Shares of Xiaomi Corp plunged on Friday as investors took profits following a strong run-up ahead of the launch of an updated SU7 electric sedan and the reveal of the company’s latest AI model.
Xiaomi stock declined 6.9% to HK$33.80, making it one of the weakest performers on the Hang Seng index, which slipped 0.6% that day. The drop followed a week in which the shares climbed as much as 12% ahead of Thursday’s product announcements.
On Thursday, Xiaomi introduced an upgraded SU7 model and launched its new flagship artificial intelligence model, MiMo-V2-Pro. CEO Lei Jun said the company plans to invest at least 60 billion yuan in AI over the next three years.
Investors focused closely on the pricing disclosed for the updated SU7. Xiaomi said the model will start at 219,900 yuan, with a Max variant beginning at 303,900 yuan. The company positioned the SU7 as a direct competitor to Tesla Inc’s Model 3.
Market participants flagged the SU7 pricing as a potential drag on margins. There is concern that rising costs for key electric vehicle components, notably chips and batteries, could compress profitability in the EV division, particularly as Xiaomi continues to price vehicles aggressively to compete with rivals such as Tesla.
Since entering the electric vehicle market in March 2024, Xiaomi has recorded strong sales. The first-generation SU7 has sold a cumulative 381,000 units. The company was viewed as having achieved profitability on its EV sales in the third quarter of 2025, but persistent margin pressure remained a focus for investors.
Looking ahead, Xiaomi is scheduled to report fourth quarter earnings next week. Analysts at S&P expect the pace of growth to moderate amid softness in the company’s core electronic devices division. At the same time, S&P projects revenue from EVs and AI initiatives to rise steadily, forecasting these areas will overtake the core device business in 2026 and become Xiaomi’s largest revenue contributor by 2027.
For now, the combination of near-term profit-taking in the stock and longer-term worries about EV margin sustainability has weighed on sentiment, leaving the shares among the weaker names on the Hang Seng following the product and pricing announcements.