Xiaomi’s EV Triumph in April Masks a Deepening Smartphone Crisis — Can May 26 Earnings Bridge the Gap?

Xiaomi's April EV deliveries surpassed Tesla in China, but smartphone shipments fell 35% YoY, dragging stock 25% YTD. Quarterly report due May 26; aggressive buybacks signal management confidence.

Xiaomi is living two lives. In one, it out-delivered Tesla in China last month and is now among the country’s five largest carmakers. In the other, its stock is trading nearly 50% below its 52-week peak and has lost a quarter of its value since the start of the year. The gap between the electric-vehicle success story and the smartphone slump has rarely been wider — and all eyes are now on the quarterly report due May 26.

April EV shipments beat Tesla in China

The automaking division delivered 36,702 vehicles in April — 26,826 of the SU7 sedan and 9,800 of the newer YU7 SUV. That tally pushed Xiaomi past Tesla in monthly Chinese deliveries and cemented its place among the country’s top five new-energy vehicle producers. For the second half of 2026, management has set a profitability target for the EV unit, a milestone that would mark a significant transition for a business still burning cash.

To get there, Xiaomi is broadening its lineup. Planned additions include a base YU7 with standard range, a large range-extender SUV called the YU9, and a long-wheelbase version of the SU7. The company is also developing its own automotive chip and has earmarked 35 billion yuan for autonomous-driving research, aiming to cut reliance on outside suppliers. Later this month, the YU7 GT will hit the Chinese market — a move that comes after Porsche snatched a Nürburgring record from Xiaomi, adding urgency to the launch.

Smartphone business goes into reverse

While the EV side accelerates, the core hardware business is in a slide. Smartphone chip costs have tripled since early 2025 — LPDDR5 memory prices have surged — and that squeeze has been brutal for a company where more than half of its customer base shops in the sub-$200 bracket. Price increases are unavoidable, but they are crushing volume.

During the first quarter of 2026, Xiaomi’s domestic handset shipments in China fell 35% year-on-year to 8.7 million units, dropping the company to fifth place in the market. Tablet shipments followed a similar pattern, sliding roughly 14% to 2.6 million devices. Goldman Sachs analysts responded by trimming revenue forecasts for 2026 through 2028 by 1% to 4%, and they project a 12% year-over-year revenue decline for the first quarter. Yet the bank still rates the stock a Buy — a sign that the long-term bet on EVs and ecosystem expansion remains intact.

Buybacks ramp up as the stock slides

In a direct counter to market skepticism, Xiaomi has been aggressively buying back its own shares. As of early May, the company had spent about 4.7 billion Hong Kong dollars on repurchases since the start of the year — a notable acceleration from the 6.3 billion HKD it deployed in all of 2025. One recent tranche alone cost 100 million HKD, and an automatic buyback plan worth another 2.5 billion HKD is already in place. The management team is signaling conviction that the current valuation is too low.

Right now, the stock trades at roughly 3.45 euros, about 23% below its level at the start of the year and almost 50% below the 52-week high of 6.69 euros. The session described in one filing logged a 3.43-euro close with a minor daily loss. The distance to the 200-day moving average is a steep 24.5%, though the Relative Strength Index sits around 54 — a neutral reading that suggests no immediate oversold bounce or exhaustion. Over the past seven days, the shares have clawed back roughly 3%, hovering just above the 52-week trough touched in early May.

What the May 26 numbers must show

The board meeting later this month will reveal whether premium-segment margins in the smartphone business can offset the damage done by the entry-level slump. At the same time, investors will look for concrete evidence that the EV division’s growth is accelerating fast enough to fill the hole left by the hardware slowdown. With the YU7 GT launch arriving alongside the earnings release, Xiaomi is giving itself a chance to refocus the narrative — but the profitability target for the second half of 2026 will be the real test of whether its two-speed strategy can actually generate sustainable returns.