Xiaomi’s 2026 Strategy: Aggressive EV Targets and Major R&D Push

Xiaomi KYG9830T1067

Xiaomi is charting a far more assertive course for 2026 than many analysts anticipated. The Chinese technology conglomerate is raising its electric vehicle delivery targets, launching a massive research and development initiative, and simultaneously supporting its share price through buybacks and substantial capital inflows from mainland China. This multi-pronged strategy intensifies competitive pressures within the country's crowded EV sector.

The company's confidence is underscored by concrete financial actions. On January 8, Xiaomi repurchased 5 million B-shares on the Hong Kong Stock Exchange. The transaction was valued at approximately HKD 190.6 million, with prices ranging between HKD 38.04 and HKD 38.16 per share. Since the inception of the current program, a total of 162 million shares have been bought back, representing about 0.63% of the outstanding share capital.

Despite a minor share price decline of 0.42% to HKD 38.00 that same day, capital flow data reveals strong underlying support. Net inflows via the Northbound Stock Connect channel reached HKD 1.071 billion, marking the sixth consecutive trading session of net purchases. Cumulatively, these inflows now exceed HKD 4.68 billion.

A single negative block trade of 6.5 million shares at HKD 38.02, totaling roughly HKD 247 million, indicated some profit-taking by a major investor. However, the impact was more than offset by the ongoing buyback scheme and consistent mainland investor demand, solidifying the HKD 38.00 level as a technical support zone.

Ambitious Expansion in Electric Vehicles

Central to Xiaomi's aggressive posture are its revised automotive ambitions. CEO Lei Jun recently provided specific guidance, targeting the delivery of 550,000 electric vehicles in 2026. This goal builds on a strong 2025 performance, where volumes surpassed 410,000 units, dramatically exceeding the original target of 300,000.

Notably, the EV division itself crossed into profitability during the third quarter of 2025. This operational milestone provides the financial foundation for the company's broader technological offensive.

A Five-Year, RMB 200 Billion R&D Commitment

Parallel to its automotive push, Xiaomi's management has unveiled a sweeping RMB 200 billion investment plan for research and development over the next five years. The focus will be on the integration of proprietary chips, operating systems, and AI models by the end of 2026. This represents a significant acceleration in spending; in the previous five-year period, the company invested approximately RMB 105 billion in R&D.

The SU7 Facelift: A Crucial Near-Term Catalyst

Operationally, Xiaomi is entering the new year with the refreshed version of its SU7 sedan. Pre-orders for the updated model began in January, with a market launch scheduled for April 2026. The starting price is set at RMB 229,900.

The facelift introduces enhanced safety features, including a standard LiDAR sensor and Hyper Autonomous Driving system, alongside new powertrain options featuring the V6s-Plus motor. This positions the model to compete directly with rivals like Tesla and BYD. Analysts at Daiwa, including Kelvin Lau, anticipate robust order intake for the updated SU7, a view supported by the recent capital inflows.

The initial sales performance of the SU7 facelift from April onward will be a critical test of whether the company can realistically achieve its ambitious 550,000-vehicle forecast for the full year.

Strategic Context and Industry Positioning

Xiaomi's repeated upward revisions and subsequent outperformance of its initial 2025 EV targets demonstrate that market demand has exceeded internal projections. The company is leveraging the strong momentum of its domestic market to capture additional share.

This aggressive stance contrasts with developments elsewhere. Several U.S. automakers, such as General Motors and Ford, are notably scaling back their EV programs amid fading subsidies and softening demand in the United States. GM, for instance, announced a USD 6 billion impairment charge on January 8.

Outlook and Key Monitoring Points

Multiple factors are currently providing tailwinds for Xiaomi's equity: the sharply raised delivery target, a now-profitable EV unit, a substantial R&D blueprint, and the combined effect of share repurchases and strong Northbound inflows.

Looking ahead, two developments will be paramount. First, the actual sales trajectory of the SU7 facelift starting in April. Second, the progress in integrating its own chips and AI models by late 2026. Success on both fronts will determine if Xiaomi can translate its intended scale in the EV business into sustainably higher margins.