Xiaomi Bets on Extended-Range EVs for 2026 as Market Reacts to Conservative Target

Xiaomi kicked off the year with a clearly stated objective for its electric-vehicle unit: deliver 550,000 EVs in 2026, a 34% year-on-year increase. Yet the initial market reaction was muted, with the shares slipping 2.53% to 39.26 HKD after the guidance was published. Analysts in particular expected a higher target, with Citi labeling the goal “conservative” and modeling 600,000 to 700,000 vehicles instead.

Lei Jun, Xiaomi’s chief executive, unveiled the figures during a Saturday livestream. The company’s latest-year results and targets include several notable milestones:

• In 2025, a total of 410,000 vehicles were delivered, comfortably exceeding the revised goal of 350,000.
• December deliveries reached 50,000, marking a new monthly record.
• The EV division reached profitability in November 2025, only 18 months after its market debut.

Four new models are slated for 2026, alongside a substantial research-and-development push amounting to 200 billion yuan over the next five years. The product lineup will feature an updated version of the SU7, a so-called “Executive Edition,” and two SUVs equipped with range extenders, available as a five- or seven-seater. The company intends to pursue technology independence, including the development of its own 3-nanometer chip, tentatively named the Xring O1.

To address safety concerns, Lei Jun participated in a multi-hour “live teardown” of the YU7 SUV, demonstrating the use of 2,400 MPa ultra-high-strength steel.

Strategic focus: Extended-range models aimed at Li Auto’s stronghold

The new extended-range SUVs will contest a segment currently dominated by competitors such as Li Auto. Xiaomi aims to leverage the profitability of its smartphone business to support its automotive venture, while emerging profitability in the car unit reduces that dependency.

International expansion is also advancing. The company is deepening cooperation with Alibaba’s AliExpress to streamline logistics and marketing for Europe, as Xiaomi expands the reach of its automotive division globally starting in 2027.

Analyst view remains cautiously optimistic

Citigroup continues to rate the shares as a Buy despite the conservative guidance. The target price stands at 50 HKD, implying roughly 27% potential upside from current levels. Analysts expect that actual production could exceed 600,000 units, enabling corresponding deliveries.

A key question for investors is whether Xiaomi will pursue a “Beat and Raise” strategy—gradually lifting guidance in subsequent quarters—or whether the company can sustain and escalate its forecasts. The gross margin in the EV segment remains the critical determinant of long-term profitability; with scale effects, margins could improve meaningfully. The rollout of Extended-Range models in the first half of the year will also indicate whether Xiaomi can gain traction in the competitive SUV market.