Beijing has given the green light for Xiaomi to build cars with range extenders, clearing the way for a second automotive brand even as the company’s shares sink toward a one-year trough and its electric vehicle unit burns through cash. The new sub-brand, Skynomad, marks a strategic shift from pure battery EVs into the plug-in hybrid space — but the timing could hardly be more precarious.
The first Skynomad model, codenamed Kunlun N3, is a full-size SUV stretching over 5.3 meters with a battery capacity exceeding 70 kWh. Xiaomi targets a pure electric range of 400 to 500 kilometers and a price tag around 200,000 yuan, undercutting rivals such as Li Auto and Aito, whose comparable models typically start at 250,000 yuan. The brand separation is deliberate: marketing large family SUVs under the Xiaomi name could dilute the sporty, high-tech image cultivated by the SU7 sedan.
Yet the broader EREV (extended-range electric vehicle) segment is contracting sharply. Wholesale volumes in May plunged nearly 25 percent — the steepest monthly decline in five years — paring the segment’s market share to just 7 percent. Even segment leader Li Auto saw deliveries of its flagship L9 collapse 74 percent year-on-year in the first four months of 2026. Li Auto and Huawei-backed Aito together accounted for seven of the ten best-selling EREV SUVs in 2025. Xiaomi now enters that fray.
The company is planning four new models for 2026: a revamped SU7 with 902 kilometers of range, a SU7 Executive Edition, and two EREV SUVs in five- and seven-seat configurations. President Lu Weibing confirmed during the first-quarter earnings call that a fresh platform would arrive in the second half of 2026 with “several derivatives.”
Delivery performance, however, is lagging ambition. In the first five months of 2026, Xiaomi handed over 150,317 vehicles — a 13.5 percent improvement year-on-year, but far short of the pace needed to hit the 550,000 annual target. Jefferies has cut its full-year forecast to 495,000 units and slashed the EV division’s valuation multiple from 2.2 times to 1.5 times projected 2026 revenue.
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The EV business remains a cash drain, posting an operating loss of 3.1 billion yuan in the first quarter. Meanwhile, Xiaomi is spending heavily on R&D: first-quarter outlays jumped 33.4 percent to 9.0 billion yuan, with a full-year budget of around 40 billion yuan and more than 26,000 employees dedicated to research and development.
None of this has impressed the market. Xiaomi shares closed at 2.72 euros, brushing against the 52-week low of 2.67 euros and shedding almost 40 percent since January. The relative strength index sits at 26.3, deep in oversold territory. A buyback program of up to 4 billion Hong Kong dollars, running through end-December 2026, has so far failed to stem the decline.
On the software front, Xiaomi is preparing HyperOS 4, based on Android 17. The management plans to unveil the new generation this summer, with a global rollout likely in October. The development team is ditching legacy code in favor of modern languages like Rust for core applications, aiming to boost memory security and unify design.
All eyes are on the second-quarter results due August 26. Goldman Sachs expects earnings to fall 50 percent, while Xiaomi must also show whether the delivery gap can narrow and whether Skynomad is more than a strategic promise in a shrinking niche.
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