Xiaomi's future in the electric-vehicle market hangs in the balance after a deadly crash involving its SU7 sedan sparked global safety concerns and wiped nearly 8 per cent off its share price, according to a report from AFP.
The company's stock fell as much as 8.7 per cent in Hong Kong on Monday, its steepest decline since April. The plunge came after shocking footage emerged on social media showing a burning Xiaomi SU7 in the southwestern Chinese city of Chengdu.
Police said the crash killed a 31-year-old male driver, surnamed Deng, who was suspected of drink-driving.
While authorities pointed to driver error, public anger focused on the car's design after bystanders were unable to open the doors to rescue the trapped driver before the vehicle was engulfed in flames.
The incident has intensified scrutiny of Xiaomi's expanding electric-vehicle ambitions, which are central to the company's plan to rival Tesla and BYD.
Locked-In Nightmare
Videos circulating on Weibo showed bystanders frantically trying to open the SU7's flush handles as smoke filled the cabin. Witnesses said the doors would not open after the crash disrupted the vehicle's power supply. Firefighters eventually extinguished the flames, but the driver was pronounced dead at the scene.
The tragedy has reignited debate about the safety of electronically actuated door handles, a sleek but controversial design feature now common in modern EVs. These systems rely on sensors and electric wiring rather than mechanical latches, which can make them vulnerable during crashes, fires or power failures.
Safety Under Scrutiny
In the United States, the National Highway Traffic Safety Administration is investigating reports that around 174,000 Tesla Model Y vehicles may experience similar door-handle failures in emergencies.
Chinese regulators are reportedly considering restrictions or a ban on fully concealed or retractable handles, citing concerns about rescue access when power is lost.
An earlier fatal SU7 crash earlier this year already prompted questions about the safety of Xiaomi's autonomous-driving systems.
The latest incident compounds those concerns and raises doubts about whether the tech giant has prioritised aesthetics and innovation over practicality and user safety.
Investor Confidence Shaken
The stock slump reflects more than market volatility. Analysts told AFP that the sell-off stemmed from both the emotional reaction to the viral images and a deeper unease about Xiaomi's long-term EV strategy.
One Hong Kong trader said, 'People saw a man trapped in a Xiaomi car he could not escape. That image sticks.'
Xiaomi has confirmed it is co-operating with police investigations but has not issued any further comment.
Analyst Kenny Ng of China Everbright Securities said the company's fundamentals remain strong and noted that investors may view declines toward the 250-day moving average as a potential buying opportunity.
Road Ahead: Crisis or Turning Point?
Xiaomi now faces the challenge of turning crisis into reform. Industry watchers expect the company to introduce clearer manual overrides, enhance safety training for dealers and customers, and work closely with regulators to rebuild confidence.
Despite the setback, Xiaomi's financial strength and integrated ecosystem connecting cars, smartphones and smart homes could still offer a competitive edge. Yet the Chengdu crash has underscored a crucial truth: innovation means little if it comes at the cost of human safety.
Whether Xiaomi can restore public trust and keep its electric dream alive will determine if the SU7 becomes a milestone in automotive progress or a cautionary tale about ambition outrunning caution.
