Xiaomi’s Strategic Surge: Outpacing Tesla in the Critical EV Arena

Xiaomi KYG9830T1067

A decisive move by Chinese technology giant Xiaomi is resonating through the investment community and sending a clear challenge to its competitors. Beyond a significant show of confidence from its leadership through share repurchases, the company has notched a landmark operational victory against U.S. rival Tesla. This raises a pivotal question for investors: could this mark the beginning of a sustained reversal following a subdued start to the year?

The core of Xiaomi's recent success story is written on the roads of its domestic market. In a striking development for 2025, the company's SU7 sedan has overtaken the Tesla Model 3 in full-year sales. Xiaomi reported 258,164 units sold, decisively outperforming Tesla's 200,361 units—a margin of nearly 30%. Market analysts attribute this shift to an effective competitive strategy, where Xiaomi's combination of a more accessible entry price and superior range has successfully captured market share. This performance is widely seen as validation of the firm's ambitious transformation into a serious automotive contender.

Leadership Backs Confidence with Capital

Concurrently, Xiaomi's management is reinforcing its belief in the company's valuation with tangible financial action. According to a recent stock exchange filing, the corporation allocated approximately HKD 140.4 million on January 26 to repurchase close to four million of its own shares, at an average price of HKD 35.20. This aggressive purchase is part of a previously announced buyback program authorized for up to HKD 2.5 billion. The move sends an unambiguous signal to the market that the executive team considers the current share price undervalued.

Institutional Investors Take Notice

This fundamental strength, evidenced by both market performance and corporate action, is attracting sophisticated capital. Even as the broader Hong Kong market experienced weakness, Xiaomi recorded substantial net inflows from mainland China investors totaling HKD 822 million on Monday. The analyst community remains bullish; Goldman Sachs recently reaffirmed its buy rating, maintaining a price target of HKD 47.50. This implies significant upside potential from the current trading level of HKD 35.56.

However, challenges persist on the horizon, primarily from the cost side. The ongoing shortage of memory chips, fueled by the artificial intelligence boom, may necessitate price increases for Xiaomi's smartphone segment in 2026.

For now, the dual forces of an operational triumph over Tesla and substantial financial backing via share repurchases create a powerful counterbalance to broader macroeconomic risks. The anticipated mid-2025 launch of the new YU7 SUV—a model directly targeting Tesla's popular Model Y—could serve as the next catalyst, potentially accelerating a comprehensive market re-rating of the company.