Xiaomi says electric cars and AI now profitable

But the company's president Lu Weibing warned that supply chain pressure linked to rising memory chip prices would weigh on the smartphone market next year.

Xiaomi, which built its name on a wide range of affordable products including smartphones, tablets and home appliances, is a newcomer to the crowded EV field, having released its first model last year.

It also joined the fierce race to develop AI tools in April when it unveiled a generative model created in-house.

"In the third quarter of 2025, our smart EV, AI and other new initiatives segment achieved positive income from operations in a single quarter for the first time" of 700 million yuan ($98 million), Xiaomi said.

Revenue from the sector reached a record high, a company statement said, while total revenue for the July-September quarter came to 113.1 billion yuan, up 22 percent from the same period a year earlier.

Adjusted net profit was up 81 percent on-year to 11.3 billion yuan.

Despite the upbeat quarterly results, Xiaomi's share price has declined more than 20 percent over the past six months.

Analysts say headwinds for the company include demand for AI tech pushing up prices for memory chips used in smartphones and other household tech.

"I believe the pressure will be far greater than this year," Xiaomi's president Lu Weibing said Tuesday about the issue

"Overall, I think everyone will likely observe that retail prices for products will see a significant increase."

Price wars and pessimism over China's economy are also clouding the outlook.

Beijing has been battling sluggish domestic spending since the end of the pandemic, with a prolonged debt crisis in the property sector weighing on consumer sentiment.

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Xiaomi