Xiaomi's 304 km/ h EV and 50% Profit Hit: A Stock Market Paradox

Xiaomi shares near 52-week low amid profit warning and slow EV deliveries; EREV sub-brand Skynomad approved, but market headwinds loom.

The gap between Xiaomi's technological feats and its stock-market performance has rarely been wider. While a prototype SUV scorched the test track at 304 km/h earlier this month, the company's shares have slid to within a hair's breadth of their 52-week low, weighed down by a looming profit warning and delivery numbers that fall well short of an ambitious annual target.

Goldman Sachs expects Xiaomi's adjusted net profit for the second quarter — due in August — to plunge by as much as 50% year-on-year. The drag comes from a surge in spending: research and development outlays jumped 33% in the first quarter to 9 billion yuan as the company pours capital into its electric-vehicle push. Returns from that investment remain uncertain, and the market is pricing in the risk.

The stock closed at €2.89, just 2.5% above its trough of June 11. Year-to-date the equity has lost nearly 36% of its value and more than half from its 12-month high of €6.69. The relative strength index sits at 32, deep in oversold territory but still flashing no clear buy signal. A share buyback of 7.8 million shares, part of a programme worth up to HK$20 billion, has so far failed to steady the price.

Xiaomi's immediate challenge is delivery velocity. The company targets 550,000 vehicle deliveries in 2026 — a 34% increase on last year's 410,000. Yet from January through May it handed over just 150,317 units, growth of only 13.5% year-on-year. May's tally of 32,759 vehicles was 17% above the same month last year but 10.7% lower than in April. To hit the annual goal, the monthly run-rate must accelerate sharply in the second half.

The main lever to drive that acceleration is a long-awaited expansion into extended-range electric vehicles. China's Ministry of Industry and Information Technology has granted preliminary approval to Xiaomi's auto unit to produce EVs with range extenders, a technology the company had previously publicly dismissed. The comment period ends on June 17, after which final confirmation is expected. To protect the sporty image of existing models such as the SU7 and YU7, Xiaomi plans a dedicated sub-brand called Skynomad for the family-oriented EREV line.

The first Skynomad model, internally codenamed Kunlun N3, is a SUV measuring more than 5.3 metres in length. It will pack a battery of over 70 kWh, delivering a pure-electric range of 400 to 500 kilometres, and is scheduled to reach the market in the second half of 2026. The timing, however, is tricky: wholesale sales of EREVs in China tumbled nearly 25% in May, the steepest monthly drop in five years. Market leader Li Auto saw deliveries of its flagship L9 fall 74% year-on-year in the first four months of 2026.

Alongside the EREV bet, Xiaomi is pressing ahead with two other technology plays. An in-house chip, the XRING O3 built on TSMC's 3-nanometre process, is due for release in August 2026 and is expected to eventually find its way into vehicles. Separately, the company plans a robotic charging arm for private households in the fourth quarter of 2026 — a system that plugs and unplugs the cable autonomously.

The company has taken steps to demonstrate technical readiness on the road. On June 14, Xiaomi live-tested its new SUVs in Yancheng: the YU7 GT hit 304 km/h, the standard YU7 reached 220 km/h, and the vehicles performed 50 consecutive emergency stops with braking distances between 32 and 36 metres. The carbon-ceramic brake system, capable of operating at temperatures up to 1,300 °C, is the same as used on the SU7 Ultra.

Whether these engineering milestones translate into stock-price support depends entirely on whether Xiaomi can narrow the gap between its annual delivery target and the current pace of 150,000 units in five months. With two EREV launches planned before year-end and the Skynomad brand taking shape, the second half will determine whether this is a turnaround story or a continued slide.