Xiaomi is deploying capital on two fronts to address a stark disconnect between its surging automotive business and its languishing stock price. The Chinese tech giant has initiated a significant share repurchase while aggressively expanding its electric vehicle division with high-profile hires and ambitious production targets.
The company disclosed a purchase of 4.5 million of its own B-shares on the Hong Kong exchange, investing approximately 144 million Hong Kong dollars. Such buybacks are typically a signal that management views the current share price as undervalued. The stock, trading around 3.46 euros, has shed nearly 23% since the start of the year, hovering close to its recent 52-week low of 3.38 euros hit in mid-April.
This market pessimism stands in sharp contrast to the operational momentum in Xiaomi’s EV segment. The division, which crossed into profitability last year, is now boasting a robust gross margin of 24%. To fuel further growth, Xiaomi has secured key industry talent, appointing Song Gang as Vice President and Chief of Staff for its EV unit. Song brings years of critical experience from overseeing production at Tesla’s Shanghai Gigafactory.
The automaker’s ambitions are quantified in steep delivery goals. After shipping roughly 80,000 vehicles in the first quarter, including over 20,000 in March alone, Xiaomi is targeting 550,000 deliveries for the full year. Hitting this annual target requires ramping up monthly production to an average of 52,000 units starting in April.
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Xiaomi’s strength is already evident in specific market segments. Its YU7 model has dominated China’s large SUV market for seven consecutive months, holding the top sales position. The company plans to showcase this expanding lineup alongside a new concept car, the “Xiaomi Vision Gran Turismo,” at the upcoming Beijing Auto Show. The high-performance concept is touted to feature all-wheel drive and over 1,300 horsepower.
Underpinning this automotive and technological push is a massive research and development budget exceeding 40 billion Renminbi for 2026, with a significant portion dedicated to artificial intelligence. The strategic aim is to create tighter integration across Xiaomi’s ecosystem of vehicles, smartphones, and home appliances. New patents for intelligent cockpit systems are also being secured to stabilize in-car connectivity and support the targeted production scale.
Investors have so far remained cautious despite the operational offensive. As the Beijing show opens, all eyes will be on whether Xiaomi’s dual strategy of financial engineering and aggressive expansion can finally convince the market to re-rate the stock.
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