Sou Hu Cai Jing·2025-11-20 08:14Core Insights - Xiaomi's automotive division achieved significant revenue growth and profitability in Q3 2025, reporting total revenue of 113.12 billion yuan, a year-on-year increase of 22.3%, and an adjusted net profit of 11.31 billion yuan, up 81% [10][11] - However, the company faces a public relations crisis due to a lawsuit regarding false advertising related to its carbon fiber hood, which has led to a loss of consumer trust [1][5] Financial Performance - In Q3 2025, Xiaomi's automotive business delivered 108,796 vehicles, a year-on-year increase of 173.4%, generating revenue of 28.3 billion yuan, which is a 197.9% increase compared to the previous year [10][11] - The gross margin for the automotive segment reached 25.5%, an increase of 8.4 percentage points from the same period last year [10][11] - Xiaomi's R&D investment for the first three quarters of 2025 was 23.5 billion yuan, with a workforce of 24,871 in R&D [14] Legal and Brand Challenges - The controversy began with the launch of the SU7 Ultra, which was marketed with exaggerated claims about its carbon fiber hood's performance, leading to customer dissatisfaction and a lawsuit from over 100 car owners [3][4] - Xiaomi's legal defense strategy, which included statements undermining the credibility of CEO Lei Jun's endorsements, has further damaged the brand's reputation [10][12] - The market reacted negatively to the news of the lawsuit, with Xiaomi's stock price dropping to 38.82 HKD, a decline of 4.81% in a single day, reflecting investor concerns about brand management and consumer trust [11][12] Market Position and Future Outlook - The current situation highlights a common challenge for emerging automotive companies: transitioning from reliance on the founder's personal brand to establishing trust based on product quality and performance [12][14] - To restore consumer confidence, Xiaomi must provide credible product testing data or offer more substantial compensation to affected customers [14] - The company needs to gradually separate its brand identity from Lei Jun's personal image, focusing on product quality, technological strength, and customer service as the foundation for long-term growth [14]