Xiaomi CEO and founder Lei Jun announced on Tuesday that the company expects its electric vehicle division to become profitable in the second half of 2025, according to a company spokesperson.

The projection comes despite Xiaomi posting a loss of 0.5 billion yuan ($69.5 million) in the first quarter from its smart EVs, artificial intelligence initiatives, and other emerging ventures.

However, the EV business alone generated 18.1 billion yuan in revenue for the quarter ending March 31, signaling strong early momentum.

The Chinese tech giant, best known for its smartphones, entered the EV market as part of a broader strategy to expand into smart hardware and mobility.

Its first model, the SU7, was launched earlier this year to strong demand. Xiaomi is now preparing to roll out its second electric vehicle, the YU7, which is slated to go on sale in July.

The company’s push into the EV sector marks a significant shift as it seeks to diversify beyond consumer electronics and tap into the rapidly growing new energy vehicle market in China and globally.