Xiaomi’s Ambitious EV Target Faces Headwinds Despite Strong Start

Xiaomi’s bold goal of delivering 550,000 electric vehicles in 2026 is encountering significant challenges, according to recent sales data. The company’s EV division reported a delivery figure of just over 20,000 units for March, a sharp decline from the more than 50,000 vehicles delivered in December. This slowdown creates a substantial gap that must be closed to achieve the annual target.

A Tale of Two Models: SU7 Success vs. YU7 Concerns

The delivery dip is largely attributed to a model transition for the SU7 sedan. The updated version, which began deliveries on March 23, has been met with strong consumer demand, contributing 7,000 units already. Locked-in pre-orders for this model even surpassed the 40,000 mark in early April. Positioned as a direct competitor to the Tesla Model 3 in its home market, the revamped SU7 features an 800-volt architecture and an aggressive starting price of 219,900 yuan.

In contrast, the YU7 SUV is showing warning signs. Waiting times for this model have collapsed dramatically, falling from a peak of up to 56 weeks to just 7-14 weeks currently. This erosion of the order backlog is mirrored in weekly booking statistics. Data from Goldman Sachs indicates orders in the final week of March plummeted by 61% compared to the prior week.

Should investors sell immediately? Or is it worth buying Xiaomi?

Strategic Countermeasures and Core Business Stability

To counteract this downward trend, Xiaomi is preparing a broad product offensive. The company’s plans for 2026 include launching four to six new vehicle models. Furthermore, the appointment of former Tesla China executive Kong Yanshuang is intended to streamline operations and boost sales effectiveness.

Away from the volatile automotive sector, Xiaomi’s core business provides a solid foundation. The company sold 165.2 million smartphones and achieved a record market share of 27.1% in China’s premium segment. Its ecosystem expansion continues in parallel; a global fan festival is currently supporting the rollout of smart-home products into 14 additional markets. Excluding smartphones, Xiaomi’s proprietary IoT platform now connects over one billion devices.

The Path Forward

Xiaomi’s management now faces the urgent task of bridging the gap between the year’s strong initial momentum and the current cooling of demand for the YU7. The successful and timely market introduction of its planned new EV models is critical. Without it, the stated annual delivery target of 550,000 vehicles for 2026 appears increasingly distant.