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our reporter chen yannan reports from beijing

recently, xiaomi group released its second quarter performance announcement. although its revenue reached 88.9 billion yuan and its net profit reached 6.18 billion yuan, which was "the best quarterly report in xiaomi's history", a reporter from china business news learned that xiaomi's automotive business lost 1.8 billion yuan, which once became a hot topic.

data shows that since the launch of xiaomi auto's first model su7 on march 28 this year, the number of orders has continued to grow. in the second quarter, su7 delivered 27,000 new cars and generated revenue of 6.2 billion yuan, accounting for about 6.97% of total revenue. based on this calculation, the average transaction price of xiaomi auto is about 228,600 yuan. the loss is 1.8 billion yuan, and the average loss per car is about 66,000 yuan.

in response to this, lei jun, chairman and ceo of xiaomi technology, gave a response in a live broadcast: "the calculation is both right and wrong. it is true that we lost 1.8 billion yuan in our smart car innovation business. in other words, we invested 1.8 billion yuan. when we reach a certain scale, i believe it will be easy to break even, so there is no need to worry about us." in addition, lei jun said that "xiaomi auto is still in the investment stage" and expressed confidence that it will be able to achieve profitability after the scale expands in the future.

gross profit margin exceeds tesla

xiaomi group's r&d expenses and sales and promotion expenses both increased from the first quarter to 5.5 billion yuan and 5.9 billion yuan respectively, mainly due to the increase in expenses for smart electric vehicle business. xiaomi auto's sales cost was 5.389 billion yuan, accounting for about 6.1% of the total sales cost.

regarding the losses in the smart electric vehicle business, xiaomi group president lu weibing analyzed at the xiaomi auto 2024 mid-term performance conference call that there are two main reasons: first, the scale of xiaomi auto is still relatively small and it is still in the stage of continuous investment; second, xiaomi auto has invested a lot in its first car, and it will take some time to digest these investments. "as xiaomi auto continues to increase its scale in the future, its production capacity continues to be tapped, and its delivery capacity increases, i believe the losses will be further narrowed," lu weibing said.

some industry insiders believe that xiaomi motors' gross profit margin in the second quarter reached 15.4%, which is higher than tesla and most of its chinese peers in the same period. in this regard, lu weibing said: "we have also been looking at the financial reports released by automobile companies recently. we can see that everyone's gross profit is basically contributed by hardware. from this perspective, i think our gross profit margin is at a very good level. in a horizontal comparison with the industry, we are also quite satisfied with the gross profit margin of 15.4%.

"from an internal perspective, we believe that gross profit margin is very important to us, because if we have a reasonable gross profit margin, we can share the expenses by expanding the scale. if we don't have a good gross profit margin, the larger the scale, the greater the loss," he said.

he also believes that the gross profit margin actually reflects several important capabilities of xiaomi. the first is supply chain management. from the first car, our supply chain performance is very good. the second is the factory. we have also done a good job in tapping the potential of the factory. the third is the confidence of the supply chain in us. many suppliers are very optimistic about the future of xiaomi. the quotations and inventory are calculated on a larger scale. because they are optimistic about xiaomi, they release costs for us in advance.

lu weibing believes that the most important factor in the future gross profit trend is scale. so far, our automotive business has passed two tests: one is whether it can sell well after listing, and the other is whether we can have continuous new orders. at present, we think the number of orders in hand is very good, and the new orders are very stable. the current 15.4% is only the initial gross profit margin, and we are confident that it will continue to increase.

generally facing a profit test

the reporter noticed that after xiaomi released its financial report, it was bombarded by the public relations director of jiyue automobile in the circle of friends. the director said in the circle of friends that xiaomi automobile lost 60,000 yuan for each car, and xiaomi and lei jun were selling cars at a loss, which was dumping.

in response, jiyue quickly issued an internal letter to inform the punishment of the incident. jiyue ceo xia yiping said that this statement does not represent the company's views and is not in line with the company's values. at the same time, xia yiping also emphasized that every entrepreneur who rushes to the journey of car manufacturing and every company that strives for the rise of china's new energy vehicles is hard-working and worthy of respect.

an industry insider once said in an interview with a reporter that as an emerging industry, the initial development of smart electric vehicles is often accompanied by high r&d and production costs, and most new energy vehicle companies are facing losses. at the same time, companies generally face the challenges of long investment cycles and high uncertainty in returns.

the reporter noticed that many car companies are currently in a situation where they lose money on every car they sell.

at the huawei hongmeng intelligent driving new product launch conference held on august 26, yu chengdong, huawei's executive director, chairman of the terminal bg, and chairman of the intelligent automotive solutions bu, said that the new m7 pro jointly developed by huawei and seres is very expensive, and the money is spent in invisible places. the price starts at 249,800 yuan. at present, each car sold will lose nearly 30,000 yuan.

on the same day, baic bluepark announced that its operating income in the first half of the year fell by more than 30% year-on-year, and recorded the largest loss in the same period in history, with the cumulative loss in four and a half years reaching 25.161 billion yuan.

at the same time, baic bluepark pointed out in its semi-annual report that in the course of operation in 2024, the internal competition in the industry has led to severe market competition, and the competition in china's new energy vehicle industry has become increasingly fierce. the intensive layout and rapid iteration of competing car companies in the market have formed a diversified market structure, intensifying the competition among car companies. in order to compete for market share, various car companies have adopted price reduction strategies, and market competition has become increasingly fierce.

it is understood that since the beginning of this year, the automobile market has set off rounds of price wars. relevant data show that the total number of models with price cuts in 2023 is 70, but the number of models with price cuts in the first five months of this year has reached 56. according to statistics from the china passenger car association, the sales profit margin of china's automobile industry in 2023 is only 5.7%, which is at a low level in the downstream manufacturing industry.

(editor: zhang shuo, reviewer: tong haihua, proofreader: zhang guogang)