Xiaomi’s Skynomad SUV Nears Approval as Stock Hits Year Low Amid EV Losses and Delivery Target Jitters

Shares slump 40% from January amid deep EV losses, while regulatory approval for new Skynomad EREV SUV aims to revive flagging auto business, but market contraction looms.

Xiaomi’s shares have slumped to a 52-week trough just as Beijing’s regulators clear the path for a new hybrid SUV that the company hopes will turn around its flagging automotive business. The stock changed hands at €2.69 in recent trading, barely above the year’s low of €2.67 and more than 40% below its January level. The selloff has been relentless: a $2.5 billion buyback launched in early June has failed to staunch the bleeding, with Xiaomi repurchasing over 30 million Class B shares to no avail.

The pressure on the stock is being driven by a deepening loss in the electric-vehicle division. In the first quarter the auto unit booked revenues of 19.9 billion yuan but an operating loss of 3.1 billion yuan, translating into a loss of roughly $5,600 per vehicle delivered. Compounding the pain, margins in Xiaomi’s smartphone core business have been squeezed to 10.1% on rising memory-chip costs. Goldman Sachs expects second-quarter adjusted net profit to collapse 50% to 5.4 billion yuan, with overall revenue growth grinding to just 1%. Strip out the EV and AI segments, and revenue would shrink 9%.

Jefferies has been even more bearish, downgrading Xiaomi to “underperform” and slashing its price target to HK$25.49. The bank cited shrinking margins and flagging auto demand.

The company’s answer is a sharp pivot into extended-range electric vehicles. China’s Ministry of Industry and Information Technology has completed the comment period for Xiaomi’s EREV application, meaning final approval is all but certain. The first model will be the Kunlun N3, a full-size SUV stretching over 5.3 metres that Xiaomi plans to sell under a new sub-brand called Skynomad. The move is intended to shield the sporty image of the SU7 and YU7 battery-electric models while appealing to families with a price point of around 200,000 yuan – well below the 250,000-yuan starting price of rivals Li Auto and Huawei-backed Aito.

The Skynomad is expected to offer 400 to 500 kilometres of all-electric range and a combined range of roughly 1,500 kilometres. A launch is pencilled in for the second half of 2026, though Xiaomi has yet to confirm either the name or timing officially.

The hybrid push arrives at a precarious moment. Xiaomi delivered between 140,000 and 150,000 vehicles in the first five months of 2026 – a year-on-year increase of just 13.5% – leaving the full-year target of 550,000 units in serious doubt. May deliveries totalled 32,759 vehicles, down 11% from April’s 36,702. To hit the annual goal, Xiaomi would need to hand over roughly 57,500 cars each month from June through December – well above the company’s all-time monthly record of 50,000 set in December 2025.

Worse, the EREV market itself is contracting. Wholesale volumes in May plunged nearly 25%, the steepest monthly decline in five years, meaning Xiaomi is entering a shrinking pool of competition.

Management is banking on heavy investment to pay off later. First-quarter research and development spending surged 33.4% to 9.0 billion yuan, and the company now employs more than 26,000 R&D staff. A full-year R&D budget of around 40 billion yuan is planned. Yet those outlays provide little comfort to investors staring at a stock that has halved from its 2025 highs.

Xiaomi will report second-quarter earnings on August 26. At that point the market will see whether the EV division’s losses have eased and whether the Skynomad bet can begin to offset the damage from a weakening core business and a stock stuck near its lowest level in a year.