Xiaomi's New Chip and Second EV Brand Face Headwinds as Shares Languish Near Year Low
20.06.2026 - 07:54:13 | boerse-global.de
The contradiction at Xiaomi has rarely been starker. On one side, the company is preparing to unveil a custom chip that benchmarks put within striking distance of Qualcomm's next-generation Snapdragon. On the other, it is formally entering a shrinking electric-vehicle segment with a new brand while its delivery targets slip further from reach. The stock, meanwhile, sits at 2.72 euros — barely above its 52-week trough of 2.67 euros and down nearly 40 percent since January.
Xiaomi has won regulatory approval from China's Ministry of Industry and Information Technology to build extended-range electric vehicles (EREVs). The company plans to launch a second automobile marque called Skynomad, targeting the family-oriented SUV market. The first model, codenamed Kunlun N3, is a full-size SUV stretching over 5.3 meters with a battery pack exceeding 70 kWh. It offers a pure electric range of 400 to 500 kilometers and is priced at around 200,000 yuan, undercutting Li Auto and Aito models that typically start at 250,000 yuan. The official launch is scheduled for the second half of 2026.
The timing, however, is treacherous. Wholesale EREV sales plunged nearly 25 percent in May, marking the steepest monthly decline in five years. Segment share fell to 7.0 percent. Even Li Auto's flagship L9 suffered a 74 percent year-on-year delivery drop in the first four months of 2026. Li Auto and Huawei-backed Aito dominated the segment last year, accounting for seven of the ten best-selling EREV SUVs. Xiaomi's decision to enter this market with a second brand reflects a strategic choice to preserve the main Xiaomi nameplate's sporty, high-tech image while chasing a different demographic.
On the chip front, the company is making aggressive progress. President Lu Weibing confirmed during a livestream that the Xuanjie O3 processor will launch in the second half of 2026. Leaker Dingjiao Digital reports the chip bears the internal codename "Lhasa" and could be unveiled in September, though a separate leak points to August — the model number of the expected carrier device includes the code "2608," possibly referencing Xiaomi Day on August 8. The Xuanjie O3 breaks from conventional chip architecture, using a Prime-core-plus-Titanium-core-plus-Little-core configuration. The Prime core crosses the 4 GHz threshold for the first time, clocking at 4.05 GHz, while the Little cores reach 3.02 GHz — roughly 68 percent higher than the predecessor O1. Built on TSMC's N3P process, the chip is expected to score four million points on AnTuTu, placing it near the Qualcomm Snapdragon 8E5. The first device to carry it will be the Xiaomi MIX Fold 5, running HyperOS 4 and the MiMo AI model. Initial release will be limited to China.
Should investors sell immediately? Or is it worth buying Xiaomi?
The technological edge may prove short-lived. Both Apple and Qualcomm plan to move to TSMC's 2-nanometer process later in 2026, leaving Xiaomi one generation behind on N3P. To keep pace, Xiaomi has ramped research and development spending by 33.4 percent in the first quarter of 2026 to 9.0 billion renminbi, with a full-year target of roughly 40 billion renminbi.
At the stock exchange, none of this has moved the needle. The shares closed Friday at 2.72 euros, 39 percent below the start of the year and nearly 60 percent below the 52-week high of 6.69 euros. The relative strength index sits at 26.3, signaling technically oversold conditions. Short sellers piled on ahead of Q1 earnings, pushing bearish bets to a record. Short positions now represent roughly 9 percent of the free float, reflecting lingering concerns over rising memory costs and intensifying competition in China's EV market.
Delivery numbers add to the gloom. In the first five months of 2026, Xiaomi delivered 150,317 vehicles — a 13.5 percent increase year-on-year, but far from the pace needed to hit the annual target. To meet that goal, the company would require 34 percent growth for the full year. May contributed 32,759 units, up 17 percent from a year earlier but down 10.7 percent from April. Jefferies responded by slashing its own delivery forecast to 495,000 units and cutting the valuation multiple for the EV unit from 2.2x to 1.5x of projected 2026 revenue. The EV division posted an operating loss of 3.1 billion renminbi in the first quarter.
Xiaomi at a turning point? This analysis reveals what investors need to know now.
Lu Weibing has promised a new model on a completely new platform for the second half of 2026, but months separate regulatory approval from mass production. Whether the Kunlun N3 rolls off the line in meaningful volumes this year — and whether the Xuanjie O3 arrives on schedule in the MIX Fold 5 — will determine if investors regain any confidence or if the stock continues to drift near its floor.
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