Xiaomi Shares Plunge After Fatal EV Crash Raises Safety Questions

Shares of Chinese tech titan Xiaomi (1810.HK) experienced a sharp downturn of over 5% on Monday, triggered by reports of a fatal incident involving its SU7 electric vehicle. The setback comes amidst ongoing concerns regarding EV safety features and the broader adoption of advanced technologies in the automotive sector.

The Hong Kong-listed stock plunged as much as 8.7% in early trading, marking its most significant intraday decline since April, before partially recovering. The sell-off was precipitated by images and videos circulating on Chinese social media depicting a burning Xiaomi SU7 sedan in Chengdu. The incident has reignited the debate surrounding emergency egress in electric vehicles, particularly in the event of a collision.

Eyewitness accounts and video footage indicate that bystanders were unable to open the doors of the burning vehicle to rescue the occupant. First responders eventually extinguished the fire using a fire extinguisher, according to local reports. The Chengdu police department stated that the incident occurred when the SU7 collided with another sedan. The 31-year-old male driver of the SU7 was killed in the crash. Authorities suspect the driver was under the influence of alcohol at the time of the incident. An investigation is currently underway.

Xiaomi, a diversified conglomerate spanning consumer electronics, software, and electric vehicles, has yet to release an official statement regarding the incident. This latest event follows a previous fatal SU7 crash earlier this year that cast doubt on the vehicle’s autonomous driving capabilities and resulted in a negative market reaction for Xiaomi’s stock.

The recent crash is likely to amplify scrutiny of electronic door handles, a design element pioneered by Tesla and increasingly prevalent in modern EVs. While offering a sleek aesthetic and potentially improved aerodynamics, electronic door handles present a potential safety risk. Unlike traditional mechanical door handles, these systems rely on sensors and electrical power, potentially becoming inoperable in the event of a fire or power outage. This concern becomes especially critical in crash scenarios where rapid egress is imperative.

The incident comes at a time when regulators are actively assessing the safety of such features. Earlier this year, Chinese authorities were reportedly contemplating a ban on electric door handles to mitigate safety hazards. In the United States, the National Highway Traffic Safety Administration (NHTSA) has launched an investigation into Tesla Model Y vehicles, prompted by reports of door handle failures. The investigation encompasses approximately 174,000 vehicles, raising crucial questions about the reliability and safety of electronically actuated door systems in emergency situations.