Shares of Chinese tech giant Xiaomi plunged by 7.5% during trading on the Hong Kong Stock Exchange on Monday, following media reports of a serious traffic accident involving its new SU7 electric vehicle, Azernews reports.

According to reports from Chinese media outlets and eyewitness accounts shared on social media, the incident took place in Chengdu, a major city in southwestern China. The vehicle allegedly crashed and caught fire, with video footage showing bystanders frantically attempting - but failing - to open the car doors to rescue the driver. The intensity of the fire raised concerns about the safety design of the vehicle, particularly its electronic locking system.

While initial reports confirm that the driver was inside the vehicle at the time of the accident, it remains unclear whether there were any passengers. Local authorities have not yet released an official statement regarding casualties or the possible cause of the crash.

The SU7, Xiaomi's debut electric sedan, was launched earlier this year to much fanfare, touted as a direct competitor to Tesla's Model 3. The car gained attention for its sleek design, impressive range, and deep integration with Xiaomi's smart ecosystem. However, this incident could deal a serious blow to public confidence in the brand's automotive ambitions.

Industry analysts say that while the investigation is still ongoing, the negative publicity surrounding the accident may impact short-term sales and pose a challenge to Xiaomi's entry into the competitive EV market.

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