BRIEF: Xiaomi discloses two EV fire incidents, further weighing on its shares
Xiaomi Group (1810.HK) on Tuesday disclosed fire accidents that occurred the previous day involving its electric vehicles (EVs), following up on an earlier pledge by founder and Chairman Lei Jun that the company would not shy away from public scrutiny.
According to Caixin, the two incidents occurred in Hainan and Henan provinces. The first involved a vehicle that caught fire at an auto repair shop while parked. The second occurred after a traffic accident on an expressway, with the vehicle in manual driving mode before the incident. In both cases, Xiaomi said no abnormalities were detected in the batteries prior to the fires, and no casualties were reported. The company added that it is cooperating fully with official investigations.
The disclosure weighed on Xiaomi’s shares, which fell 2.74% on Tuesday to close at HK$35.48, giving the company a market capitalization of HK$924.2 billion ($119 billion). Since peaking around a product launch last September, Xiaomi shares have fallen steadily from nearly HK$60, wiping out around HK$560 billion in market value.
In a bid to stabilize its stock price, Xiaomi has continued to step up share buybacks. Since launching a new round of repurchases in late November, the company has bought back shares for 32 consecutive trading days through Jan. 19, spending more than HK$7 billion. But the purchases still amount to less than 1% of its total, compared with its plan authorizing the repurchase up to 10% of its outstanding shares.
Lei Jun said during a New Year livestream on Jan. 3 that Xiaomi delivered more than 410,000 EVs last year, after an original target of 300,000 units was raised to more than 350,000 units. The company has set an ambitious delivery target of 550,000 vehicles for 2026 and hopes to once again surpass that goal by year-end. However, a spate of safety-related incidents has heightened market concerns over confidence in the brand.
Xiaomi‘s stock opened higher on Thursday but later turned down, closing at HK$34.8 by the midday break, down 1.75%.
By Lee Shih Ta
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