Xiaomi's SkyNomad Lands 100,000 Orders While India Probe and Profit Slump Test Investors

Xiaomi drew 100,000 SkyNomad pre-orders in a week, but Q2 adjusted net profit fell 42.6% and India's SFIO seeks a deeper probe.

Xiaomi is telling two stories at once, and the market is struggling to price either of them. One is about a Chinese tech group that collected roughly 100,000 pre-orders for its cars inside a week. The other concerns a smartphone maker whose adjusted net profit collapsed 42.6% in the second quarter. Both narratives belong to the same company, and that duality is exactly what makes the stock so hard to read right now.

On Monday, Xiaomi Auto unveiled the SkyNomad line, its first series built around extended-range powertrains. The range spans four variants priced between 209,900 and 299,900 yuan, with total driving range reaching up to 1,705 kilometers under China's test cycle. Media reports put first-week pre-orders at about 100,000 units — a signal that Xiaomi is not merely participating in China's brutally competitive EV arena but actively generating demand.

The unit Xiaomi tracks internally as "Smart EV, AI & Other" grew revenue 17.1% to $3.7 billion in the second quarter, though it booked an operating loss of $385 million. Growth here still costs more than it brings in.

A conglomerate mid-reinvention

The automotive push sits inside a broader overhaul. At IFA in Berlin, Xiaomi said it will spend EUR 24 billion on research and development through 2030, spanning artificial intelligence, operating systems, semiconductors and robotics. In parallel, the company signed letters of intent with eight German auto dealer groups, including Emil Frey Germany and the Ernst Dello Group, as it prepares a European expansion in 2027. This is the ecosystem story — smartphone, car and smart home fused into a single unit, what Xiaomi itself calls "Human × Car × Home."

While that vision generates headlines, the legacy core business is fighting headwinds. Smartphone revenue fell 7.5% to $6.2 billion in the second quarter, with shipments tumbling 26% to 31.2 million devices. Group revenue came in at $16.0 billion, down 6.1% year over year. Xiaomi had already reported a 10.9% revenue decline in the first quarter. The picture of a rocket flying in only one direction does not hold up — this is a rebuild conducted while the engine is running, friction losses included.

The flagship as a statement

Right in the middle of that tension, Xiaomi introduced the 18 Fold, its most ambitious handset to date: a foldable powered by an in-house processor called XRING O3, manufactured on a 3-nanometer process and the first smartphone anywhere to carry LPDDR6 memory. The message is unmistakable — Xiaomi no longer wants to merely assemble hardware, but to build its own chip expertise. That fits the multibillion-euro R&D offensive, yet it also consumes cash that already shows up as margin pressure in the current numbers.

Investors have responded to this crosscurrent with visible skepticism. The stock trades at EUR 2.83, roughly 57% below its 52-week high of EUR 6.54 reached at the end of September last year. Year to date, it is down 35%. No single announcement explains that slide — it is the sum of shrinking smartphone margins, a loss-making EV build-out and a market that currently views future-facing investment with suspicion. Xiaomi launched an automated buyback program worth HKD 2.5 billion in January and had already repurchased 3.3 million shares by May, an attempt to push back against the downward pressure.

India: a probe at the weakest point

Adding to the mix, India's Serious Fraud Investigation Office has recommended a deeper probe into Xiaomi's India business, according to a May 2026 memorandum still awaiting approval from the Ministry of Corporate Affairs. Investigators would examine money flows, compliance with Indian foreign direct investment rules and the group's actual beneficial owners. The e-commerce model run through Amazon and Flipkart is also in the crosshairs.

Xiaomi rejects the allegations, saying it has not been officially notified by any authority and complies with all applicable laws. The case extends a longer history of friction with Indian regulators: back in 2022, the government froze bank deposits worth around $584 million, a dispute that remains unresolved.

The timing could hardly be worse. Xiaomi's smartphone market share in India has slid from 19% to 13%, leaving it in fourth place. India revenue collapsed to $2.52 billion in 2025, a 40% drop from the level of three years earlier. Digitimes put it bluntly: the investigation strikes Xiaomi at its weakest point, in a market it once led and that is now shrinking around it.

The political backdrop is ambivalent. India eased restrictions on Chinese investment in March across areas such as electronics, capital goods and solar cells, and a Dixon-Vivo joint venture won approval. At the same time, investment plans from BYD and Great Wall Motor remain frozen, and an application from Alipay for India's instant-payment system was rejected on national security grounds. President Xi Jinping travels to New Delhi this weekend for the BRICS summit, his first visit to India in seven years, though a meeting with Prime Minister Modi is unconfirmed. Despite diplomatic warming, business ties remain colored by mistrust, with Beijing still withholding equipment and visas.

The stock was down 1.1% on Thursday, caught between these forces. What ultimately decides whether investors buy into the long-term wager on an ecosystem of smartphones, cars and proprietary chips — while quarterly results still bleed — cannot be answered by a single product launch. It takes patience, or the lack of it.