Xiaomi's Twin Headwinds: EV Losses and Memory Costs Crush Stock as Bold Chip and SUV Plans Face Tough Markets

Xiaomi shares hit 52-week low as EV losses return and memory chip costs squeeze smartphone margins; buyback fails to stem 41% YTD decline.

Xiaomi’s two biggest growth engines are sputtering at the same time, and the stock is paying the price. The shares are hovering near a fresh 52-week low at €2.65, having shed more than 41% since the start of the year. A €4 billion share buyback has done little to stem the bleeding — the stock has fallen another 19% in the past 30 days alone.

The electric vehicle business, which briefly turned profitable in the third quarter of 2025 and even booked an operating profit for the full year, has stumbled again. Xiaomi delivered 150,317 cars in the first five months of 2026 — well short of the 550,000-unit annual target. May shipments of 32,759 vehicles marked an 11% slide from April, leaving a steep hill to climb: from June through December, monthly deliveries would need to average roughly 57,500 units, a figure nearly 15% above the company’s existing monthly record of 50,000. Jefferies has already trimmed its forecast to 495,000.

The EV division generated ¥19.9 billion in revenue in the first quarter, but an operating loss of ¥3.1 billion means Xiaomi is losing about $5,600 on every car it sells. That reversal of fortune has rattled investors who had hoped the segment had turned the corner.

Meanwhile, the core smartphone operation is squeezed from another direction. CEO Lei Jun has flagged that memory chip prices have quintupled for handsets and risen tenfold for televisions, a cost headwind the company expects to persist for two more years. Jefferies notes that 62% of Xiaomi’s smartphone sales fall below the $200 mark, leaving little room to absorb higher input costs. The brokerage projects a five-percentage-point erosion in smartphone margins this year.

Xiaomi is fighting back on two technology fronts, but the timing is awkward. In the second half of 2026 it plans to launch its own Xuanjie processor, manufactured by TSMC and engineered to match Qualcomm’s performance. The chip will debut in the MIX Fold 5 foldable phone. Yet Apple and Qualcomm are already moving to even smaller architectures, threatening to leave Xiaomi a step behind.

On the automotive side, the company has executed a strategic pivot. After years of rejecting the technology, Xiaomi has secured regulatory approval to build extended-range electric vehicles (EREVs). A new sub-brand called Skynomad — not yet officially confirmed — will house the Kunlun N3, a full-size SUV measuring over 5.3 metres with a battery larger than 70 kWh and a pure-electric range of 400 to 500 kilometres. The target price of around ¥200,000 undercuts rivals such as Li Auto and Aito, which start at roughly ¥250,000.

But the EREV market is turning hostile. Wholesale sales in the segment plunged nearly 25% in May, the steepest monthly decline in five years. Even segment leader Li Auto saw deliveries of its flagship L9 collapse 74% year-on-year in the first four months of 2026. Xiaomi’s Kunlun N3 is scheduled to launch in the second half of the year — just as the segment is contracting.

Short sellers are circling, with bearish bets now accounting for roughly 9% of the free float. The relative strength index has dropped to 23.9, signalling the stock is deeply oversold, but a turnaround will require hard evidence of improvement. The June delivery figures, due shortly, will offer the first concrete check on progress. The full second-quarter earnings report is set for August 26, when investors will learn whether EV losses have stabilised and whether memory-cost pressure has begun to ease. With an R&D budget of ¥40 billion for the year, Xiaomi is betting big on the long game — but the market is demanding results now.