Xiaomi Signs Eight German Dealer Groups While Committing EUR 24 Billion to Chips and EVs

Xiaomi signed letters of intent with eight German auto retail groups for a 2027 EV rollout, as Q2 group revenue fell 6.1% and auto losses persisted.

Xiaomi used the IFA stage in Berlin to lock down its European distribution footprint, signing letters of intent on 3 September with eight German auto retail groups. Emil Frey Germany, the Ernst Dello Group and the LUEG Mobility Group are among the partners named, giving the Chinese technology company access to an established sales and service network in Germany without having to fund new sites of its own. The agreements lay the groundwork for selling Xiaomi electric vehicles in Germany, with a European rollout targeted for 2027.

The dealer deals sit at the centre of a broader spending push. Between 2026 and 2030, Xiaomi plans to invest more than EUR 24 billion, funnelling the money into research and development with a focus on artificial intelligence, operating systems, semiconductors, smart vehicles, robotics and manufacturing technology. The scale of the commitment signals how far the company wants to reduce its reliance on outside suppliers.

A chip built entirely in-house

That independence drive already has a flagship product. The recently unveiled Xring O3 chip, manufactured on a 3-nanometre process, was developed entirely in-house and now powers both the company's flagship foldable and the new Pad 9 Pro Max tablet. Pairing chip design with vehicle manufacturing and a software ecosystem is central to Xiaomi's ambition of evolving from a pure smartphone maker into a broader technology group.

EV revenue climbs, losses persist

The second-quarter 2026 figures show both sides of that transition. The segment covering electric vehicles, AI and other new initiatives lifted revenue by 17.1% to roughly USD 3.7 billion, of which about USD 3.5 billion came from vehicles. The operating loss for the unit, however, remained around USD 385 million.

At group level, revenue slipped 6.1% year on year to USD 16.0 billion, though it still came in slightly ahead of analyst expectations. Net profit fell 20.3% to approximately USD 1.4 billion, and dropped 42.6% to about USD 920 million on an adjusted basis.

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

Battery guarantee and a lifetime replacement pledge

On the product side, Xiaomi is rolling out a new vehicle battery in China under the Dragonscale, or Longjia, name. The launch comes bundled with an unusually sweeping guarantee: should a manufacturing defect cause a battery fire in a first-owner vehicle, Xiaomi will replace the car with an identical model for life. The battery debuts in the Skynomad SUV, which goes to market as the Pengcheng on the Kunlun platform.

The pledge lands against a difficult operating backdrop for the car business. Deliveries totalled 31,267 vehicles in July, well below the 50,212 units shipped in December 2025. In the first quarter of 2026, the company booked a loss of more than USD 5,500 for every vehicle delivered — a combination of falling volumes and heavy per-unit losses that lays bare how much Xiaomi still needs to spend before the segment turns a profit, even as it opens new markets such as Germany.

Management reshuffle points to global ambitions

Personnel moves reinforce the international push. Michael Feng has taken over as Country Director for Indonesia, succeeding Wentao Zhao, who becomes global General Manager for Retail Management. Feng's track record is the obvious rationale: as country head in Ukraine he drove Xiaomi to a 46% market share, in Colombia to market leadership with 32%, and most recently positioned the Italian business among the top three with a 14% share, posting 52% growth there in the second quarter of 2025.

The stock is not buying the story yet

Investors have yet to be convinced by the strategic repositioning. The shares closed Friday at EUR 2.90, up 2.3% on the day but not enough to erase a 6.8% decline over the previous seven trading sessions. Year to date the stock is down 33%, and it sits 56% below its 52-week high of EUR 6.54 reached last September. The RSI reads 44.6, squarely in neutral territory, and the price remains clearly beneath its 200-day moving average of EUR 3.48.

Expansion across Europe and Asia points to long-term growth potential, yet the operating losses in the auto business and the persistent weakness in the share price suggest the market has not yet priced in that strategy. Whether the billions committed to chips and cars eventually pay off hinges largely on the success of the German rollout and the chip roadmap.