.

The importance of the 17T is not simply its specification sheet. It represents Xiaomi’s attempt to move buyers up the price ladder while reducing dependence on lower-priced phones. The latest results suggest the approach can raise average selling prices, but also expose the company if volumes fall faster than pricing and margins can recover.

Electric vehicles grow, but remain loss-making

Xiaomi’s smart-EV revenue rose 15.9% year on year to RMB23.9bn. Vehicle deliveries increased 28.2% to 104,199, driven mainly by higher deliveries of the Xiaomi YU7 Series, partly offset by lower Xiaomi SU7 Ultra deliveries.

The changing model mix cut the average selling price per vehicle by 9.6% to RMB229,312. Xiaomi said this was primarily because the higher-priced SU7 Ultra made up a smaller share of deliveries.

Its broader Smart EV, AI and other new initiatives division recorded a gross margin of 19.2%, down from 26.4% a year earlier, and an operating loss of RMB2.6bn. Xiaomi cited the lower SU7 Ultra contribution, higher component costs and increased AI-business costs.

There are signs of scale, however. Xiaomi said cumulative Xiaomi SU7 Series deliveries had exceeded 500,000 vehicles as of 17 August. It also said the SU7 Series was the leading pure-electric sedan in China during the first half of 2026 among models priced above RMB200,000.

What comes next

Xiaomi is preparing to broaden its EV range with the SkyNomad N90 Max and N70 Max, the first vehicles based on its Kunlun Technical Architecture. The extended-range SUVs use dual-motor all-wheel drive and a 1.5-litre Kunlun range-extender unit, with a combined CLTC range of up to 1,705km. Xiaomi expects them to launch in September, with pre-sale prices of RMB299,900 for the N90 Max and RMB259,900 for the N70 Max.

Neither UK prices nor UK availability have been confirmed for the SkyNomad models. The SU7 and YU7 are also not currently available in the UK, according to Auto Express.

Alongside phones and cars, Xiaomi is investing heavily in AI and connected devices. It reported RMB9.2bn in second-quarter research and development spending, up 18.9% year on year, plus 1.16 billion connected IoT devices excluding smartphones and tablets. Its next test is whether that expanding ecosystem can turn fast-growing new businesses into sustainable profit while its core smartphone operation regains momentum.