Xiaomi “lost” its position as the world's third largest car company and China's largest car company

In the latest data on the global automobile market value rankings, there has been a change that has opened the eyes of many people: Xiaomi Motors, which has always been considered to be the "number one in China", was suddenly "overtaken in a corner" by BYD. The two positions were reversed. BYD became the third in the world and the first in China, while Xiaomi retreated to fourth. Just a few months ago, this ranking was completely different. Xiaomi's market value was once as high as 1.5 trillion Hong Kong dollars, but now it only remains at more than 910 billion Hong Kong dollars, a full 40% drop. What happened to cause this to change so quickly? Is it the ruthlessness of the market or a mistake in corporate strategy? This issue is worth breaking down and talking about.

Back then, when Xiaomi entered the automotive field, many people started arguing. Those who support it say that this is like a young man who once made a name for himself in the mobile phone market. Now he is using his savings to enter the luxury car track. With technology and brand effect, he will reach the top sooner or later. Those who are skeptical believe that building a car is not a mobile phone. What is needed is long-term research and development and industrial chain accumulation. Although Xiaomi is fast, it will inevitably go fast and fall painfully. Nowadays, the changes in rankings seem to have become some kind of "answer", but it is hard to say whether this answer is the endgame. After all, market capitalization is like the weather: it can detect trends but cannot fully predict future climate.

The reason why Xiaomi's market value will soar between 2023 and 2026 is because of its amazing sales performance after the car was released. It has skyrocketed from more than 300 billion Hong Kong dollars to 1.5 trillion, an increase of up to 400%, and the speed is like a rocket. The enthusiasm in the capital market is real, and funds are pouring in like a tide, pushing stock prices to highs. However, the enthusiasm of the capital market is often fickle. As long as there is negative news, the tide will recede, even ruthlessly. By the second half of 2025, negative public opinion surrounding Xiaomi Motors was overwhelming: quality doubts, delivery delays, and after-sales disputes. These problems were like rapidly stacking clouds, making investors worry about whether the sunshine would leave, so funds quickly withdrew, and the market value plummeted.

At the same time, although BYD's performance has also encountered fluctuations, it is overall more stable than Xiaomi. Its advantage is that the industrial chain is already very deep, and batteries, power systems, and sales networks support each other. Even if there are short-term pressures, the market's confidence in it still exists. As a result, Xiaomi's decline became BYD's rise, and in the rankings, BYD easily surpassed Xiaomi and took the third position in the world and first in China.

From the perspective of ordinary people, the direct feeling brought about by this change may be that "you need to be more cautious when buying a car." Many consumers who originally went to see Xiaomi's cars because of the novelty of Xiaomi will have new ideas when they see the fluctuations in market value and reputation. A drop in market value does not necessarily mean that the product is poor, but it certainly means that capital's expectations for the future have changed. On the other hand, BYD's rising status will make some people feel that the experience of old brands is more valuable: it may not be as topical as Xiaomi, but stability is a hidden value.

The change seemed peaceful on the surface: the numbers on the list changed places, and the news was broadcast like this. But behind the capital, undercurrents are still surging. Investors are analyzing Xiaomi's financial report to see whether it can support the recovery of valuation; supply chain partners are confirming whether future orders are stable; consumers are also waiting for new models to see whether previous controversies can be changed. This calm is more like the calm before the storm. Every large fluctuation in market value may trigger the next round of discussions about industry trends. Will Xiaomi rebound? How long can BYD last? Who has the better chance in the global competition of new energy vehicles? These questions are far from settled.

Just when industry observers thought the story might end here, a new change broke the original rhythm: orders from overseas markets suddenly became the focus. According to sources, Xiaomi Motors’ testing in some overseas emerging markets did not go smoothly, and it encountered challenges with regulatory thresholds and localization channels, which cast a shadow on its global expansion plans. During the same period, BYD received good news. Its deliveries in some European countries have steadily increased, and it has received new orders for electric buses locally. At this time, the gap between the two companies is not only a numerical gap in market value, but also a gap in reputation in the international market. This reversal surprised many investors who had bet on Xiaomi in the early stage. They did not expect that Xiaomi would be led by its old rivals in the first round of cross-border competition.

The conflict was thus pushed to its most intense stage. Xiaomi emphasized that this is only a temporary setback and that overseas markets will take time to adjust, and it is preparing to launch new models with higher cost performance to reverse the situation; BYD used solid delivery results to speak for itself, showing that its scale and supply chain are more capable of resisting risks. Fans from both sides are also shouting at each other. One side says innovation is the core of the future, and the other side says stability is the key to making money. At this stage, the ranking is no longer just a number on a list, but a direct collision of two sets of car-making concepts.

As time continues to pass, the industry atmosphere seems to have returned to surface calm. While BYD is making steady progress, it has also encountered pressure from rising raw material prices; Xiaomi is working hard to adjust its strategy, but internal model iterations and software optimization progress still face challenges. Under this situation, new external competition obstacles have emerged. Other new domestic car-making forces and overseas giants have stepped up their efforts and will seize market share in the next few years. This has turned the situation that was originally a "two strong contenders" into a "multi-party melee." Mistakes by either party may cause a greater decline in rankings.

Divisions are also deepening. There are two completely different voices in the capital circle: one believes that Xiaomi has been dragged down by short-term public opinion, and as long as it survives the pain, it may overtake; the other believes that BYD's industrial chain moat is wide enough, and it will not be surpassed unless there is a major technological revolution in the industry. Ordinary consumers have also formed two choices in this disagreement. Those who prefer fresh and intelligent experiences are still waiting for Xiaomi's new cars, while those who value reliability and stability prefer BYD's mature products. In this way, the two companies are not only competing for the market, but also competing for the minds of users.

On the whole, Xiaomi's story is more like a TV series with a tight plot: in the first half, it made great progress and pushed itself to the top; in the middle, it encountered a plot reversal, facing doubts and decline; now it is in an adjustment period, and its future direction is uncertain. BYD, on the other hand, is like an experienced long-distance runner. He does not have explosive sprints, but has a stable rhythm and ultimately leads the race with endurance. Which of these two development models is more suitable for a big track like new energy vehicles? This is a question worth pondering.

Nowadays, many comments will praise BYD, saying that it is neither impatient nor impetuous and can steadily rise in the wave of trends; but if you think about it from another angle, this stability may also mean that in an era of ultra-rapid change, it lacks the passion for disruptive innovation. On the other hand, Xiaomi's decline can also be interpreted as short-term pain. If its new models and new strategies can really impress the market, a rebound is not impossible. Therefore, those who rush to conclusions may want to be more patient.

One final question: Do you think it is possible for Xiaomi to regain the number one position in China in the next three years? Or will BYD remain at the top until a new wave of technology emerges? Capital looks at trends, consumers look at experience. Which side are you on? Welcome to tell me your opinion.