Xiaomi's EV Milestones Fail to Lift Stock as Smartphone Losses and Chip Costs Deepen

Xiaomi's EV unit delivered 30,000 vehicles in May for second month, but core smartphone slump and soaring chip costs drag stock down 30% YTD.

Xiaomi’s electric-vehicle business is hitting fresh delivery records, but the market remains unimpressed. The Chinese tech group saw its stock edge down 1.57% in Thursday trading to EUR 3.11, sitting a mere 2.26% above the year’s low and nursing a 30.84% decline since January. Over the past twelve months, the shares have shed 48.28% of their value.

The EV unit crossed 30,000 units delivered in May for the second month running, bringing the five-month tally to around 140,000 vehicles. Management is sticking to its ambitious 2026 target of 550,000 units, a pace that will require a significant acceleration through the rest of the year. The product mix is broadening: the YU7 SUV series has contributed roughly 232,000 deliveries since its launch ten months ago, and the new YU7 GT variant began rolling out in May, which should help lift average selling prices.

Yet those operational bright spots are being overshadowed by deep trouble in the core smartphone business. The global handset market is forecast to shrink nearly 14% in 2026 to 1.08 billion units, and analysts expect Xiaomi’s own shipments to plunge 28%. Adding to the pain, prices for mobile memory chips are set to surge around 200% in the second quarter, directly hammering margins.

The damage showed up starkly in the first-quarter results. Net profit collapsed 57% year on year to 4.7 billion yuan, while revenue slid 11%. The EV segment alone generated an operating loss of 3.1 billion yuan, equivalent to roughly $5,600 lost on each car delivered. That burn rate is a heavy burden on a company already fighting margin compression in its legacy hardware lines.

To shore up confidence, Xiaomi launched a fresh buyback program on June 2, after shareholders approved repurchases of up to 20 billion Hong Kong dollars. The new mandate covers as much as 10% of outstanding shares, replacing an earlier initiative under which the group had already bought back 14.6 billion Hong Kong dollars’ worth of stock. Just in recent days, the company snapped up nearly 15 million of its own shares on the open market.

The buyback, however, is a costly signal at a time when the EV business demands relentless investment and chip costs are eating into profits. The stock’s technical picture underscores the market’s anxiety: it trades 28.16% below its 200-day moving average, and the annualised 30-day volatility stands at 42.04%.

Analyst views remain sharply divided. Jefferies has a sell recommendation on the stock with a target price of 25.49 Hong Kong dollars, while Goldman Sachs is bullish with a buy rating and a 40 Hong Kong dollar target. Neither side expects a quick resolution.

Xiaomi is trying to fight back with new hardware. In India it launched the Xiaomi 17T smartphone, equipped with a MediaTek Dimensity 8500 Ultra chip and a 6.59-inch AMOLED display, alongside a range of premium Mini LED TVs. Later this year, the company is expected to unveil the 18 Pro Max, rumoured to pack an 8,500 mAh battery and a dual 200-megapixel rear camera. The hope is that premium positioning can offset some of the margin squeeze from rising component costs.

All eyes now turn to the second-quarter earnings release on August 26. Until then, the monthly EV delivery numbers and the trajectory of memory chip prices will determine whether Xiaomi can halt its slide or whether the stock will test new lows.