Xiaomi's Two-Front Battle: Chasing Volume in Phones While Racing the Clock on EVs

Xiaomi's EV deliveries hit 4 straight months above 30k, but stock falls 5% as smartphone share drops and memory costs threaten margins.

The arithmetic at Xiaomi is getting harder to reconcile. The company's electric vehicle division just posted its fourth consecutive month of deliveries above 30,000 vehicles, yet the stock still shed 5.00 percent on Friday to close at EUR 3.23. Investors are wrestling with two competing narratives: a smartphone business that is bleeding market share under the weight of surging memory-chip costs, and an EV unit whose ambitious delivery target demands a near-doubling of monthly output.

That Friday decline came despite a remarkable short-term recovery. The stock has gained 30.69 percent over the past 30 days, though it remains 25.36 percent below its level at the start of the year and sits more than 50 percent off its 52-week high. The gap between those figures captures the market's uncertainty about which direction the company is actually heading.

A Volume Bet in a Market That's Shrinking

The most immediate catalyst for the recent share-price swing is a report that Xiaomi plans to raise its 2026 smartphone sales target from 90 million to 110 million units — a 22 percent increase. The company is betting that memory-chip prices are stabilizing, and it wants to use that window to grab market share in budget and mid-tier segments across Asia and Latin America. An official confirmation of the revised target has not yet been issued.

That strategy runs directly into a warning from Apple, which has flagged a looming cost explosion in memory components. The Cupertino giant has suggested that rising wafer costs at TSMC and expensive memory chips could push flagship device prices up by as much as USD 300. If that cost wave reaches Xiaomi's core mid-tier territory, the volume target could only be met at the expense of hardware margins.

Recent industry data suggests the risk is real. According to Omdia and IDC, Xiaomi's global smartphone shipments fell 26 percent year-on-year in the second quarter of 2026, to roughly 31.2 million units. The company's global market share dropped from 15 percent a year earlier to between 11 and 12 percent, while premium players Apple and Samsung gained ground. IDC attributes the slide to consumer resistance after Xiaomi was forced to raise prices to offset component costs.

The EV Side of the Equation

The smartphone struggles stand in stark contrast to the momentum in electric vehicles. Xiaomi EV delivered 185,055 cars in the first half of 2026, and July marked the fourth straight month above the 30,000-vehicle threshold. Founder Lei Jun has set a full-year target of 550,000 deliveries, which would require average monthly output of nearly 61,000 vehicles in the second half — a massive acceleration from the current pace.

The company unveiled its new "SkyNomad" SUV lineup on July 30, and analysts see the aggressive pricing as a potential pressure point. The strategy may be necessary to hit the volume target, but it could further squeeze margins in the EV business at a time when the smartphone division is already eroding profitability.

There is also a fresh cost headache on the horizon: Qualcomm has announced a price increase for Snapdragon chips effective September 2026, which would add further pressure to Xiaomi's smartphone cost structure just as margins are already contracting.

What the Charts Say

Technical indicators suggest the recent rally has limited room to run without fundamental confirmation. The relative strength index stands at 57.7, meaning the stock is no longer oversold after its sharp advance. The share price remains 13.27 percent below its 200-day moving average, a gap that could close if Xiaomi's thesis on stabilizing memory prices proves correct.

On the downside, a renewed deterioration in semiconductor sentiment could bring the 52-week low of EUR 2.34 back into play.

The August 18 Test

The next major catalyst is the official second-quarter earnings release on August 18, 2026. Investors will be looking for two things: whether Xiaomi formally confirms the higher smartphone target, and how the company frames its gross-margin outlook given the global chip-market dynamics. The key question is whether the EV division and the services business can generate enough profit to offset the damage in smartphones — and whether Xiaomi's bet on memory-chip stabilization is a calculated move or a miscalculation that will come back to haunt its margins.