Xiaomi's Extended-Range SUV Push Comes as the EREV Market Shrinks by 25%
Published on 06/19/2026 at 17:15 | Redaktion boerse-global.de
Xiaomi is placing a big bet on plug-in hybrids just as the segment is contracting. The Chinese tech giant has secured regulatory approval for a new sub-brand, Skynomad, that will produce extended-range electric vehicles (EREVs) — a pivot that comes as the broader EREV market in China shrank by nearly a quarter over the past year. It is a gamble that underscores just how much the company is struggling on its main fronts.
The urgency is visible in the share price. Xiaomi’s stock has shed roughly 40% since the start of the year, hitting a 52-week low of HK$2.67 (€2.67) before recovering slightly to €2.69. The relative strength index has plunged to 25.1, deep in oversold territory, and the stock now trades 35% below its 200-day moving average. A €2.70-level on Tuesday — just above the low — suggests the selling pressure has not let up.
In response, Xiaomi has launched an automated share buyback program of up to HK$4 billion, executed by an independent broker under fixed rules. The Hong Kong Stock Exchange has granted a special exemption allowing repurchases even during the blackout periods ahead of quarterly results. The program is set to run until the end of 2026. Additionally, the company has a broader buyback mandate of up to HK$20 billion, in place since early June, under which it has already bought back over 30 million Class B shares. None of this buying has arrested the decline.
The root cause is a two-sided squeeze. Xiaomi’s smartphone business, its historic cash cow, is seeing gross margins compressed to just 10.1%, weighed down by more expensive memory chips. Research and development spending jumped 33.4% year-on-year in the first quarter to RMB 9.0 billion, with the full-year budget set at around RMB 40 billion — much of it flowing into the auto division.
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That auto division is burning cash at a ferocious rate. In the first quarter, its revenue reached RMB 19.9 billion, but operating losses came in at RMB 3.1 billion, equating to a loss of roughly US$5,600 for every vehicle delivered. The burn rate is only intensifying as Xiaomi tries to scale up production.
Xiaomi delivered 32,759 vehicles in May, down 11% from April, bringing the five-month cumulative total to 150,317 units — a 13.5% increase year-on-year. The company is targeting 550,000 deliveries for the full year, which would require monthly sales of around 57,500 from June through December. Its all-time monthly record, set in December 2025, stands at just 50,000 vehicles.
With the core business under pressure and the EV expansion bleeding cash, analysts have turned increasingly bearish. Jefferies downgraded the stock to Underperform with a price target of €2.82, citing shrinking margins and weak auto demand. Goldman Sachs expects earnings to drop by 50% in the second quarter.
The Skynomad initiative aims to address some of these headwinds by broadening Xiaomi’s product lineup beyond pure battery EVs like the SU7 and YU7. The first model, internally called the Kunlun N3, will be a full-size SUV stretching over 5.3 meters. It is expected to offer a combined range of around 1,500 kilometers, with 400 to 500 kilometers fully electric, and will be priced at roughly RMB 200,000 — significantly undercutting competitors from Li Auto and the Huawei-backed Aito brand, whose similar models typically start above RMB 250,000.
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But timing is everything. The Chinese EREV market shrank by nearly 25% as Xiaomi was preparing its entry, and seven of the ten best-selling extended-range SUVs in 2025 came from Li Auto and Aito. Xiaomi will need to carve out a niche in a segment that is suddenly contracting.
All eyes are now on August 26, when Xiaomi reports second-quarter results. That is when investors will see whether the cost-cutting measures, the massive R&D spending, and the new EREV bet are beginning to pay off — or whether Goldman Sachs’ forecast of a 50% profit plunge proves accurate.
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