Xiaomi's German Dealer Deals and EUR 24 Billion Tech Push Fail to Lift a Stock Down a Third This Year

Xiaomi signed letters of intent with eight German dealer groups for a 2027 European EV rollout and plans over EUR 24 billion in 2026-2030 R&D spending.

Xiaomi used the IFA 2026 stage in Berlin to make its boldest European move yet, but the capital markets responded with a shrug. On 3 September, the Chinese technology group signed letters of intent with eight German dealership groups — among them Emil Frey Germany, Ernst Dello Group and the LUEG Mobility Group — laying the groundwork for selling its electric vehicles in Germany, with a full European rollout targeted for 2027.

The distribution blueprint carries the internal label "Human x Car x Home," tying electric cars to smart-home devices and the company's existing smartphone business. Rather than simply shipping vehicles, Xiaomi is betting that an ecosystem play will differentiate it in a European market where Chinese manufacturers are already jostling for share.

A EUR 24 Billion Wager on Self-Sufficiency

Running alongside the retail build-out is a far larger financial commitment. Xiaomi plans to spend more than EUR 24 billion between 2026 and 2030, directing the funds into research and development across artificial intelligence, operating systems, semiconductors, intelligent vehicles, robotics and manufacturing technology. The scale of the outlay signals an ambition to reduce dependence on outside suppliers.

A centerpiece of that effort is the recently unveiled Xring O3 chip, built on a 3-nanometer process and developed entirely in-house. It now powers both the company's flagship foldable and the new Pad 9 Pro Max tablet. Combined with vehicle manufacturing and its software ecosystem, the chip program forms the backbone of Xiaomi's long-term transformation from a pure smartphone maker into a broader technology player.

EV Unit Grows Fast, Still Burns Cash

Second-quarter 2026 figures lay bare the tension between growth and profitability. The segment housing electric vehicles, AI and other new initiatives lifted revenue 17.1% to roughly USD 3.7 billion, with about USD 3.5 billion of that coming from the vehicle business alone. The unit's operating loss, however, remained around USD 385 million.

At group level, revenue slipped 6.1% to USD 16.0 billion, though it still edged past analyst expectations. Net profit tumbled 20.3% to approximately USD 1.4 billion, and on an adjusted basis the decline was steeper still at 42.6%, leaving about USD 920 million.

Memory costs have added to the margin pain. Xiaomi president Lu Weibing put first-quarter 2026 memory expenses at nearly four times the prior-year level. In response, Xiaomi, Huawei and Honor raised prices on several models in early September, with flagship devices climbing by as much as 1,000 yuan.

China Rollout Precedes the European Jump

Xiaomi has already gained automotive experience at home through its EREV SUVs in the Sky Nomad line — the N70 Pro, N70 Max and N90 Max — which launched in early September. Extending that vehicle business into Europe would be the next logical step in scaling the division internationally, and the German dealer agreements give the 2027 target a tangible anchor.

The Stock Tells a Different Story

None of the strategic announcements has shifted the shares' underlying weakness. The stock closed Friday at EUR 2.90, up 2.3% on the day, yet it finished the week down 6.8% and has shed roughly a third of its value since the start of the year. Against the 52-week high of EUR 6.54 reached at the end of September, the gap stands at 56%.

Two overhangs have weighed on sentiment. The launch of the Xiaomi 18 Fold foldable smartphone last Tuesday failed to halt the slide — the shares have since given up 2.1%. And for more than a month, a recommendation by India's fraud watchdog SFIO to investigate Xiaomi's local operations has pressured the stock, which has lost 9.2% over that stretch.

With a market capitalization equivalent to EUR 77.11 billion, Xiaomi remains a heavyweight whose strategic pivots draw attention. But until the European expansion and chip strategy start showing up in the numbers, day-to-day headlines from India and the product pipeline are likely to steer the shares more than any long-range ambition.