Xiaomi shares plunge 9% after fatal SU7 crash in Chengdu

Following a fatal car crash in Chengdu, China, involving Xiaomi’s SU7 EV, the company’s shares plunged by nearly 9%. The Xiaomi SU7 sedan’s accident brought back concerns about the safety of electric vehicles. 

Xiaomi Corp. shares fell sharply on Monday, hitting their lowest level since April, after it was reported that one of its SU7 electric sedans was involved in a fatal crash in the southwestern city of Chengdu. The company’s stock dropped as much as 8.7% as videos of the incident spread rapidly across Chinese social media platforms.

Xiaomi’s stock plunged to its lowest level since April after videos of a fatal accident spread on Chinese social media. Source: Google Finance

Xiaomi shares decline after SU7 crash

According to multiple Chinese media outlets, including National Business Daily and Dahe Daily, the SU7 crashed and burst into flames early Monday morning. Footage circulating on Weibo, a Chinese social media platform, shows the vehicle engulfed in fire as bystanders attempted to pry open its doors.

Reports said at least one person, who is believed to be the driver, was trapped inside the car and could not be freed before the flames spread.

Authorities in Chengdu have not released official details regarding fatalities or injuries, and Xiaomi has not yet issued a public statement.

Xiaomi entered the electric vehicle market earlier this year with high expectations, but this incident, coupled with an earlier fatal SU7 crash, has put a lot of pressure on the company. The SU7 sedan was launched as the company’s flagship EV and has been marketed as a direct competitor to Tesla’s Model 3.

Growing concerns about electric door handles

The crash has also reignited debate about the safety of electronically operated car doors, particularly those with flush or fully concealed handles. These designs, popularized by Tesla, rely on powered mechanisms that may fail during a collision or power loss, and it can prove fatal in situations where users or rescuers need quick manual access.

In September, the National Highway Traffic Safety Administration (NHTSA) opened an investigation into certain Tesla Model Y door handles following a string of incidents in which occupants were unable to exit vehicles after accidents.

A separate Bloomberg investigation reported multiple cases of people being injured or killed when Tesla doors failed to open after crashes or electrical malfunctions, leaving them trapped inside vehicles that caught fire.

In China, state media reports have indicated that a top Chinese regulator is considering restricting or outrightly banning fully concealed door handles in future vehicle models.

Monday’s crash has prompted fears that Xiaomi’s image could suffer lasting damage, particularly if the cause of the accident is discovered to be related to hardware or software issues.

Analysts have also already noted that new EV entrants are receiving lukewarm attention from investors due to the intense competition in the space and China’s tightening regulations.

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