Xiaomi Shares Drop 8.7% After Fatal EV Crash Sparks Safety Backlash

Shares of Chinese technology company Xiaomi fell sharply on Monday after a fatal accident involving one of its electric vehicles sparked widespread alarm about safety features. The company’s stock dropped more than 5% in Hong Kong trading, at one point plunging nearly 9% before recovering some losses. It marked Xiaomi’s largest single-day decline since April.

The selloff came after images and videos circulated online showing a Xiaomi SU7 sedan engulfed in flames on a street in Chengdu. Eyewitnesses reported that bystanders were unable to open the car’s doors to rescue the driver trapped inside. Police said the crash, which involved another vehicle, resulted in the death of a 31-year-old man who was allegedly driving under the influence of alcohol.

Although the cause of the fire remains under investigation, the tragedy has revived concerns about electronic door handles, a feature now common in modern electric cars. Unlike traditional mechanical designs, these handles rely on sensors and electrical power, which can fail during a crash, fire, or power outage.

This is not the first safety controversy for Xiaomi’s EV division. Earlier this year, another SU7 accident raised questions about the car’s smart driving systems, leading to a similar drop in the company’s share price. Analysts say repeated incidents could slow Xiaomi’s momentum in the fast-growing but highly competitive electric vehicle market.

Reports from state-backed Chinese media suggest regulators are considering restrictions on electronic door handles due to mounting safety risks. Meanwhile, U.S. authorities have opened a separate probe into similar issues with Tesla’s Model Y, underscoring the growing global concern over EV design safety.

The latest crash adds fresh pressure on Xiaomi as it seeks to establish itself as a credible EV manufacturer alongside established players like Tesla and BYD. While the company has yet to comment publicly, investors remain cautious. The tragedy serves as a stark reminder that as automakers race to innovate, ensuring passenger safety must remain at the center of electric vehicle design.