On the evening of August 19, Xiaomi released its second quarter and first half results for the period ending June 30, 2025. During the earnings call, Xiaomi Group President Lu Weibing stated: "In the first half of this year, the price war in the home appliance industry has been extremely fierce. There are many industry veterans who indeed pay close attention to us, and they don't hold back when they strike."

However, based on the latest financial report, it appears that the heavy hitter is not the industry "veterans" but rather Xiaomi itself.

Overall, in the second quarter, Xiaomi Group's total revenue reached 116 billion yuan (RMB), up 30.5% year-over-year; adjusted net profit was 10.8 billion yuan, up 75.4% year-over-year, with both metrics hitting record highs.

Breaking down by business segments, the smartphone and AIoT division generated revenue of 94.7 billion yuan, up 14.8% year-over-year. The automotive and AI innovation business division achieved revenue of 21.3 billion yuan, up 233.9% year-over-year.

As Xiaomi's most closely watched business segment, the two flagship models SU7 and YU7 continue to experience supply shortages. Second-quarter revenue increased 230.3% from 6.2 billion yuan in the same period last year to 20.6 billion yuan, with deliveries rising from 27,307 units to 81,302 units, and average selling price increasing from 228,644 yuan to 253,662 yuan.

The automotive business's strong performance not only drove growth across Xiaomi Group but also overshadowed the stagnation in Xiaomi's smartphone business. Last quarter, Xiaomi smartphone revenue declined 2.1% year-over-year from 46.5 billion yuan to 45.5 billion yuan, with average selling price dropping from 1,103.5 yuan to 1,073.2 yuan. Only shipment volume remained stable, rising from 42.2 million units to 42.4 million units.

However, automotive is not the only highlight in Xiaomi's impressive quarterly report. In the second quarter, Xiaomi's smart home appliances revenue increased 66.2% year-over-year, reaching a record high. Specifically, Xiaomi air conditioner shipments exceeded 5.4 million units, up 60% year-over-year; refrigerator shipments surpassed 790,000 units, up over 25% year-over-year; washing machine shipments exceeded 600,000 units, up over 45% year-over-year.

The surge in air conditioning, refrigerator, and washing machine sales has become the main growth driver for the smartphone and AIoT division, representing another growth curve for Xiaomi Group beyond automotive.

Prior to this earnings release, Xiaomi's home appliances had been growing rapidly for several consecutive quarters, making industry giants uneasy, as reflected in some seemingly minor disputes. Regarding Aowei Cloud Network's July online air conditioning market share data, Gree and Xiaomi held different positions, leading to ongoing disagreements.

However, the company feeling the deepest threat from Xiaomi may not be Midea or Gree, but rather Haier Electronics. Haier has long been considered one of the "big three" white goods manufacturers, standing alongside Midea and Gree. But in the air conditioning category where Haier is relatively weak, Xiaomi has quietly caught up.

According to Aowei Cloud Network data, as early as July 2024, Xiaomi surpassed Haier's 11% market share with 12% across all channels, entering the top three. By July this year, Haier regained ground with market share rising to 15%, while Xiaomi retreated to 10%.

Additionally, in online channels, Xiaomi has established a significant advantage. In July this year, Xiaomi captured 13.5% of the online air conditioning market share, while Haier only held 7.26%, and even including sub-brands, it was less than 11%.

Of course, due to Xiaomi's low offline presence, Haier's overall air conditioning business still leads Xiaomi. But as one of the big three, Haier's back-and-forth competition with Xiaomi over the past year reflects the latter's aggressive momentum.

Xiaomi's home appliance layout can be described as comprehensive—covering white goods like air conditioners, refrigerators, and washing machines, as well as black goods primarily focused on televisions. Although the overall scale is still far from the white goods giants and black goods leaders like Hisense and TCL, the high growth rate in the second quarter has put pressure on traditional brands.

