Xiaomi Founder’s Major Bet Signals Confidence in EV Breakthrough

At a pivotal moment for Xiaomi's stock performance, the company's founder and CEO Lei Jun has made a substantial personal investment, purchasing $13 million worth of shares. This strategic move increases his stake to 23.26% and comes as the Chinese technology giant announces an unexpected achievement: its electric vehicle division has reached profitability in just two years of operation.

Xiaomi's automotive segment has accomplished what eluded established competitors like NIO and Xpeng for years—achieving profitability remarkably quickly. The division reported a gross profit of $98.5 million on $4 billion in revenue during the third quarter of 2025, marking a significant industry milestone.

The electric vehicle business demonstrates impressive operational metrics:
* Production milestone of 500,000 vehicles, setting an industry record for new entrants
* Revised delivery forecast of over 400,000 units for 2025, up from initial projections of 350,000
* Exceptional demand with 240,000 pre-orders for the new YU7 model within 24 hours
* Strategic expansion into European markets planned for 2027

This rapid success stems from Xiaomi's integrated "Human x Car x Home" strategy, where the proprietary HyperOS seamlessly connects smartphones, smart home devices, and vehicles—creating a unique ecosystem advantage competitors cannot easily replicate.

Core Business Faces Market Challenges

While the electric vehicle division excels, Xiaomi's smartphone business confronts several headwinds. President Lu Weibing recently highlighted concerns about rising prices due to increasing memory chip costs. The company also identified what it terms "portfolio confusion" in the Indian market, attributed to an excessive number of models.

Should investors sell immediately? Or is it worth buying Xiaomi?

In response, Xiaomi is implementing a streamlined global strategy:
* Reducing its smartphone portfolio to fewer than 30 models worldwide
* Emphasizing artificial intelligence integration across devices
* Advancing development of its proprietary XRing 01 chip

Market analysts from Huatai have slightly lowered their profit expectations for the smartphone segment, reflecting intensified competition in the premium device space where Xiaomi battles both Apple and Huawei.

Market Reaction and Future Outlook

Investors responded positively to the dual developments of insider buying and EV profitability. Xiaomi shares closed at HKD 41.18 in Hong Kong, representing a 2.69% gain, while the German-listed stock advanced to €4.60.

Financial firm First Shanghai Securities maintains a buy recommendation with a price target of HKD 50.20, suggesting additional upside potential. The critical test ahead involves Xiaomi's ability to convert the substantial YU7 pre-orders into actual deliveries efficiently. With plans for a third manufacturing facility and European market entry, the company appears positioned for continued expansion.

Lei Jun's significant personal investment serves as a powerful vote of confidence, demonstrating the founder's belief in Xiaomi's strategic direction through tangible financial commitment.