A phone maker bets $10 billion on cars
In March 2021, Xiaomi founder Lei Jun committed $10 billion to building electric cars. Xiaomi made phones. It had no car factory, no license to build cars and no car team.
Apple had made the same bet. Its car project spent about $10 billion over ten years and was cancelled on February 27, 2024. Xiaomi’s SU7 went on sale 30 days later.
From no factory to 600,000 cars
Xiaomi built its plant in about 14 months. Lei Jun handed the first cars to their owners himself.
- Mar 2021Lei Jun commits $10 billion to cars.
- Apr 2022Work starts on the plant in Yizhuang, Beijing.
- Dec 2023Xiaomi shows the SU7 sedan.
- Mar 2024The SU7 goes on sale and takes 88,898 paid orders in 24 hours.
- Dec 2024135,000 cars delivered in nine months.
- Jun 2025The YU7 SUV goes on sale.
- Feb 2026600,000 cars delivered in total.
Demand outran the factory
The YU7 SUV took about 289,000 orders in its first hour. Delivery waits grew to as long as 62 weeks.
In lean terms this is mura (unevenness): a spike no line can absorb, turned into a year of waiting. Xiaomi added capacity rather than raising prices.
What the car plant does
Xiaomi says its Beijing plant builds a car every 76 seconds. No one outside the company has checked that figure.
Xiaomi’s famous dark factory, which runs with the lights off, is a phone plant, not the car plant. The car plant is about 91% automated, and to keep up with the YU7 it added workers on 11-hour double shifts.
One casting in place of 72 parts
A 9,100-ton press casts the rear of the car’s floor in one piece. Xiaomi says this replaces 72 parts and about 840 welds.
The catch: a one-piece casting is expensive to repair after a crash. Chinese insurers charge SU7 owners about what they charge for a ¥500,000 gas car.
Selling a car like a phone
The SU7 launched about ¥30,000 under the Tesla Model 3. It links to Xiaomi’s phones and home devices, a plan Xiaomi calls its human, car and home ecosystem (人车家全生态, rén chē jiā quán shēngtài). The 1,548-hp SU7 Ultra exists to set lap records and build the brand.
In 2025 the SU7 outsold the Model 3 in China. The YU7 did worse. It sold fewer cars than the Model Y in 8 of its first 10 months, and in May 2026 Xiaomi cut its price by ¥20,000.
The cost of moving fast
On March 29, 2025, an SU7 using assisted driving hit a highway barrier. Three university students died. China then cracked down on how carmakers advertise smart driving (智驾, zhìjià), and Xiaomi recalled 116,887 SU7s, about a third of all SU7s sold.
In October 2025, an SU7 caught fire after a crash in Chengdu, and its electric door handles failed. The fire was fatal. Lei Jun called 2025 the hardest period since Xiaomi was founded.
Profit came fast, then slipped
The car business made its first operating profit in the third quarter of 2025, about 18 months after its first delivery. NIO, a Chinese EV startup, took 11 years to reach its first quarterly profit. In early 2026, Xiaomi’s car business slipped back into a loss.
- 2024Lost about ¥45,000 per car.
- Q3 2025First operating profit, about ¥6,434 per car.
- 2025¥106.1 billion in revenue at a 24.3% gross margin.
- Q1 2026Back to a ¥3.1 billion loss.
The lesson
Xiaomi did not invent a new way to build cars. It brought a phone maker’s pace to a real car plant. That pace gave it the fast ramp, and also the crash, the recall and the long waits. Study the speed and the cost together.