Xiaomi’s Two-Speed Reality: A Premium SUV Debut Meets a Bruised Stock

The contrast at Xiaomi right now could hardly be starker. On the Beijing Auto Show stage, the company is unveiling a 1,000-horsepower electric SUV designed to take on Porsche. On the trading floor, its stock is trading nearly 50% below its 2025 peak. Management’s response has been swift: a HK$141 million share buyback executed on April 24, scooping up 4.5 million B-shares at prices between HK$31.12 and HK$31.34.

The buyback is no coincidence. Xiaomi’s shares have been cut in half since hitting around HK$60 last summer, and on European exchanges the stock now changes hands at €3.42 — a 24% decline since the start of the year and well below its 200-day moving average of €4.68. Analysts point to rising memory-component costs and intensifying geopolitical pressure on Chinese tech names as the primary culprits behind the selloff. The stock recently touched a 52-week low of €3.38 in mid-April, and has since slipped under its 20-day line, a technical signal that investor skepticism remains entrenched.

The YU7 GT: A Statement of Intent

While the share price struggles, Xiaomi’s automotive division is charging ahead. The centerpiece of its Beijing Auto Show presence is the YU7 GT, a fully electric high-performance SUV packing a dual-motor all-wheel-drive system delivering 738 kW of total output. Top speed is rated at 300 km/h, and range under China’s CLTC standard reaches up to 705 kilometers. Industry watchers expect pricing between 450,000 and 500,000 yuan, with a market launch slated for the end of May 2026.

The YU7 GT is designed to prove Xiaomi can compete in the premium segment — not just the mid-range where its debut model, the SU7, has already gained traction. CEO Lei Jun has made clear that budget vehicles are off the table for at least the next decade, positioning the brand squarely against Porsche and Tesla. The aggressive front-end styling and a new “Cherry Red” color option underscore that ambition.

Should investors sell immediately? Or is it worth buying Xiaomi?

Deliveries Surge, But Doubts Linger

On the operational front, the strategy is delivering results. Last year, the SU7 outsold the Tesla Model 3 in China for the first time. In the first quarter of 2026, Xiaomi handed over more than 79,000 vehicles to customers. The board is targeting roughly 550,000 deliveries for the full year, up from around 410,000 in 2025.

Yet these milestones have done little to lift the stock. The EV sector in China remains brutally competitive, and investors are demanding proof that margins can hold up as volumes scale. The next major checkpoint comes on May 27, 2026, when Xiaomi reports its first-quarter results. All eyes will be on the automotive division’s gross margins and whether the 550,000-unit target remains realistic.

Cloud, AI, and a European Horizon

Beyond cars, Xiaomi is deepening its technology partnerships. An expanded framework agreement with Kingsoft Cloud has raised transaction caps for 2026 and 2027, driven by stronger-than-expected demand for cloud and AI infrastructure. The deal now also covers API services and hardware procurement through the end of 2027. Xiaomi’s 2026 research budget exceeds RMB 40 billion, with a significant chunk earmarked for AI development.

Meanwhile, the company is preparing to broaden its powertrain lineup. After sticking exclusively with battery-electric vehicles, Xiaomi is now developing EREV (extended-range electric vehicle) models and plans to launch four to six new vehicles this year starting at 200,000 yuan. A European market entry is on the cards for 2027, and a recent visit by Spain’s prime minister to Xiaomi’s Beijing headquarters has fueled speculation about a potential production base in the country.