Xiaomi's Two-Front War: EV Losses Balloon to $5,600 per Car as Smartphone Sales Forecast Crashes 28%
03.06.2026 - 16:24:00 | boerse-global.de
Xiaomi is contending with a punishing dual squeeze that leaves little room for error. On one side, its fledgling electric vehicle division is bleeding more cash than ever; on the other, its smartphone core faces a projected sales collapse nearly double the industry average. The stock, trading around €3.14 in Frankfurt, has shed 30% since the start of the year and hovers just above its 52-week trough of €3.04.
The EV business, once hailed as a growth engine, is proving to be a voracious consumer of capital. In the first quarter of 2026, the segment that includes electric vehicles, artificial intelligence, and other initiatives posted an operating loss of 3.1 billion yuan. With May deliveries topping 30,000 units, each car sold now represents roughly $5,600 in red ink — a staggering jump from the $900-per-vehicle loss recorded in the same period last year. Analysts attribute the explosion to heavy launch costs for new models and an intensifying price war in China's crowded EV market.
Simultaneously, the smartphone arm is buckling under external pressure. Total group revenue slid 10.9% year-on-year to 99.1 billion yuan in the first quarter, while adjusted net profit tumbled 43.1% to 6.07 billion yuan — the most pronounced quarterly decline in nearly three years. Industry researcher Counterpoint expects Xiaomi's global smartphone shipments to drop 28% in 2026, far outpacing a projected market contraction of 13.9% to 1.08 billion units. Samsung may see only a 4% dip, and Apple's numbers are expected to be broadly flat.
Should investors sell immediately? Or is it worth buying Xiaomi?
The culprit is a supply-side crisis. Geopolitical tensions have intensified a shortage of memory and logic chips, sending wholesale component prices up 14% in the first quarter alone — a direct hit to margins in Xiaomi's already thin-margin handset business. The company's "Quick Share" feature, which from June 1 adds AirDrop compatibility with Apple devices via the Xiaomi 17T Pro running HyperOS 3, offers a modest customer-retention tool but does little to address the structural drag on profitability.
The market's tone is distinctly cautious. On the first day of a newly approved buyback mandate covering up to 20 billion Hong Kong dollars over the next twelve months, Xiaomi repurchased roughly 100 million Hong Kong dollars' worth of shares. Yet the gesture has failed to arrest the slide. With the relative strength index at 76.8, the stock is technically overbought on short-term moves — a warning signal that carries extra weight given the fundamental headwinds.
Xiaomi's long-term hedge remains its EV ramp. Management is targeting 550,000 vehicle deliveries for the full year 2026, a feat requiring sustained two-shift factory operations. A European market entry is penciled in for 2027, part of a broader strategy to reduce dependence on China and chase premium positioning abroad. Whether rising production volumes can compress the per-car loss fast enough will become clearer when mid-year financials are published. For now, the numbers tell a story of a company fighting on two fronts, with neither yet turning decisively in its favor.
Ad
Xiaomi Stock: New Analysis - 3 June
Fresh Xiaomi information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
