Xiaomi's High-Power EV Push Meets a Low-Power Stock

Xiaomi shares fall over 24% YTD as investor confidence lags behind automotive ambitions. New YU7 GT EV debuts while buybacks fail to stem sell-off amid smartphone margin pressure.

Xiaomi's stock price hit a fresh 52-week low of EUR 3.40 today, extending its year-to-date decline to over 24%. This bearish sentiment persists even as the company showcases its most powerful electric vehicle yet on Germany's famed Nürburgring circuit, highlighting a stark disconnect between its automotive ambitions and investor confidence.

The prototype tearing around the track is the YU7 GT, a premium SUV equipped with a dual-motor setup delivering 738 kW, or 990 horsepower. It features high-performance components like an adaptive air suspension, torque vectoring, and carbon-ceramic brakes, signaling a direct challenge to established European performance brands. This move upmarket is part of a two-pronged vehicle strategy.

Simultaneously, Xiaomi is pushing downmarket to capture volume. A new entry-level variant of the YU7 SUV was registered with China's Ministry of Industry and Information Technology on April 9. This model uses a single 235 kW rear motor and a lithium iron phosphate (LFP) battery from CATL, shaving 115 kilograms off the weight to enable a more aggressive price point for the competitive Chinese market.

Management has attempted to stem the selling pressure through share buybacks. On April 2, the company repurchased approximately 12.8 million of its own Hong Kong-listed shares for about HKD 395 million. A subsequent buyback of 7.9 million shares followed. Such moves are typically seen as a signal that leadership views the stock as undervalued, but the market impact has been negligible so far.

The stock's current price sits roughly 30% below its 200-day moving average, which is at EUR 4.82, underscoring a firmly established downtrend. The daily loss today was 2.16%. While the auto division is showing impressive operational growth—with Q4 2025 revenue surging over 123% to CNY 37.2 billion—broader financial pressures are overshadowing progress.

A significant headwind comes from Xiaomi's core smartphone business, where sharply rising memory chip costs are squeezing margins. These increased component expenses, coupled with heavy ongoing investments in vehicle development, are keeping overall profitability under pressure and the fundamental valuation tense.

For a sustained recovery, investors will be looking to the quarterly results expected in May. The key question will be whether the new vehicle models can help stabilize margins, providing a tangible catalyst to break the stock's persistent downward trend.