Xiaomi Shares Drop After SU7 Launch Rally
Xiaomi shares dropped sharply on Friday as investors moved to lock in profits following a strong rally earlier in the week. The surge had been driven by anticipation surrounding the company’s updated SU7 electric sedan launch.
Despite the excitement, market sentiment turned cautious after the official unveiling, triggering a notable pullback in the stock.
Pricing Concerns Weigh on Investor Sentiment
Investor concerns emerged over the pricing strategy of the new SU7 model. Market participants fear that rising costs for key EV components, particularly semiconductors and batteries, could pressure profit margins.
Xiaomi shares fell 6.9% to HK$33.80, making it one of the weakest performers on the Hang Seng index, which itself declined by 0.6% on the day.
Strong Pre-Launch Momentum and AI Expansion Plans
Earlier in the week, Xiaomi stock had surged as much as 12% ahead of the SU7 launch event. During the announcement, the company also introduced its latest artificial intelligence model, MiMo-V2-Pro.
CEO Lei Jun revealed ambitious plans to invest at least 60 billion yuan (approximately $8.7 billion) into AI development over the next three years, highlighting Xiaomi’s long-term technology strategy.
SU7 Positioned to Compete with Tesla Model 3
Xiaomi confirmed that the updated SU7 will start at 219,900 yuan ($31,900), positioning it as a direct competitor to Tesla’s Model 3.
The higher-end Max variant will be priced from 303,900 yuan, offering enhanced features and performance within the lineup.
EV Growth Strong, لكن Margin Pressures Persist
Since entering the electric vehicle market in March 2024, Xiaomi has recorded strong sales momentum. The first-generation SU7 has achieved cumulative sales of 381,000 units.
Although the company reportedly turned profitable in its EV segment during the third quarter of 2025, investors remain cautious about sustainability due to tight margins.
Rising competition in the EV space and increasing component costs are expected to continue limiting profitability, especially as Xiaomi adopts aggressive pricing strategies to compete with Tesla.
Earnings Outlook and Future Growth Drivers
Xiaomi is scheduled to release its fourth-quarter earnings next week, with analysts expecting growth in its traditional electronics segment to slow.
However, revenue from electric vehicles is projected to grow steadily. According to S&P forecasts, Xiaomi’s EV and AI businesses could surpass its core electronics division by 2026 and become its primary revenue driver by 2027.
