Xiaomi Group’s stock price has plummeted significantly over the past two months, dropping by around 34.7%, resulting in a market capitalization loss of over 530 billion Hong Kong dollars. At the same time, the company’s electric vehicle business has been particularly affected by multiple negative factors such as safety issues, factory production delays, and rising upstream costs.
According to a report by the Financial Times, from September 25th to November 19th, Xiaomi’s stock price has tumbled by 34.7%, leading to a market capitalization loss of over 530 billion Hong Kong dollars. This decline surpasses the combined market value of electric vehicle companies such as NIO, Li Auto, XPeng, and Leapmotor during the same period (approximately 500 billion Hong Kong dollars).
Compared to the annual high of 61.45 Hong Kong dollars on June 27th, Xiaomi’s stock price has accumulated a decline of about 36.83% as of the closing on November 19th.
The release of the 17 Series and other new products on September 25th led to a sharp drop in stock price the following day, with a single-day decline of 8.07%. In October, the market value evaporated by over 280 billion Hong Kong dollars, marking the largest monthly decline in the company’s history.
The main reasons for Xiaomi’s stock price decline include repeated accidents in the electric vehicle sector this year. In March 2025, an SU7 vehicle caused three fatalities in a highway accident; in October, another SU7 caught fire in Chengdu, with the driver trapped inside unable to open the door.
In September, the company announced the recall of 116,887 standard SU7 models due to the L2-level advanced driving assistance system potentially having insufficient recognition/response in extreme scenarios.
A lag in factory construction and production progress is also one of the reasons for the stock price decline. The planned increase in annual production capacity to 300,000 vehicles after the second-phase factory operation has been postponed. It was reported that the delivery volume in October was only around 40,000 vehicles, almost the same as in September.
Furthermore, there is increasing pressure from upstream costs, including rising prices of memory chips, compressing profit margins. On November 1st, investment bank Goldman Sachs lowered Xiaomi’s target price by over 10%.
These factors combined have led the market to adopt a cautious outlook on Xiaomi’s new energy vehicle business and overall growth prospects.
Starting as a tech giant specializing in smartphones and consumer electronics, Xiaomi swiftly entered the electric vehicle market after launching its automotive business in 2024. Its SU7 is regarded as a flagship model. However, with intensifying competition in the domestic EV market, incidents regarding safety, recalls, and production delays have become “growing pains” that many new entrants must face. For Xiaomi, the profit model in the smartphone business is clear, whereas the automotive sector requires long-term investment with high costs and risks.
Currently, global prices of key components such as memory chips and power devices are rising, combined with a deeper reliance on software, sensors, and autonomous driving systems in new energy vehicle production, putting pressure on car manufacturers’ gross margins. For companies that have recently transitioned into car manufacturing, the external environmental pressures they face are particularly evident.