As is well known, Xiaomi has long dreamed of connecting "people, cars, and homes." Since 2024, the strong sales of Xiaomi automobiles have driven continuous expansion of offline stores, providing more display space and sales channels for Xiaomi home appliances; combined with the brand enhancement from automotive manufacturing, Xiaomi home appliances can no longer be underestimated.

Correspondingly, as Xiaomi enters the backyard of home appliance giants, collisions with more competitors become inevitable. After "taking on" NIO, Xpeng, and Li Auto, Lei Jun and Xiaomi's next battle requires Zhou Yuanjie and others to be cautious.

In March this year, a photo of Haier CEO Zhou Yuanjie appearing alongside Lei Jun went viral online, unexpectedly gaining widespread attention. Zhou Yuanjie mentioned this incident in his WeChat moments, noting that friends "congratulated me on being made famous by Mr. Lei." Subsequently, he and Haier attempted to capitalize on this traffic wave, quickly opening accounts on platforms like TikTok and conducting live streams, accumulating millions of followers across the internet.

However, the remote interaction between executives does not affect the direct competition between the two companies.

Haier started with refrigerators and washing machines. To this day, Haier's market share in these two businesses remains very stable, particularly in refrigerators, where it claims to hold 45% of the domestic market. But among the "big three white goods" of air conditioners, refrigerators, and washing machines, air conditioners still have the largest market demand.

According to Aowei Cloud Network data, in 2024, total domestic air conditioner sales reached 96.52 million units, while washing machines, refrigerators, and televisions were 42.97 million, 40.19 million, and 30.86 million units respectively, only 1/2 to 1/3 of the total air conditioner volume.

For this reason, Haier began aggressively entering the air conditioning market in the 1980s and achieved top-three industry status. In comparison, Xiaomi didn't begin cooperating with Midea on air conditioners until 2015, launched its first internet air conditioner three years later, and gradually completed its product line in subsequent years to compete directly with the big three.

In the same month that Zhou Yuanjie gained attention through Lei Jun, Lu Weibing stated in the 2024 annual earnings call that last year Xiaomi air conditioner shipments exceeded 6.8 million units, with growth exceeding 50%; refrigerator shipments surpassed 2.7 million units, up over 30%; washing machine shipments exceeded 1.9 million units, with growth exceeding 45%.

Comparing with the just-released Q2 2025 results, Xiaomi's single-quarter air conditioner shipments this year already account for nearly 80% of last year's full-year volume. Of course, summer is the peak season for air conditioner sales, so single-quarter proportions would be higher than other quarters.

Compared to Xiaomi's rapid advancement, Haier's pace appears somewhat sluggish. According to Haier Smart Home's disclosed 2024 annual report, the company's 2024 air conditioning product revenue was approximately 49.1 billion yuan, up 7.4% year-over-year. Among the other two core segments, refrigerators contributed 83.2 billion yuan in revenue and washing machines contributed 63 billion yuan, increasing 2% and 3% respectively compared to the previous year, with growth rates declining significantly from 2023.

In the second quarter of this year, Xiaomi home appliances again achieved high double-digit percentage growth. Haier has not yet disclosed its results; if trends remain flat, Xiaomi will have the opportunity to narrow the gap further.

The takeoff of Xiaomi air conditioners and other home appliances is closely related to Xiaomi automobiles. Lei Jun has long been obsessed with "people, cars, and homes," attempting to connect hardware across different scenarios with a unified software ecosystem. But it wasn't until Xiaomi SU7 went on sale last year, completing the crucial link in "people, cars, and homes," that the entire story became truly credible.

Over the past year-plus, Xiaomi automobile sales have soared, not only elevating the group to a new level but also helping home appliances address shortcomings in sales channels and brand trust.

On one hand, to sell cars, Xiaomi stores have proliferated everywhere. Xiaomi expects that by the end of 2025, domestic offline retail stores will reach the target of 20,000 stores one year ahead of schedule. These stores, in addition to displaying SU7 and YU7, also provide valuable display space and experience scenarios for Xiaomi's air conditioners, refrigerators, and washing machines, completing the crucial link in home appliance consumption.

