this post was submitted on 29 May 2025
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Electric Vehicles
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It's how every manufacturer starts, though. Sell at a loss until you can achieve the volume you need to bring costs down. "strong growth in EV deliveries as losses narrow" means this is exactly what's happening.
Nobody's going to buy your first car for 100 million dollars so that you can be profitable from day 1.
Strawman economics.
You don't recoup the cost of the factory on the first car, but you still recoup the cost of that car. If it contains $30,000 in raw materials - you don't sell it for $20,000. Volume applied to that model means your debt gets worse.
A sane business has to make money on every sale, even if they need a shitload of sales to repay their initial costs.
You write off stuff over a certain time. Development cost, that factory you built, the software you implemented. Depending on how you do your books maybe not the last one. Anything you write off gets spread over the things you make your money with. You develop your car once, but if you sell it a hundred times, the cost of each one goes up by one hundredth of your development cost, whereas if you sell it a million times, the cost of your car only goes up by one millionth of your dev expenses. So your cost per car goes down as your volume goes up.
"Make money with" requires you make money on each sale.
They're losing money on each sale.
This is not complicated.
If I understood the article correctly, they're not actually losing money on each sale though. Their vehicles have a profit margin of 23%. The loss comes from the initial costs of building the factory and tooling to produce these vehicles.
Then the headline is lying.
The several people defending the lie are still completely wrong.
Did you read the article, or are you just complaining about the headline?
"$X per Y" is a very normal way of phrasing things in financial reports. Like, Xiaomi had an earnings per share of $0.15. That doesn't mean that the shares are what earned them that money.
Losing $900 per car is just a shorthand way of saying "Xiaomi Group released its Q1 2025 financial report yesterday. The report shows significant progress in its electric vehicle business, with 75,869 SU7 series vehicles delivered during the quarter. The company announced plans to expand production capacity, with cumulative deliveries of the SU7 series now exceeding 258,000 units. In the first quarter of 2025, Xiaomi’s smart electric vehicle and AI innovation business segment generated total revenue of 18.6 billion yuan (2.58 billion USD). Electric vehicle sales accounted for 18.1 billion yuan(2.51 billion USD), while other related businesses contributed 500 million yuan (70 million USD). The smart electric vehicle and AI segment reported a gross profit margin of 23.2% for the quarter, with an operating loss of 500 million yuan (70 million USD). Based on these figures, Xiaomi’s electric vehicle business posted an average loss of 6,500 yuan (903 USD) per vehicle in Q1 2025, a substantial improvement from 2024 when the company’s EV division recorded a net loss of 6.2 billion yuan (862 million USD) on 136,854 delivered vehicles, representing an average loss of approximately 45,000 yuan (6,250 USD) per unit" which is a bit wordy for a headline.
It's a misleading way of describing what could obviously be said as "they're not selling enough cars yet."
That's a completely different concept from losing money, on every car sold.
And again, some people in this thread are explicitly defending the idea of losing money on every car sold.