Xiaomi Breaks with Pure-EV Strategy as Skynomad Brand Takes Aim at the Price War
Published on 07/03/2026 at 22:31 | Redaktion boerse-global.de
Xiaomi has unveiled a second electric-vehicle brand, Skynomad, marking a sharp strategic pivot away from its all-battery lineup. The move, which introduces a range-extender hybrid as the first model, is designed to sidestep the brutal price war gripping China's pure-EV market and to counter mounting pressure on margins from rising memory-chip costs.
The new sub-brand targets families with an initial price tag of under €26,000. Its debut vehicle, codenamed "Kunlun N3", is a 5.3-metre SUV with a 3.1-metre wheelbase and is scheduled for launch in the second half of this year. Unlike the existing SU7 and YU7 models — both fully battery-electric — the N3 relies on a combustion engine as a range extender, a configuration that directly challenges established players such as Li Auto's L9, the Aito M9 and the Leapmotor D19.
The rationale behind the shift is twofold. Analysts expect memory-chip prices to surge by as much as 50% in the third quarter, compressing margins in Xiaomi's smartphone business. At the same time, China's EV market is locked in a price war that has made pure-electric vehicles increasingly difficult to sell profitably. By offering a hybrid, Xiaomi hopes to appeal to customers wary of range anxiety and to carve out a niche that has so far belonged to rivals like Li Auto.
Stock tells a bleaker story
Should investors sell immediately? Or is it worth buying Xiaomi?
Despite the strategic news, Xiaomi's shares have barely budged from their depressed levels. The stock traded at €2.68 on the day of the announcement, up 3.88%, and has gained 8.99% over the past week. Yet that recovery looks modest against a near-60% plunge from the September 2025 record high of €6.51. The shares remain 58.83% below that peak and are down 40.31% year-to-date, with a 12-month decline of 57.35%.
The equity hit a fresh 52-week low of €2.34 on June 26, from which it has since climbed 14.48%. Technical indicators paint a mixed picture: the relative strength index (RSI) has recovered to 42.8 from oversold territory, but the stock still trades 12.55% below its 50-day moving average and 32.49% below its 200-day average. The annualised volatility of 36.05% underscores persistent nervousness among investors.
Analyst camps diverge on margin outlook
The fundamental debate hinges on whether Xiaomi can stabilise margins in its automotive division while managing a spike in memory-chip costs that threatens smartphone profitability. President Lu Weibing has already warned that the EV gross margin is unlikely to match last year's level in 2026. In the first quarter, the EV unit swung back to an operating loss of 3.1 billion yuan, with the gross margin slipping to 20.1% from previous quarters.
On the bullish side, Goldman Sachs maintained a buy rating even after trimming its price target, citing a sum-of-the-parts valuation that sees value beyond the near-term margin squeeze. The service business and the AIoT ecosystem are viewed as stabilising anchors. Xiaomi targets 550,000 EV deliveries in 2026, a goal that could serve as a catalyst if achieved.
Jefferies analyst Edison Lee took a more bearish stance, downgrading the stock from Hold to Underperform and slashing his 12-month price target. He pointed to the Q1 operating loss and a roughly 100% year-on-year inflation in memory-chip prices, which makes the smartphone margin target far harder to hit. Lee also flagged the progressive halving of Chinese purchase-tax incentives, which will force automakers to offer their own subsidies and further compress margins.
Factory expansion faces EU tariff wall
Xiaomi at a turning point? This analysis reveals what investors need to know now.
Xiaomi is scaling up production capacity at its Beijing Yizhuang plant. Two phases, each with 150,000 units of annual capacity, are already operational. A third phase, adding roughly 100,000 units, is under way, which would bring total capacity to over 400,000 vehicles per year.
So far, virtually all sales remain inside China. Overseas expansion is not planned until 2027. For Europe, an additional hurdle looms: the European Union has imposed a compensatory tariff of around 30.7% on Chinese EVs since October 2024. In January 2026, Brussels published guidelines for a minimum-price system negotiated with Beijing; an agreement could soften the tariff burden. Until then, any Xiaomi vehicles reaching European buyers will do so through parallel import channels, at prices that are unlikely to appeal to private customers.
Buyback provides floor, but doubts linger
Xiaomi's record share buyback programme has helped cushion the stock from further slides, but it has not dispelled fundamental uncertainty. The next catalyst is the second-quarter earnings report for 2026, which will reveal whether the margin deterioration flagged by Lu Weibing is materialising — or if countermeasures are beginning to bite. With the RSI only recently exiting oversold territory, the technical case for a sustained recovery remains fragile. The 50-day moving average at €3.06 is the first resistance level to watch, while the €2.34 low stands as a critical support if the headwinds from subsidy cuts, price wars and chip costs persist.
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Xiaomi Stock: New Analysis - 3 July
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