Xiaomi’s Sub-Brand Push and Fire Probe Collide as Shares Test 3 Euros

A Xiaomi SU7 fire on June 7 raises safety scrutiny; stock nears 52-week low as EV unit loses $5,600 per vehicle. Deliveries fall 44% QoQ, but a new sub-brand 'Kunlun' targets expansion.

The electric vehicle fire that erupted on a bridge in Nanchang on June 7 has thrown a spotlight on Xiaomi’s car safety protocols at a critical juncture. A Xiaomi SU7 Ultra caught fire on the Yingxiong Bridge in Jiangxi Province, with the blaze quickly brought under control. No injuries were reported, and the company’s initial assessment ruled out a battery thermal runaway, though the final cause awaits a fire department verdict. The incident adds reputational risk to an EV division that is already bleeding cash.

Xiaomi’s stock is hovering just above its 52-week low, touching €2.92 at one point — a decline of more than 35% since the start of the year. On June 9, a new low of €2.94 was marked, and the current price of €3.00 leaves little buffer. The relative strength index stands at 35, just shy of oversold territory, while the stock trades roughly 30% below its 200-day moving average of €4.28 and nearly 57% below the 52-week high of €6.69 reached in October 2025. The slide reflects mounting pressure from multiple quarters.

The company’s EV business lost 3.1 billion yuan on an operating basis in the first quarter of 2026, with a gross margin of 20.1%. Xiaomi lost roughly $5,600 per vehicle sold during the period. Delivery volumes also slipped: 80,856 vehicles were shipped in Q1, a 44% decline from the previous quarter, attributed to the phase-out of the first-generation SU7 and lower YU7 deliveries. The YU7, once the star of Xiaomi’s lineup, saw sales drop from 37,869 units in January to 9,876 in April — a natural normalization after an explosive launch. Still, total Xiaomi Auto deliveries rebounded to 36,702 in April, up 71.2% from March.

The ambitious annual target of 550,000 deliveries remains a stretch. With an estimated 140,000 to 150,000 vehicles delivered in the first five months, Xiaomi needs a sharp acceleration in the second half of the year to hit the goal. The broader company is also under financial strain: group revenue fell 10.9% year-on-year to 99.1 billion yuan in the first quarter, and adjusted net profit dropped 43.1% to 6.1 billion yuan.

CEO Lei Jun’s announcement that a limited number of YU7 vehicles were immediately available sparked online skepticism about flagging demand. Xiaomi clarified that the stock came from canceled orders, rejected deliveries, and anomalous transactions, while normal orders still face six-to-nine-week wait times. The episode underscores how quickly market sentiment can sour when expectations around EV ramp-up are fragile.

Meanwhile, Xiaomi is pressing ahead with expansion on multiple fronts. A new sub-brand under the working name “Kunlun” is in development, with spy photos pointing to three extended-range electric SUVs. The company has registered the name “Xuntian”, and industry reports suggest the marque could launch as “SKYNOMAD”, targeting family and outdoor-oriented buyers at a lower price point than the main Xiaomi Auto line.

In its smartphone business, Xiaomi broke with tradition on June 8 by launching the 17T series in China for the first time. Previously, the T-line was reserved for international markets. The 17T is priced at around €385 in China, compared with €749.99 in Europe, reflecting a strategic push to defend its home market share even as smartphone margins erode.

The fire investigation outcome will be a near-term catalyst for the stock. If the fire department confirms no battery fault, the reputational damage may be contained. A contrary finding, however, would expose Xiaomi’s EV program to regulatory scrutiny and public backlash. For the stock to stage a meaningful recovery, Xiaomi must show it can narrow the per-vehicle loss while maintaining delivery momentum — a task made harder by the fresh safety questions. The next quarterly report will provide the first real test.