Xiaomi Profitability By Segment: Smartphone and SmartEV

Devices. Pixabay Image.

This article presents Xiaomi’s profit margin by segment.

Xiaomi’s segments consist of 2 divisions: Smartphone × AIoT and Smart EV, AI and other new initiatives.

You may find more information about how Xiaomi makes money in these 2 segments here: Smartphone x AIoT and Smart EV, AI and other new initiatives.

Let’s look at the results!

For other statistics of Xiaomi, you may find more information on this page: Xiaomi key stats.

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Definitions

To help readers understand the content better, the following terms and glossaries have been provided.

Smartphone x AIoT:

• Revenues from smartphones are derived from the sale of smartphones.

• Revenues from the IoT and lifestyle products primarily comprise revenues from sales of smart large home appliances, smart TVs, tablets, wearables and other IoT and lifestyle products.

• Revenues from internet services are derived from advertising services and internet value-added services (including online game and fintech business).

• Other related businesses revenues primarily comprise revenue from the hardware repairment services for products, installation services for certain IoT products and sale of materials.

Smart EV, AI & other new initiatives:

• Revenues from this segment are mainly derived from the sale of smart EV and other related businesses, revenues from other new initiatives are immaterial to the Group.

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Insight & Summary of Xiaomi’s Profit Margin By Segment

The following analysis consolidates the trends observed across Xiaomi’s profit margin by segment for the 2023–2025 period.

• Total Gross Profit: Consistent 33% Annual Expansion Xiaomi’s total gross profit grew from ¥57,476M (FY2023) to ¥76,560M (FY2024, +33.2%) and ¥101,806M (FY2025, +33.0%) — a near-doubling in two years at a consistent 33% annual rate. This level of gross profit expansion is exceptional for a business at Xiaomi’s scale and reflects two simultaneous drivers: the steady volume and pricing execution of the Smartphone × AIoT segment, and the explosive gross profit contribution of the Smart EV segment in its first two operating years. The FY2023–FY2025 average total gross profit of ¥78,614M understates the directional momentum — the endpoint of ¥101,806M establishes the segment on a trajectory toward ¥120,000M+ in the near term.

• Smart EV: The Fastest Gross Profit Ramp in Xiaomi’s History The Smart EV, AI and other new initiatives segment recorded zero gross profit contribution in FY2023, ¥6,050M in FY2024, and ¥25,763M in FY2025 — a +325.8% year-over-year expansion in a single fiscal year. This is not merely rapid growth; it represents a structural injection of new earning power into a business model that previously had a single profit engine.

  The segment’s contribution to total gross profit shifted from 0% (FY2023) to 7.9% (FY2024) to 25.3% (FY2025) in just two years. At the current trajectory, Smart EV and related initiatives will represent approximately 35–40% of total gross profit within the next two fiscal years — a fundamental recomposition of the profit base that diversifies Xiaomi’s earnings source away from its smartphone-anchored heritage.

• Smart EV Gross Margin: Exceptional Speed of Profitability The most strategically significant data point in the entire dataset is the Smart EV gross margin trajectory: 18.5% (FY2024) expanding to 24.3% (FY2025). In Xiaomi’s first full year of EV gross margin data (FY2024), the segment was already within 3 percentage points of the established AIoT business (21.2%). In FY2025, Smart EV’s 24.3% margin meaningfully exceeds AIoT’s 21.7% — a crossover that typically takes automotive entrants five to ten years to achieve, if at all.

  For context, Tesla’s automotive gross margin has hovered in the 17–20% range in recent years. Xiaomi achieving 24.3% EV gross margin in year two of commercial production reflects a combination of favourable battery and component procurement at scale, premium model mix (the SU7 Ultra and SU7 Max contributing disproportionately to blended margin), and operating leverage on a rapidly growing revenue base. The 2-period average of 21.4% is already at parity with AIoT’s 21.4% long-run average — a convergence that most investors had not projected on this timeline.

• Smartphone × AIoT: Margin Stability as a Structural Positive The AIoT segment maintained a remarkably stable gross margin of 21.2% in both FY2023 and FY2024, edging to 21.7% in FY2025, for a 3-period average of 21.4%. This stability across a period that included meaningful hardware volume variation (shipments from 145.6M to 168.5M to 165.2M units) confirms that Xiaomi’s blended hardware-software gross margin is now structurally anchored rather than cyclically variable.

  Internet services (running at ~75% gross margin) diluting downward and hardware (~10–22%) diluting upward arrive at a stable ~21% aggregate — a dynamic that should persist unless internet services mix within the segment materially increases. AIoT gross profit grew 22.7% in FY2024 (volume recovery) and 7.8% in FY2025 (maturation), confirming that the AIoT engine is now a steady compounder rather than a high-growth driver — a role that has been handed to Smart EV.

• Structural Takeaway: The shift in gross profit mix from 100% AIoT (FY2023) to 74.7%/25.3% AIoT/EV (FY2025) means Xiaomi now operates two distinct profit engines at comparable margin levels (~21–24%), a configuration that improves overall earnings resilience and reduces single-segment concentration risk. Total gross margin expanded from 21.2% (FY2023) to 22.3% (FY2025), reflecting the positive margin contribution of a rapidly scaling high-margin EV business — the opposite of the margin dilution typically associated with automotive market entry. For the first time, Xiaomi’s blended gross profit trajectory is being positively inflected by a segment that did not exist 18 months prior.

The table below combines all key Xiaomi’s profitability metrics into a single view for the latest three fiscal years.

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Xiaomi’s Gross Profit from Smartphone × AIoT and Smart EV, AI and other new initiatives

You may find more information about how Xiaomi earns its revenue in these two segments here: Smartphone x AIoT and Smart EV, AI and other new initiatives.

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Xiaomi’s Gross Margin from Smartphone × AIoT and Smart EV, AI and other new initiatives

You may find more information about how Xiaomi earns its revenue in these two segments here: Smartphone x AIoT and Smart EV, AI and other new initiatives.

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Credits And References

1. All data presented in this article were obtained and referenced from Xiaomi’s quarterly and annual reports published on the company’s IR: Xiaomi Investor Relations.

2. Pixabay Images.

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Disclosure

We may use artificial intelligence (AI) tools to assist us in writing some of the text in this article. However, the data is directly obtained from original sources (usually the quarterly and annual reports) and meticulously cross-checked by our editors multiple times to ensure its accuracy and reliability.

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