Xiaomi Unveils Aggressive $28 Billion Tech Investment Drive

Xiaomi KYG9830T1067

In a bold move to cement its position among the world's leading technology firms, Xiaomi's CEO Lei Jun has announced a massive five-year research and development commitment totaling 200 billion yuan (approximately $28 billion). The strategic push, revealed on January 8 via social media, coincides with the opening of pre-orders for an upgraded version of its SU7 electric vehicle, which now carries a higher price tag. The dual announcements signal the company's intensified focus on closing the gap with industry leaders in semiconductors, artificial intelligence, and robotics.

The new R&D pledge effectively doubles the company's previous five-year commitment of 100 billion yuan, a target Xiaomi had already exceeded by spending 105 billion yuan. The capital will be channeled into core areas including proprietary chip development, operating systems, next-generation AI models, and robotic technologies.

A specific product goal has been set for 2026: the launch of a consumer device that integrates Xiaomi's own chips, its self-developed operating system, and a large-scale AI model. The company's recent annual technology awards highlighted this direction, with projects related to semiconductors, smartphones, and smart vehicles receiving the majority of recognition. Notably, two-thirds of the awarded projects already utilize AI-assisted development processes.

Enhanced Electric Vehicle Commands Premium

The revised SU7 electric sedan now starts at 229,900 yuan, representing a 6.5% increase over its predecessor. Despite the hike, it remains competitively priced below the Tesla Model 3, which starts at 235,900 yuan in the Chinese market. The company justifies the new price with substantial technical upgrades.

Key improvements include an extended driving range of 902 kilometers on a single charge and the inclusion of LiDAR technology as standard equipment. The computing power for its advanced driver-assistance system (ADAS) has been boosted from 508 to 700 TOPS. Safety enhancements feature two additional airbags and a reinforced vehicle body with a strength of 2,200 MPa.

"Safety is the foundation and prerequisite," emphasized CEO Lei Jun, a statement viewed as a direct response to two fatal accidents involving Xiaomi vehicles in 2025, the causes of which remain under investigation. Customer deliveries for the new model are scheduled to begin in April 2026. Since its initial market debut in March 2024, over 360,000 units of the SU7 have been sold.

Share Buybacks and Upgraded Outlook Reflect Confidence

Demonstrating faith in its own valuation, Xiaomi's management has been actively repurchasing shares. On January 8, the company bought back 5 million Class B shares for HK$190.6 million. This followed similar transactions in the preceding week: 3.9 million shares for HK$148.8 million on January 7 and 3.8 million shares for HK$149.3 million on January 5.

This confidence appears to be shared by credit rating agencies. In December 2025, S&P Global Ratings revised its outlook on Xiaomi from "stable" to "positive," while affirming its BBB credit rating. The agency forecasts a 6% revenue increase for 2026 and expects the company to deliver 500,000 electric vehicles that year.

Financial Targets and Forthcoming Results

Xiaomi has set an ambitious sales target of 550,000 electric vehicles for 2026. Market analysts, on average, project earnings per share of 1.91 Chinese yuan for the 2026 fiscal year, which would equate to growth of 17% over 2025. The consensus price target among analysts stands at 52.33 yuan, suggesting a potential upside of over 50% from current levels. Sentiment is broadly positive, with 39 analysts predominantly issuing "Buy" recommendations.

The company's next financial update, covering the fourth quarter of 2025, is scheduled for release on March 23. These results will be closely scrutinized for evidence that Xiaomi is on track to meet its ambitious technological and commercial goals.