Xiaomi shares plunge after fatal EV crash; police suspect drunk driving
The company’s shares may face short-term pressure, but police citing driver error could limit losses
[SHANGHAI] Xiaomi shares fell the most since April after reports that one of its SU7 electric sedan’s doors failed to open after a fiery crash early on Monday (Oct 13) in the southwest Chinese city of Chengdu, trapping at least one person inside.
The crash is suspected to have been caused by drunk driving, police said in a statement. Although authorities did not specify the vehicle model, Chinese media reports and videos on platforms like Weibo suggest it was a Xiaomi SU7 electric sedan. Footage showed the car engulfed in flames after the crash, with bystanders attempting unsuccessfully to rescue the driver.
Following a preliminary investigation, police said the driver – identified as a 31-year-old man surnamed Deng – was suspected of driving under the influence when he crashed into another car and veered over a planted median before the vehicle caught fire. Deng died at the scene, according to the statement.
Xiaomi’s shares dropped as much as 8.7 per cent on Monday. The company did not immediately respond to a request for comment.
The crash comes months after a fatal accident involving a Xiaomi SU7 EV on a Chinese expressway, which sent the company’s stock tumbling and raised questions about smart driving systems used in newer vehicles.
While the latest incident may pressure Xiaomi’s stock in the near term, the police statement suggesting driver error could help limit the decline, said Kenny Ng, a strategist at China Everbright Securities International.
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“Adding to the pressure is the current softness in the overall market, which could weigh further on the stock in the near term,” Ng said. He added that Xiaomi continues to make steady progress in EVs and smartphones, and its long-term fundamentals remain intact.
“If shares retreat towards the 250-day moving average, investors may find an attractive entry point,” he said.
The incident may also prompt renewed scrutiny of electronically-operated car door handles, like those popularized by Tesla. In September, the US National Highway Traffic Safety Administration launched a defect investigation into certain Tesla Model Y handles, while a top Chinese regulator is reportedly considering a ban on fully concealed designs.
The US probe announcement came days after a Bloomberg News investigation uncovered a series of incidents in which people were injured, or died, after they weren’t able to open doors when Teslas lost power – particularly after crashes. BLOOMBERG
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