CLSA expects Xiaomi's revenue and profit to trough in the third quarter of 2026 and recover in the fourth, after the SkyNomad range-extended SUV line sold out its first allocation in four minutes on Sept. 7. The same broker flagged that the vehicle ships without a full steer-by-wire chassis, leaving it short of China's mandatory L3 dual-redundant steering and braking rules from July 2027 — a gap no retrofit or over-the-air update can close.
Xiaomi's third vehicle line locked more than 10,000 orders in the four minutes after its Sept. 7 launch, a demand signal that now has to survive a production ramp, a 550,000-unit annual target and a July 2027 regulatory deadline the car's hardware cannot meet.
The SkyNomad series, Xiaomi's first range-extended SUV, drew the order book within four minutes of going on sale, founder and chairman Lei Jun said on Weibo. CLSA expects Xiaomi to deliver about 90,000 vehicles in 2026 and told clients revenue and profit should bottom in the third quarter of 2026 before rebounding in the fourth, maintaining an Outperform rating and a HKD35 target price.
The four variants run from 209,900 yuan ($31,300) for the five-seat N70 Pro to 299,900 yuan ($44,700) for the N90 Max Explorer, with the seven-seat N90 Max at 269,900 yuan. The two Max models landed 20,000 and 30,000 yuan below the presale prices Xiaomi set on July 30, deeper cuts than Chinese industry commentators had expected. All three core models pair a 1.5-litre turbocharged range extender Xiaomi calls the Kunlun with either a 52 kWh or 76 kWh battery; the flagship N90 Max claims 1,705 kilometres of combined CLTC range. Deliveries begin this month.
The stakes are arithmetic. Xiaomi delivered 30,153 vehicles in August, down 17.2% from 36,396 a year earlier and 3.6% below July, according to China Passenger Car Association data. That left 246,475 units through eight months, or 44.8% of the 550,000-unit goal, meaning Xiaomi must move 303,525 vehicles between September and December — about 75,900 a month. The highest monthly total the existing two-model lineup has ever posted was 50,212, in December 2025.
Locked orders are a commitment, not a shipment. Buyers pay a 5,000 yuan deposit that is refundable within three days if the order is not locked; near-stock vehicles take a 20,000 yuan deposit and deliver in one to five weeks. Xiaomi's Beijing plant only received regulatory clearance to build extended-range models in June, so the conversion rate depends on how fast that line ramps.
The demand itself looks real. Chinese media outlet Cailian reported in early August that pre-orders may have exceeded 100,000 units, an estimate not based on official data. CLSA said family buyers have responded to the expandable interior, while some consumers have raised concerns about the battery suppliers — CALB and Sunwoda — a brand-perception issue rather than a specification one. Xiaomi does not disclose which supplier equips which variant.
SkyNomad also marks Xiaomi's first move away from pure electric powertrains since the SU7 arrived in 2024, putting it directly against Li Auto and Huawei-backed Aito in the 200,000 to 300,000 yuan extended-range SUV bracket those two brands have dominated. Cumulative Xiaomi deliveries passed 800,000 units on Sept. 7, roughly 29 months after the SU7's first handover.
The structural problem sits underneath the launch. SkyNomad does not carry a full steer-by-wire chassis, so it does not meet the fail-operational dual-redundant steering and braking requirements in China's mandatory L3 national standard, which takes effect in July 2027. CLSA flagged that the hardware cannot be retrofitted and that vehicles already on the road will not reach compliant L3 capability through over-the-air updates.
That is a different class of risk from a pricing miss. Steer-by-wire replaces a mechanical column with electronic signals; dual redundancy means two independent paths so a single failure still leaves the driver with steering and braking authority. Adding that architecture after production means new chassis hardware, not a software patch — which is why the gap applies to the whole SkyNomad line and, by extension, to any Xiaomi model built on the same platform.
The financial picture is already strained. Xiaomi's "Smart EV, AI and Other New Initiatives" segment posted revenue of 23.9 billion yuan ($3.56 billion) in the second quarter, up 15.9% year over year, but the average selling price per vehicle fell 9.6% to 229,312 yuan ($34,200) as the higher-priced SU7 Ultra took a smaller share of the mix. Segment gross margin dropped to 19.2% from 26.4%, and the operating loss widened to 2.6 billion yuan ($387.4 million) — a second consecutive quarterly loss after the unit's first full-year operating profit in 2025. Chief Financial Officer Alain Lam attributed the ASP decline to product mix rather than a strategic shift.
Group-level numbers add pressure. Second-quarter adjusted net profit fell 42.6%, smartphone revenue slipped 7.5% to $6.2 billion and shipments dropped 26% to 31.2 million devices. Xiaomi has said it will spend EUR 24 billion on research and development through 2030 across artificial intelligence, operating systems, semiconductors and robotics, and signed letters of intent with eight German dealer groups including Emil Frey Germany and the Ernst Dello Group ahead of a European launch in 2027. Overseas EV sales remain off the table until the second half of 2027.
The premium push is the offset CLSA is underwriting. Xiaomi launched the 18 Fold — a foldable running its in-house XRING O3 processor on a 3-nanometre process, and the first phone anywhere with LPDDR6 memory — alongside the Pad 9 Pro Max, with management prioritising average selling price and gross margin over shipment volume. CLSA called 2026 still challenging for Xiaomi while describing the long-term moat as solid.
For investors, the trade is a timing question with a hard date attached. Xiaomi shares trade at EUR 2.83, about 57% below the 52-week high of EUR 6.54 set at the end of September last year and down 35% year to date, against CLSA's HKD35 target. The bull case needs SkyNomad to convert orders into deliveries fast enough to lift segment gross margin back above 20% and narrow the operating loss before the July 2027 standard forces a platform decision. The bear case is that the L3 gap caps the addressable life of the current hardware just as the company is spending EUR 24 billion a year on the next one.
This article is for informational purposes only and does not constitute investment advice.
