Xiaomi's shares fell sharply after the company unveiled new hybrid vehicles at lower-than-expected pricing.

Shares dropped 6.9% to 28.90 Hong Kong dollars, equivalent to US$3.68, by midday Friday, on track for their biggest one-day loss since March.

The selloff came after the Chinese smartphone and consumer-electronics maker unveiled its new vehicle line SkyNomad, and two new hybrid models under the new series. N90 is a full-size seven-seat sport-utility vehicle with a starting presale price of 299,900 yuan, equivalent to US$44,401, while the N70 model is a five-seat SUV with a starting presale price of 259,900 yuan.

Analysts say pricing for the new models are lower than market expectations.

"The selloff is largely due to profit-taking and market concerns over pressure on Xiaomi's margins due to the new models' low pricing," said CCB International analyst Qu Ke.

"Xiaomi's pricing is particularly disruptive," Bernstein analysts wrote in a note.

Citi forecasts combined N70 and N90 mature monthly sales of 5,000 to 30,000 units under an optimistic scenario.

Xiaomi entered China's EV market in 2024, and found some early success by leveraging brand loyalty from its smartphone customers and offering attractive EV pricing and design. Like its peers, however, Xiaomi is currently grappling with slowing sectorwide demand amid slugging domestic consumer sentiment and intense competition.

The company's EV business posted 5.1% revenue growth for the first quarter of the year.