Xiaomi's Two-Speed Story: EV Momentum Meets a Memory-Chip Margin Squeeze
Published on 08/16/2026 at 18:12 | Redaktion boerse-global.de
The numbers landing on investors' desks Tuesday evening in Hong Kong will tell two very different stories about Xiaomi. One is about a smartphone business caught between soaring component costs and a market at its weakest point in over a decade. The other is about an electric-vehicle arm finally hitting its delivery stride. The question hanging over the 19:30 Beijing time investor webcast is which of those narratives will carry more weight with the market.
The Margin Squeeze in the Core Business
Goldman Sachs has penciled in a second-quarter gross margin of just 8.2 percent for Xiaomi's smartphone division — a figure that underscores just how aggressively memory-chip inflation has eaten into the company's traditionally thin hardware margins. The cost of DRAM and NAND components has reportedly quadrupled, and while Xiaomi has begun passing some of that pain along to consumers — the average selling price of its flagship 17 Pro jumped from 4,750 to 5,699 yuan in August — the move may not be enough to fully offset the damage.
The broader industry is feeling the same pinch. iQOO, OnePlus, Realme and Google have all announced price hikes of their own, a sign that the supply-chain pressure is systemic rather than company-specific. Counterpoint data shows the global smartphone market has fallen to its lowest level since 2013, with Xiaomi's share slipping to around 12 percent. CICC expects the company's second-quarter revenue to come in near 107.14 billion RMB, a year-on-year decline of roughly 7.6 percent, with earnings per share also expected to drop meaningfully.
That said, the first quarter offered some evidence that the core business can still generate momentum when conditions allow. Revenue reached 99.1 billion yuan, operating profit in the smartphone and IoT segments climbed nearly 200 percent quarter-on-quarter, and the average handset selling price hit a record 1,310 yuan. Research spending rose 33.4 percent to 8.95 billion yuan over the same period, with Xiaomi committing at least 16 billion yuan to artificial intelligence this year and more than 60 billion yuan across a three-year horizon. A cash pile exceeding 220 billion yuan gives management room to absorb some cost pressure without immediately passing every increase to customers.
EVs Take Center Stage
The brighter spot is unmistakably the automotive division. CEO Lei Jun has set a delivery target of 550,000 vehicles for 2026, and the quarterly trajectory suggests that ambition is not fantasy. After 80,856 deliveries in the first quarter, monthly figures from April through June consistently topped 30,000 units, pushing the second quarter past the 100,000-delivery mark for the first time. The auto unit contributed 19.9 billion yuan in revenue in Q1, up 6.9 percent.
The metric investors will be watching most closely, however, is the loss per vehicle. That figure stood at roughly 5,600 US dollars in the first quarter, and the market wants to see whether economies of scale are compressing it as planned. Reception of the new SU7 generation and the YU7 SUV will also factor into the assessment.
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A Stock at a Technical Crossroads
The share price has been hovering near a pivotal technical level. At 2.87 euros, the stock sits just below its 50-day moving average of 2.89 euros — the line that would need to be reclaimed to spark fresh upward momentum. The relative strength index of 43.4 points to neutral territory, leaving the door open in either direction. Xiaomi shares have fallen 34 percent since the start of the year, and the last seven trading sessions brought a 5.6 percent decline, suggesting investors have already begun pricing in the memory-chip headwinds. Friday's session offered little relief, with the stock closing up just 0.8 percent.
What Tuesday Must Deliver
The earnings report will need to demonstrate that premiumization can hold up under cost pressure — that higher selling prices can compensate for the component bill without alienating the value-conscious buyers who have long defined Xiaomi's brand. The company's software push, including a July security update covering 58 devices from the Xiaomi 14 Ultra down to Redmi and Poco models, helps with customer retention but does little to address the structural cost challenge.
Samsung's reported heavy investment in research and development suggests the industry's cost structure is shifting in ways that will outlast any single quarter. For Xiaomi, the question is whether its two-speed business model — a squeezed smartphone operation and a scaling EV arm — can generate enough combined momentum to reassure investors that the premiumization strategy is working, not just in theory, but in the numbers.
