Chinese technology giant Xiaomi is preparing to bring its first electric vehicle to Europe by 2027, signaling an ambitious push to compete directly with Tesla and BYD in one of the world’s most competitive mobility markets. The expansion underscores Xiaomi’s shift from its smartphone roots to becoming a serious player in the global electric vehicle sector.
Revenue Growth and EV Momentum
The company’s latest quarterly results showed a 31% revenue increase to 116 billion yuan (approximately $16.2 billion). Much of this growth has been attributed to the strong reception of its second EV, the YU7 SUV, launched in June. Demand has been so robust that customers now face waiting times stretching beyond a year.
In the June quarter alone, Xiaomi delivered 81,302 vehicles, pushing first-half 2025 deliveries past 157,000 units. Losses from the EV division have narrowed to around 300 million yuan, with co-founder Lei Jun reiterating expectations of achieving profitability in the second half of the year.
Smartphones Slow, EVs Accelerate
While its EV division gathers momentum, Xiaomi’s smartphone business remains under pressure. Shipments fell by 2.1% in the last quarter, missing analyst forecasts. Management has guided for modest growth in this segment, with the aim of gradually building market share in China by about one percentage point each year.
Market Value and Investment Push
Xiaomi has added nearly $120 billion in market capitalization over the past 12 months, largely driven by investor optimism around its $10 billion EV investment strategy. This expansion has not been without challenges — the company has had to navigate production bottlenecks and reputational setbacks, including regulatory scrutiny following a fatal accident involving its SU7 sedan earlier this year.
Europe: Opportunity and Challenge
Xiaomi’s entry into Europe aligns with a broader wave of Chinese EV manufacturers targeting the region. With the United States maintaining tariffs on Chinese-made vehicles, Europe has become the next frontier. The continent presents a mix of opportunities — from government support for clean mobility to a receptive consumer base — but also risks tied to price wars, thin margins, and heavy competition.
For Xiaomi, the European launch by 2027 is not just about geography. It represents an inflection point in its identity: evolving from a phone-first brand to a technology conglomerate with ambitions to reshape mobility worldwide.
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