Xiaomi’s Buyback Blitz Can't Mask a $5,600 Bleed on Every EV Sold

Xiaomi loses $5,600 per EV in Q1, phone sales drop 28% forecast, net profit plunges 57%. Stock down 30% YTD despite HK$20B buyback. Q2 results due Aug 26.

Each time Xiaomi rolls an electric car off the assembly line, it loses roughly $5,600. That stark metric from the first quarter underscores the financial strain of the company’s ambitious push into vehicles, even as its core smartphone business faces a punishing cost spiral. The combination has sent the stock tumbling toward its 52-week low of HK$3.04 (€3.12), with a year-to-date decline of roughly 30%.

The pain is most acute in the handset division, where the global smartphone market is forecast to shrink nearly 14% in 2026 to 1.08 billion units. Xiaomi, heavily reliant on budget models, is expected to suffer a 28% drop in unit sales. Meanwhile, the prices of key components are exploding: mobile DRAM costs are set to surge roughly 200% in the second quarter, and storage-chip procurement prices have already doubled year-over-year. The result was a 57% plunge in net profit to 4.7 billion yuan for the first quarter, while adjusted net profit—which strips out certain items—fell 43% to about 6 billion yuan. Revenue slid 11% in the same period.

The electric-vehicle segment, launched late last year, is a major cash drain, posting an operating loss of 3.1 billion yuan in Q1. Yet management is sticking to its ambitious target of delivering 550,000 vehicles by the end of 2026, undeterred by the mounting red ink.

To arrest the stock’s slide, the company unveiled a HK$20 billion buyback program in early June, covering 12 months. In the first tranche, Xiaomi repurchased 3.5 million shares for about HK$100 million; more recently, it bought nearly 15 million additional shares. The move is designed to limit dilution and signal confidence, but analysts remain deeply split on the outlook. Jefferies rates the stock a sell with a HK$25.49 target, while Goldman Sachs recommends buying with a HK$40 price objective.

Investor sentiment was also rattled by U.S. chip giant Broadcom’s after-hours slide last week, which dragged Asian tech names lower. Xiaomi’s Frankfurt-listed shares now trade at €3.13, more than 27% below their 200-day moving average.

The company is pinning part of its turnaround hopes on a premium smartphone launch expected in September. Leaks suggest the upcoming “18 Pro Max” will pack an 8,500 mAh battery and a dual 200-megapixel camera—a hardware push aimed at clawing back market share and improving margins.

All eyes now turn to August 26, when Xiaomi reports second-quarter results. Until then, the trajectory of memory-chip prices and the monthly EV delivery numbers will likely dictate the stock’s direction. With the buyback providing only a temporary floor, the real test will be whether the core business can deliver a credible stabilization signal.