Xiaomi’s stock experienced a significant downturn, reaching a six-month low following the circulation of harrowing video footage on Chinese social media depicting one of its SU7 electric vehicles engulfed in flames after a fatal crash. The incident, which occurred in Chengdu, has amplified scrutiny on the safety features of electric vehicles, particularly the controversial electronic door handles that proved difficult for bystanders to access during the emergency.
The fallout from the accident saw Xiaomi Corporation’s shares plummet by as much as 8.7% on Monday. This sharp decline marks a critical juncture for the company, which recently ventured into the highly competitive electric vehicle market with substantial expectations for its flagship SU7 sedan, positioned as a direct challenger to Tesla’s Model 3. The timing of this incident, coupled with prior reports of an SU7 crash, places considerable pressure on the company’s ambitious automotive plans.
Concerns surrounding the accessibility of vehicle occupants during emergencies have been rekindled by the SU7 crash. Bystander videos showed individuals struggling to open the car’s doors amidst the blaze, with reports suggesting a trapped occupant was unable to escape. This mirrors broader discussions about the efficacy and safety of electronically operated door handles, a design trend popularized by Tesla and adopted by other electric vehicle manufacturers.
The reliance on powered mechanisms for flush or concealed door handles raises potential risks. Malfunctions during collisions or power loss could impede egress, posing a critical threat when immediate manual access is paramount. Investigations into similar incidents involving Tesla Model Y door handles have been initiated by regulatory bodies, highlighting the persistent safety questions surrounding these advanced door systems. A Bloomberg investigation previously documented instances where Tesla vehicles failed to open after accidents or electrical issues, trapping occupants.
The potential implications for Xiaomi’s brand image are substantial, especially if the accident is attributed to hardware or software defects. Analysts have already pointed to the challenging investor sentiment surrounding new entrants in the EV sector, characterized by intense market competition and evolving regulatory landscapes in China. State media reports in China have also indicated regulatory considerations for restricting or banning fully concealed door handles in future vehicle designs, adding another layer of complexity for companies like Xiaomi.
Michael Zhang is a seasoned finance journalist with a background in macroeconomic analysis and stock market reporting. He breaks down economic data into easy-to-understand insights that help you navigate today’s financial landscape.