Xiaomi's Stock Plummets Over 4% After Fatal Accident Involving Intelligent Electric Vehicle
Xiaomi's stock price plummeted by over 4% in afternoon trading, primarily due to the company's disclosure of information regarding a severe traffic accident involving one of its vehicles, the SU7 standard edition. The accident, which occurred on a German highway, resulted in three fatalities. Although the cause of the accident is still under investigation, preliminary findings suggest that the vehicle was in NOA intelligent auxiliary driving mode at a speed of 116km/h before the driver took control and attempted to navigate through a construction zone, ultimately colliding with a concrete barrier at a speed of approximately 97km/h.

1 April 2025
This incident has not only tarnished Xiaomi's brand image but also sparked concerns about the safety of intelligent electric vehicles. As one of China's largest manufacturers of intelligent electric vehicles, Xiaomi's stock price decline has had a significant impact on the market, with the Hang Seng Tech Index retracting from a 1.8% gain to a mere 0.07% increase. The accident's repercussions on the company's business and revenue are likely to be closely monitored by investors.
Notably, Xiaomi's recent financial report revealed a 35.0% year-over-year increase in revenue, reaching 3659 billion yuan, and a 41.3% increase in adjusted net profit, totaling 272 billion yuan. The company's automotive business has exceeded expectations, with 2024 full-year revenue from innovative businesses, including intelligent electric vehicles, reaching 328 billion yuan. However, the accident may negatively impact Xiaomi's future growth prospects.
Standard & Poor's recent upgrade of Xiaomi's credit rating to BBB, with a stable outlook, reflects the company's strong debt repayment and profitability capabilities. Nevertheless, the accident may lead to a reevaluation of the company's credit rating, and investors should closely monitor the company's response and subsequent developments.
Investor reactions to the stock price drop have been mixed, with some expressing concerns about Xiaomi's overvaluation and potential further decline. The significant trading volume of over 110 billion Hong Kong dollars has led to increased scrutiny, and investors are reiterating their predictions of a further decline.

Some analysts predict that Xiaomi's stock may continue to fall, potentially dropping below 45 yuan, based on the observation that after Midea emptied its Xiaomi stocks, the stock price dropped directly to 47.1 yuan. The future trend of Xiaomi's stock requires close attention, and the psychological impact of significant market moves can influence investor confidence, potentially leading to further declines. As the situation continues to unfold, investors will be closely watching the company's response and subsequent developments to assess its long-term growth prospects.
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