Xiaomi's Hybrid SUV Bet Awaits Regulatory Nod as Delivery Shortfalls and Profit Squeeze Hit the Stock

Xiaomi's electric vehicle division loses $5,600 per car as shares fall 35% this year; CEO targets 550,000 deliveries in 2026 despite slow start and volatile sales.

Xiaomi is pressing ahead with its electric vehicle ambitions at a moment when the market is punishing its shares severely. The Chinese technology group has submitted a new full-size SUV with a range extender — code-named "Kunlun N3" — for approval by the Ministry of Industry and Information Technology, with a public comment period running until June 17. The model, slated for the second half of 2026, is a direct challenge to Li Auto's dominant L9 and marks Xiaomi's first foray into hybrids, offering up to 500 kilometres of pure electric range from a massive battery. Chief executive Lu Weibing confirmed that a completely new platform underpins the vehicle, part of a strategy to lure family buyers who worry about range anxiety.

Yet the scale of that push is colliding with a harsh reality on the ground. Xiaomi has set a delivery target of 550,000 vehicles for 2026, representing 34% growth over the prior year. After the first five months, however, only roughly 140,000 to 150,000 units have been handed over — meaning the company needs to more than double its monthly run rate in the second half to hit the goal. Monthly sales have been volatile: the YU7 model sold 37,869 units in January but tumbled to 9,876 in April. The overall April tally of 36,702 vehicles did mark a 71.2% improvement over March, and May deliveries again exceeded 30,000, but the pace remains far below what is required.

Every car that leaves the factory floor is currently bleeding money. Xiaomi loses around $5,600 per EV, a drain that weighed heavily on first-quarter results. Revenue reached 99.1 billion renminbi, down almost 11% from a year earlier, while the adjusted net profit came in at 6.1 billion renminbi. Goldman Sachs expects the second quarter to be even weaker, forecasting a 50% plunge in adjusted net earnings to 5.4 billion renminbi on just 1% revenue growth. The combination of auto?spending and artificial?intelligence projects generated an operating loss of 3.1 billion renminbi in the first quarter alone.

Investors have reacted by selling down the stock. Xiaomi's shares closed at €2.89 on Friday, a 35.5% decline since the start of the year and more than 50% lower than 12 months ago. The current price is just 2.64% above the 52-week low of €2.82, and the relative strength index of 32.6 points to oversold territory. The stock also trades nearly 32% below its 200-day moving average, underscoring the technical weakness.

As a response, management unveiled a share buy?back programme authorising the repurchase of up to HK$20 billion in Class B shares over the next 12 months. So far, the market has shown little enthusiasm for the move, with no meaningful stabilisation in the share price.

While the auto division struggles, Xiaomi continues to push its smartphone business in key growth markets. Three confirmed launches are scheduled in India this month: the Xiaomi 17T, the Redmi Turbo 5 (arriving June 16 with a Dimensity 8500 Ultra chipset and a 7,560 mAh battery supporting 100W fast charging), and the Redmi 17 5G. In China, the Xiaomi 18 series powered by the Snapdragon 8 Elite Gen 6 — built on TSMC's 2?nanometre process — is expected in September, though the Ultra variant has been paused due to rising component costs.

The immediate test for Xiaomi Auto lies in the next two months. Deliveries must consistently exceed 30,000 units per month in July and August to keep the annual target of 550,000 vehicles from slipping out of reach. With the stock hovering near its lowest level in 52 weeks and the hybrid SUV still months away from production, the company is racing to convince a skeptical market that its bold automotive bet will eventually pay off.