Xiaomi's Weekly Rally Masks Deep Challenges: EV Delivery Gap and Memory Cost Squeeze Persist

Xiaomi stock edges up but faces dual headwinds: memory chip costs force flagship cancellation, EV deliveries fall short of 550k target. Analyst downgrades to Hold; new SkyNomad SUV launched.

Xiaomi’s stock edged up 5.43 percent over the past week, closing at €2.95 on Tuesday, but the bounce belies two serious headwinds. The Beijing-based electronics maker is simultaneously grappling with a semiconductor memory crisis that has forced it to scrap a flagship smartphone model, and an electric-vehicle delivery target that appears increasingly out of reach after just 185,055 units were handed over in the first half of 2026. The mixed picture has split analysts, with one Seeking Alpha commentator downgrading the stock from “Buy” to “Hold” on July 14, citing the ambitious goal of 550,000 EV deliveries for the full year.

The analyst’s caution came on the same day Xiaomi unveiled its third vehicle, the SkyNomad, an extended-range SUV built on the new Kunlun platform. The N90 variant measures 5,285 mm in length and tips the scales at roughly 2.8 tonnes, using a 1.5-litre turbo petrol generator paired with two electric motors delivering about 420 hp. A 76-kWh battery provides up to 370 kilometres of pure electric range, while the interior features rotating front seats, a fold-out table and a sleep configuration — a “rolling living room” that accommodates seven passengers in a 2-2-3 layout. Xiaomi’s founder Lei Jun noted the difficulty of fitting captain’s chairs into an EREV design. The model completed 4.28 million test kilometres across 194 cities in 31 Chinese provinces, enduring temperatures from –41°C in Heihe to +53°C in Turpan. Yet even with such engineering efforts, the first-half delivery total of 185,055 vehicles — up 17.2 percent year-on-year — implies a pace far too slow to reach the 550,000 target.

The memory-chip crisis is putting equal pressure on Xiaomi’s core smartphone business. DRAM and NAND costs have risen to four or five times their year-ago levels, squeezing margins and forcing the company to abandon development of the planned Xiaomi 18 Ultra. The 18 Pro Max will now serve as a transitional flagship instead. Xiaomi’s smartphone market share has slipped to between 11 and 12 percent, trailing Samsung and Apple, and its 2026 shipment target has been cut to around 95 million units — a roughly 44 percent reduction from earlier plans. In the first quarter, global deliveries declined 19.2 percent year-on-year, while average selling price rose 8 percent to 1,310 yuan. Profit for the period dropped 43.1 percent. On the brighter side, Xiaomi’s Redmi Note 17 series launched in China on July 14, offering batteries up to 9,000 mAh and 67W fast charging on the Pro model, with a German rollout expected in late 2026 or early 2027. Wearables like fitness bands and wireless headphones are also growing, and the YU7 electric crossover has outperformed expectations.

Investors have seized on cost-cutting efforts and an unexpectedly capable artificial intelligence model called MiMo as reasons for optimism. A Caixin report that Xiaomi has been trimming staff across divisions since March — with a preliminary target of roughly 30 percent — was downplayed by the company as routine adjustments. Some analysts interpret this as political messaging, since mass layoffs are sensitive in China, but the market interpreted the restructuring news positively, helping to push the stock higher. The stock has also drawn support from gains in the broader tech sector, though the underlying fundamentals remain under pressure: Xiaomi’s own AI model, MiMo, has impressed observers with its performance, adding a narrative of technological promise.

Despite the weekly advance, the shares still trade 34.32 percent below their January 1 level and 53.63 percent below the price of a year ago. The 52-week high of €6.51 from September 2025 remains 54.69 percent away, while the distance from the June 2026 low of €2.34 stands at about 26 percent. Technically, the stock sits just under its 50-day moving average of €2.99 and 24 percent below the 200-day average of €3.86. The 30-day annualised volatility is 39.52 percent, and the relative strength index of 59.6 suggests neither overbought nor oversold conditions. With a market capitalisation of roughly €74.8 billion, Xiaomi now faces two critical questions: will the cost reductions translate into tangible profit improvement, and how long will the memory-chip shortage continue to weigh on its smartphone engine — a constraint that Omdia and Counterpoint analysts expect to last well into the second half of 2027.