Xiaomi's Skynomad Gamble: Entering a Shrinking EREV Market with a $28,000 SUV While the Stock Sinks
19.06.2026 - 18:47:00 | boerse-global.de
Xiaomi’s stock is trading just above its 52-week low of €2.67, despite the company launching the largest share buyback in its history and securing regulatory approval for a new vehicle category. The disconnect between corporate ambition and market sentiment has rarely been starker. Since the start of the year, the equity has shed nearly 40% of its value, and the summer 2025 peak of €6.69 now sits 59% away.
The fresh buyback mandate — up to HK$20 billion for Class B shares — began on June 2. Under the previous programme, Xiaomi had already repurchased almost 400 million shares for around HK$14.6 billion. Yet the stock barely flinched, closing at €2.71, within a whisker of its 12-month floor. The relative-strength index sits at 25.7, deep in oversold territory, but technical signals have done little to lure buyers.
The Electric-Vehicle Drain
Xiaomi’s automotive division generated 19.9 billion yuan in revenue in the first quarter of 2026, but recorded an operating loss of 3.1 billion yuan. That works out to roughly $5,600 in red ink for every vehicle delivered. The smartphone business offers scant relief: rising memory-chip costs have squeezed the gross margin to just 10.1%. Research and development spending jumped 33.4% year-on-year to 9.0 billion yuan in Q1, and the full-year R&D budget is pegged at around 40 billion yuan.
These mounting costs are what prompted Jefferies to downgrade Xiaomi to “Underperform,” citing ebbing EV sales, contracting smartphone margins, and rising component expenses. The brokerage cut its price target to HK$25.49, roughly €2.82 per share. Goldman Sachs has gone further, warning that the second-quarter report, due August 26, could show a 50% plunge in adjusted net profit. The bank’s caution centres on the same margin pressure that Jefferies flagged.
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A New Sub-Brand for Tough Terrain
In response to the challenges, Xiaomi has pivoted. China’s Ministry of Industry and Information Technology has approved the company to produce extended-range electric vehicles — a first for a firm that has so far only built pure battery EVs like the SU7 sedan and the YU7 SUV. The inaugural EREV model is the Kunlun N3, a full-size SUV stretching over 5.3 metres, equipped with a 1.5-litre range extender and a total range of roughly 1,500 kilometres, of which 400–500 kilometres is purely electric.
Xiaomi will market the Kunlun N3 under a new sub-brand called Skynomad, deliberately distancing it from the sporty image of the main Xiaomi Auto line. The target price is around 200,000 yuan — about $28,000 — undercutting rivals such as Li Auto and the Huawei-backed Aito, whose comparable models start above 250,000 yuan. Seven of China’s ten best-selling EREV SUVs in 2025 came from those two players. Xiaomi is banking on price leadership to break into a segment where it has no track record.
Timing Collides with a Shrinking Market
The EREV push comes at an awkward moment. China’s extended-range market contracted by nearly 25% in recent months — exactly as Xiaomi prepares to enter it. Meanwhile, the company’s 2026 delivery target of 550,000 vehicles — 34% more than in 2025 — looks increasingly difficult to meet. In the first five months of 2026, Xiaomi Auto delivered between 140,000 and 150,000 units, a growth rate of just 13.5% compared with the same period last year.
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May’s figure stood at 32,759 vehicles, 11% lower than April’s tally. The monthly record is 50,000 units, set in December 2025. To hit the annual target, Xiaomi would need to deliver roughly 57,500 cars per month from June through December — a pace it has never sustained. The company’s bet on the Kunlun N3, due for launch in the second half of 2026, may help fill the gap, but it is entering a contracting segment armed only with a low-price strategy. The next major test comes with the August 26 earnings release, when investors will see whether the EREV gamble and heavy R&D spending are beginning to pay off — or whether Goldman’s profit-warning proves accurate.
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