On the other hand, automotive manufacturing is the crown jewel of technology companies; companies that can produce good cars are typically viewed by consumers as having outstanding R&D and manufacturing capabilities. In Xiaomi's early home appliance ventures, it had to rely on the Mi ecosystem or even major manufacturers for OEM production; now that it manufactures cars, its self-produced home appliances have gained stronger credibility and greater pricing power.

Lu Weibing previously announced the goal of breaking into the top three in the air conditioning industry by 2025 and becoming one of the industry's "big two" by 2030. Now, Xiaomi is already showing such signs.

In the first half of this year, China's home appliance industry experienced price war trends. Lu Weibing stated that Xiaomi still withstood the impact of this price war. "The intelligentization of traditional home appliances is a once-in-a-lifetime opportunity for Xiaomi and represents Xiaomi's advantage."

According to Lu Weibing, 2025 is also the inaugural year for Xiaomi home appliances' overseas expansion. In the first half of this year, Xiaomi's home appliance business entered Southeast Asian markets including Malaysia, Indonesia, and Thailand, as well as European markets. Going forward, Xiaomi will also enter Latin American and African markets.

"Overseas, Xiaomi home appliances have not chosen a low-price strategy, but are comprehensively benchmarking against Japanese and Korean brands like Daikin, Samsung, and LG, focusing on mid-to-high-end products," Lu Weibing said.

Beyond home appliances, Xiaomi automobiles continue their rapid trajectory. In the second quarter of this year, Xiaomi delivered 81,000 vehicles, generating 20.6 billion yuan in revenue. Although Xiaomi SU7 and YU7 have been on sale for some time, they still require approximately 8 months to 1 year for delivery.

From the latest financial report, it's clear that the long wait has not dampened fan enthusiasm. The report shows that as of June 30, Xiaomi had opened 335 automotive sales stores across 92 cities in mainland China.

More remarkably, amid the brutal price war in China's new energy vehicle industry, Xiaomi automobiles' average selling price has risen rather than fallen. According to the financial report, Xiaomi automobiles' average selling price last quarter was 253,700 yuan, compared to 228,600 yuan in the same period last year.

Currently, Xiaomi SU7 starts at 215,900 yuan, YU7 at 253,500 yuan, and SU7 Ultra at 529,900 yuan. The financial report noted that the increase in average selling price benefited from the contribution of SU7 Ultra.

In the August 19 evening earnings call, Lu Weibing stated this is a very high average selling price. In his impression, BBA's average selling price in the Chinese market is basically around 300,000 yuan, indicating that Xiaomi automobiles have actually entered the premium car segment.

In 2027, Xiaomi automobiles will officially enter the European market. However, Xiaomi's pricing power still lags behind Tesla. In the first half of this year, Tesla's average selling price increased from 274,500 yuan in the same period last year to 293,900 yuan.

On another front, Xiaomi automobiles' profitability has improved significantly. The financial report disclosed that in the second quarter, the gross profit margin of Xiaomi's automotive and AI innovation business division rose from 15.4% in Q2 2024 to 26.4% in Q2 2025, mainly due to reduced core component costs, lower unit manufacturing costs, SU7 Ultra deliveries, and improved margins in other related businesses.

Lu Weibing expressed confidence in completing the full-year delivery target of 350,000 Xiaomi automobiles. In the second quarter of this year, operating losses for Xiaomi's automotive and AI innovation business significantly narrowed to 300 million yuan, with hopes of achieving single-quarter profitability in the second half.

Lu Weibing also stated that from 2022 to the first half of 2025, Xiaomi invested over 30 billion yuan in automotive and other innovation businesses, so cumulatively, new businesses still show substantial losses.

