Xiaomi shares plunge in their worst week in over three years following safety concerns tied to EV crashes

17 October 2025

A staff member cleans a Xiaomi SU7 electric vehicle displayed at the Beijing International Automotive Exhibition, or Auto China 2024, in Beijing, China, April 25, 2024. REUTERS/Tingshu Wang/File Photo

Shares in Chinese technology firm Xiaomi tumbled sharply last week, recording their steepest weekly decline in more than three and a half years amid safety concerns sparked by two notable accidents involving its electric vehicle model.

The drop was significant: over the week, Xiaomi’s stock price fell by 11.7 percent, concluding the week at HK$45.96, a level not seen since April. On that final trading day, the share price slid 3.7 percent, driving the company’s valuation lower and rattling investor confidence.

At the heart of the sell-off are reports of two recent incidents involving Xiaomi’s best-selling SU7 electric sedan. The first occurred in Wuhan, where a SU7 veered into oncoming traffic and collided with a van after allegedly suffering a break in its front wheel axle. Observers noted that the car had crossed multiple lanes and smashed through guardrails before crashing.

The second incident, in Chengdu earlier in the week, was more harrowing. A driver, suspected of operating under the influence, died in a collision involving a SU7 Ultra. Observers on the scene reported that bystanders attempted to open the car doors to rescue the occupant, but found them unresponsive the doors would neither open nor yield under pressure before the vehicle caught fire. In both cases, local authorities have issued statements about the crashes but stopped short of attributing them directly to Xiaomi, and the company has not publicly confirmed involvement.

These accidents have reignited scrutiny over the safety of Xiaomi’s foray into electric vehicles, particularly around assisted driving systems and vehicle structural integrity. The incidents come after Xiaomi previously issued a recall affecting over 115,000 SU7 units to address potential software issues related to its driver assistance features.

Despite the downturn, Xiaomi’s EV business had shown promising momentum. The SU7 sedan had, for months, been outselling Tesla’s Model 3 in China, at least on a monthly basis. But the recent stumbles now threaten to stall that momentum, as safety concerns take center stage and consumer and investor confidence wavers.

Analysts point out that in the EV market, success is increasingly tied not just to performance specs and pricing, but to the credibility of safety, reliability, and regulatory compliance. As Xiaomi pushes to expand its electric vehicle division and compete head on with established automakers, such incidents may prove costly not just in brand reputation but in sales, regulatory scrutiny, and capital markets.

Xiaomi’s CEO Lei Jun addressed the company’s broader role in the industry at a recent event, emphasizing the need to invest heavily in research and development and to prioritize safety. However he offered no direct commentary on either crash. In his remarks he also urged the company and industry to resist negative campaigns in digital spaces.

For now, risk perceptions have shifted. Investors may demand more transparency, better oversight, and clearer accountability from Xiaomi as it navigates this turbulent period. Whether the company can stabilize its position will depend on how it responds both through engineering fixes and through restored trust.