The Hidden Human Cost of Xiaomi's EV Ambition: Implications for Investor Risk Assessment

In the race to dominate the electric vehicle (EV) market, Xiaomi has emerged as a formidable contender, leveraging its tech-savvy brand and aggressive expansion strategies. However, beneath the glossy veneer of innovation lies a troubling reality: a corporate culture of overwork and governance gaps that could undermine investor confidence. As Xiaomi's EV division pushes to meet ambitious targets, the human cost of its rapid ascent raises critical questions about long-term sustainability and risk exposure for shareholders.

The Overwork Culture: A Systemic Crisis

Xiaomi's EV division has been linked to a grueling "996" work schedule-9 a.m. to 9 p.m., six days a week-pushing employees to work an average of 10.5 to 15 hours daily, depending on the team, according to a Startup Story Media report. This unsustainable pace has led to widespread burnout, with reports of employees facing warnings or termination for taking a single day off, as noted in a Business Human Rights report. Tragically, the case of Wang Peizhi, a 34-year-old employee who collapsed and died after working over 11.5 hours daily on the EV store launch project, has drawn national attention, as reported by Startup Story Media. While local authorities ruled his death unrelated to work, his family and colleagues attribute it to the company's toxic workload.

Such practices echo broader trends in high-growth tech firms, where relentless innovation is often prioritized over employee well-being. For Xiaomi, this culture not only risks reputational damage but also exposes the company to potential regulatory scrutiny, particularly as Hong Kong's Stock Exchange (HKEX) tightens corporate governance standards, as noted in a Skadden report.

Corporate Governance Reforms: A Double-Edged Sword

The HKEX's December 2024 corporate governance reforms-mandating director training, board diversity, and risk management protocols-aim to address systemic issues in listed companies, as noted in the Skadden report. For Xiaomi, these reforms present both a challenge and an opportunity. While the company's EV division has yet to face direct regulatory action, the new rules could force a reevaluation of its governance structure, particularly as it seeks to scale operations and attract global investors.

The example of OpenAI, which is restructuring its for-profit arm into a Delaware Public Benefit Corporation (PBC) to balance profit with societal goals, as reported by a Cryptonomist report, offers a cautionary blueprint. By aligning governance with ethical priorities, companies can mitigate risks tied to labor practices and public trust. Xiaomi, however, has shown little indication of adopting similar measures, leaving it vulnerable to investor skepticism.

Investor Risks: Beyond the Balance Sheet

For investors, the implications are clear. Overwork culture and weak governance can erode productivity, trigger talent attrition, and invite legal or regulatory backlash. While no lawsuits against Xiaomi's EV division have been reported as of 2025, according to the Business Human Rights report, the absence of legal action does not eliminate risk. The UK's recent ZEV mandate revisions, driven by Nissan's warnings about job losses, underscore how regulatory environments can shift rapidly in response to labor and ethical concerns.

Moreover, the RenaissanceRe model-emphasizing board oversight, CEO performance reviews, and long-term strategy, as outlined in a Marketscreener report-highlights the importance of institutionalizing governance reforms. Xiaomi's failure to adopt such frameworks could alienate stakeholders, particularly as ESG (Environmental, Social, and Governance) criteria gain prominence in investment decisions.

Conclusion: A Tenuous Path Forward

Xiaomi's EV ambition is undeniably bold, but its reliance on a high-pressure, low-governance model threatens to undermine its long-term viability. For investors, the key lies in scrutinizing not just financial metrics but also the human and ethical costs embedded in the company's growth strategy. As the HKEX and global markets demand higher standards, Xiaomi must choose between doubling down on its current trajectory or embracing reforms that prioritize sustainability over speed. The stakes, for both employees and shareholders, have never been higher.