Xiaomi Reports Q2 2026 Results Amid EV and AI Growth
Xiaomi released its financial results for the second quarter of 2026, revealing a complex transition period characterized by a 6.1 percent annual decline in revenue to 108.9 billion yuan and a 42.6 percent drop in adjusted net profit to 6.2 billion yuan. Despite these financial pressures caused by rising semiconductor and memory costs, the company continues to prioritize its strategic pivot toward electric vehicle manufacturing and artificial intelligence. By shifting focus from low-end hardware to premium market segments, Xiaomi is actively reshaping its business structure to navigate global economic volatility while maintaining its status as a top-tier technology provider.
- Xiaomi achieved a record average selling price for smartphones by prioritizing higher-end model shipments.
- The automotive division delivered 104,000 electric vehicles during the second quarter.
- The company successfully integrated the MiMo large language model into its core ecosystem.
Smartphone Profit Margins Face Significant Cost Pressures
The global smartphone market remains a core pillar for Xiaomi, with 31.2 million units shipped during this quarter. Management has consciously reduced the volume of lower-end devices to emphasize premium products, resulting in a 25.9 percent increase in the average selling price to 1,351 yuan. In the Chinese market, devices priced above 3,000 yuan now account for 32.1 percent of total sales.
However, soaring costs for essential memory and storage components have compressed the gross profit margin of the smartphone segment from 11.5 percent to 8.5 percent.
The company maintains that it is prioritizing long-term profitability over mere shipment volume. Meanwhile, the IoT and consumer electronics segment reported revenue of 31.3 billion yuan, impacted by the conclusion of domestic appliance subsidies in China. Despite this, the AIoT platform has reached 1.16 billion active devices, highlighting the continued expansion of the Xiaomi ecosystem.
Electric Vehicle Deliveries Reach New Milestones
Xiaomi’s automotive segment is rapidly gaining scale, delivering 104,000 electric vehicles in the second quarter, marking a 28.2 percent year-over-year increase. This growth generated 23.9 billion yuan in revenue, bringing the total for the first seven months of the year to 216,000 units. The company remains committed to its ambitious goal of 550,000 deliveries by the end of 2026.
The innovative business segment recorded a 2.6 billion yuan operating loss, though this figure represents a recovery from the 3.1 billion yuan loss reported in the first quarter.
Looking ahead, Xiaomi plans to launch its new Pengcheng N90 MAX and N70 MAX SUV models in September. These vehicles, built on the Kunlun architecture, are designed to attract family-oriented consumers. Furthermore, the company has scheduled its official entry into international automotive markets for the second half of 2027.
AI Capabilities Drive Future Ecosystem Integration
The company has officially introduced the MiMo large language model, which is already generating revenue through API calls and corporate token solutions. This model is deeply embedded within the HyperOS, Super Xiao Ai, and Mi Home platforms, strengthening the unified “Human x Car x Home” experience. Additionally, Xiaomi is testing advanced 1.7-meter-tall humanoid robots in its own manufacturing facilities to improve assembly line efficiency. These strategic investments ensure that Xiaomi remains at the forefront of technological innovation despite immediate fiscal headwinds.
Given Xiaomi’s aggressive expansion into the electric vehicle and robotics markets, do you believe their transition from a phone manufacturer to a holistic tech giant will succeed? Share your thoughts in the comments below.
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