Additionally, Xiaomi does not participate in automotive price wars or internal competition; Xiaomi automobiles' important task is to deliver car products.

But holding hundreds of thousands of locked-in orders, Xiaomi cannot afford to coast for an entire year. How to rapidly scale up production capacity has become Xiaomi automobiles' top priority for a considerable period ahead.

Currently, all Xiaomi vehicles are produced at the Beijing Yizhuang factory. Just before YU7's launch, Xiaomi spent over 600 million yuan to acquire an industrial land plot of less than 500,000 square meters adjacent to the phase-two factory. The market widely believes this land will be used to build Xiaomi's phase-three factory.

Moreover, from late last year to now, Xiaomi has frequently been reported recruiting automotive manufacturing talent in Wuhan and Shanghai, possibly heralding factory construction in these two cities.

Citi previously predicted in a report that without production capacity constraints, YU7's mature monthly sales could reach 60,000-80,000 units. Current Xiaomi clearly has a long way to go to reach this state.

Compared to automobiles and home appliances, Xiaomi's presence in the AI field remains low, and last quarter seemed to show little change.

The Xiaomi AI glasses released in June this year were among the few AI products mentioned in Xiaomi's financial report. Additionally, the report mentioned that the company utilized AI to empower the YU7 series' intelligent cockpit, with exterior Xiao Ai voice, multimodal interaction capabilities, and voice vehicle control receiving positive feedback.

The financial report also mentioned the open-source multimodal large model Xiaomi MiMo-VL-7B and open-source language model Xiaomi MiMo-7B released in May this year, with brief introductions to Xiaomi's achievements in large model research.

Beyond this, Xiaomi devoted little attention to AI large models. This contrasts sharply with the first-quarter financial report released in May this year. In that report, Xiaomi announced renaming its smart electric vehicle innovation business segment to the smart electric vehicle and AI innovation business segment, essentially placing AI alongside automobiles as separate priorities.

In the first-quarter report, Xiaomi rarely expressed its position, stating "We continue to drive foundational large language model research." In the subsequent earnings call, Lu Weibing even opened by mentioning AI large models, calling artificial intelligence and chips "two very important sub-strategies for Xiaomi."

But in the second quarter, Xiaomi made no similar statements, and Lu Weibing and other executives shifted focus to automobiles and home appliances.

Xiaomi's decision not to continue aggressively pursuing AI large models last quarter is not difficult to understand. Over the past few months, Xiaomi's most important task has been YU7's launch and deliveries, while also handling the aftermath of the autonomous driving fatality; additionally, the second quarter coincided with peak air conditioning sales season, a critical period for Xiaomi home appliances to boost sales volume. Its energy and resources could not be too dispersed.

In comparison, AI large models require enormous investment with unclear returns. Although senior management repeatedly emphasized them, they clearly rank behind automobiles, smartphones, and smart home appliances.

Actually, Xiaomi's AI development naturally has smartphones as an entry point. But users have already become accustomed to apps like Doubao, DeepSeek, and ChatGPT, and even Apple cannot replace third-party AI services with Apple Intelligence. Domestic Android manufacturers have even weaker control over system ecosystems and cannot achieve Apple's unfinished ambitions.

Temporarily setting AI aside is also a reasonable choice.

In the second quarter, with automotive support, Xiaomi's "hardware king" status became unprecedentedly strong. The automotive business's driving effect on home appliances and other businesses has also shown amazing potential. Xiaomi home appliances' comprehensive coverage and dual-wing flight have made it one of the major players in China's home appliance market.

But this financial report reflects more of the fruits Xiaomi has already harvested rather than orchards it is entering. As automotive, home appliance, and other businesses develop, Xiaomi is gradually penetrating unfamiliar territories crowded with competitors, needing to fight multiple unfamiliar battles in unfamiliar fields.

As Lu Weibing noted, the heavy punches from industry "veterans" that Xiaomi faces will likely become increasingly frequent and fierce.