Xiaomi’s Q2 2026: The EV Mirage Hides a Shrinking Core

The Lede and the Real Story

Xiaomi’s Q2 2026 earnings call was a masterclass in selective storytelling. The headline numbers—RMB 108.9 billion in revenue and RMB 6.2 billion in adjusted net profit—were framed as evidence of a company in robust health, with management touting a record smartphone average selling price (ASP) and a 28.2% year-over-year surge in EV deliveries. But scratch the surface and a different picture emerges: revenue actually declined year-over-year, and adjusted net profit fell sharply from the prior quarter’s RMB 9.1 billion to RMB 6.2 billion—a 32% sequential collapse. The stock’s after-hours reaction—a 9.14% jump to $17.67—suggests investors bought the spin, but the numbers tell a more troubling story.

The real story is that Xiaomi’s core smartphone and IoT businesses are stagnating, and the EV segment—the supposed growth engine—is burning cash while contributing only a fraction of overall revenue. Management’s emphasis on EV growth and AI buzzwords masks a fundamental problem: the company’s traditional hardware margins are being squeezed, and its new bets have yet to prove they can generate sustainable profits. This is not a growth story; it’s a transition story with serious execution risks.