In a remarkable turnaround, Xiaomi has reported record-breaking revenue for the first half of 2025, driven by its aggressive expansion into electric vehicles (EVs) and semiconductor chips. The Chinese tech giant, traditionally known for its smartphones and smart devices, has successfully diversified its business, proving its ability to compete in high-growth industries.
Xiaomi’s Financial Milestone in 2025
According to Xiaomi’s Q2 2025 earnings report, the company’s revenue surged to $12.5 billion, marking a 32% year-over-year increase. This growth was largely fueled by its EV division, which contributed $3.2 billion, and its semiconductor business, adding another $1.8 billion in revenue. Analysts from Counterpoint Research note that Xiaomi’s strategic investments in these sectors have positioned it as a major player beyond consumer electronics.
The Rise of Xiaomi’s Electric Vehicle Business
Xiaomi entered the EV market in late 2023 with its SU7 sedan, a competitively priced electric car designed to rival Tesla’s Model 3. By mid-2025, Xiaomi had sold over 120,000 units, capturing 5% of China’s EV market, as reported by Canalys. The company’s success stems from its strong brand loyalty and competitive pricing strategy, with the SU7 starting at $29,800—nearly 20% cheaper than Tesla’s equivalent model.
Industry experts attribute Xiaomi’s rapid EV adoption to its seamless integration with its ecosystem. The SU7 features deep compatibility with Xiaomi’s smartphones, IoT devices, and AI assistants, creating a unified user experience.
Breakthroughs in Semiconductor Development
Beyond EVs, Xiaomi has made significant strides in semiconductor design and production. Its Surge P2 and C2 chips, used in smartphones and EVs, have gained traction due to their energy efficiency and AI capabilities. A 2025 TechInsights report revealed that Xiaomi’s in-house chips now power 30% of its flagship devices, reducing reliance on foreign suppliers like Qualcomm.
The company has also partnered with SMIC (Semiconductor Manufacturing International Corp.) to produce 5nm chips by late 2025, a move that could further strengthen its supply chain independence.
Challenges and Competition
Despite its success, Xiaomi faces stiff competition in both the EV and semiconductor sectors. In China’s crowded EV market, rivals like BYD and NIO continue to dominate, while global chipmakers such as TSMC and Samsung maintain technological advantages. Additionally, U.S. export restrictions on advanced chip technology pose long-term risks to Xiaomi’s semiconductor ambitions.
Future Outlook
Xiaomi’s CEO, Lei Jun, has announced plans to double EV production by 2026 and expand chip manufacturing for third-party buyers. If successful, Xiaomi could emerge as a fully integrated tech and automotive powerhouse, rivaling giants like Apple and Huawei.
With EVs and chips contributing nearly 40% of total revenue, Xiaomi’s bold diversification strategy has clearly paid off—setting the stage for even greater growth in the coming years.