Shares of Xiaomi Corp dropped as much as 8.7% to HK$47.5 on Monday, hitting their lowest level since April 30, after reports of a fatal crash involving one of its electric vehicles in China.
The decline marked the steepest single-day drop since April before the stock pared some losses.
Xiaomi was also the biggest percentage loser on both the benchmark Hang Seng Index, which fell 2.7%, and the Hang Seng Tech Index, which slid 3.5%.
The sell-off came after images and videos circulated on Chinese social media showing a burning Xiaomi SU7 sedan in Chengdu.
The footage appeared to show bystanders struggling to open the car’s doors to rescue an occupant as flames engulfed the vehicle.
Emergency personnel later extinguished the fire using a fire extinguisher, local reports said.
Chengdu police confirmed that the crash occurred after the SU7 collided with another sedan, killing a 31-year-old male driver suspected of driving under the influence of alcohol.
Witness reports suggest doors failed to open
Chinese outlet Yicai reported that the vehicle involved was suspected to be a Xiaomi SU7 Ultra that crashed and caught fire on Tianfu Avenue in Chengdu in the early hours of Sunday.
Dashcam footage indicated that the car had been travelling at 104 km/h moments before overtaking another vehicle and crashing.
Witnesses tried to force open the doors and windows but failed, the report said.
The latest incident echoes a similar fatal crash earlier this year involving a Xiaomi SU7 on a Chinese expressway, which prompted scrutiny of the carmaker’s smart driving systems.
Safety debate over electronic door handles
The Chengdu crash has reignited concerns about the safety of electronically-operated door handles, a feature popularized by Tesla.
The US National Highway Traffic Safety Administration (NHTSA) in September opened a defect investigation into certain Tesla Model Y handles after reports of failures.
A Bloomberg investigation also uncovered cases where passengers were unable to exit vehicles after losing power during crashes.
Unlike mechanical latches, electronic door handles depend on sensors and electric power, which may malfunction during fires or outages.
State-backed Chinese media reported in late September that regulators are weighing a potential ban on fully concealed electronic handles due to safety risks.
Analysts downplay broader risks to Xiaomi
Citi analysts said in a note that Xiaomi’s phase-two plant R&D building in Beijing had failed government inspection, but added that it was unrelated to EV production.
They maintained their view that Xiaomi remains on track to exceed its 2025 target of 350,000 vehicle deliveries.
The analysts also said the company is unlikely to face exposure to new US tariff risks.
Despite the reassurances, investor sentiment remains cautious as Xiaomi faces mounting scrutiny over the safety and reliability of its electric vehicles — particularly at a time when competition in China’s EV market continues to intensify.
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