Xiaomi shares see biggest drop since April after fatal EV crash sparks safety concerns

Chinese tech giant Xiaomi saw its shares fall over 5% on Monday, following reports that the doors of one of its electric vehicles failed to open after a fiery crash in China that left one person dead.

The stock slid as much as 8.7% in Hong Kong, marking its steepest drop since April, before paring losses after images and video of a burning Xiaomi SU7 sedan in Chengdu circulated on Chinese social media.

Video and eyewitness accounts showed bystanders trying but failing to open the doors of the burning car to rescue an occupant. Personnel at the scene eventually used a fire extinguisher to put out the blaze, local reports said.

Chengdu police said the crash occurred after the SU7 collided with another sedan, killing a 31-year-old male driver who was suspected of driving under the influence of alcohol.

Xiaomi, which manufactures consumer electronics, software and electric vehicles, did not immediately respond to CNBC’s request for comment.

The latest incident follows a fatal SU7 crash earlier this year that raised questions about the vehicle’s smart driving features and sent Xiaomi’s shares tumbling.

The crash could also intensify scrutiny on electronic door handles, a design popularized by Tesla and now common in modern EVs. 

Unlike mechanical models, electronic door handles rely on sensors and electricity and may fail during a fire or power outage.

China is considering a ban on such electric door handles to address safety risks linked to the feature, state-backed media reported in late September.

Meanwhile, the U.S. National Highway Traffic Safety Administration has launched an investigation into about 174,000 Tesla Model Y vehicles after reports of door handle failures.