Xiaomi Corp. confirmed that one of its SU7 electric vehicles was involved in an accident on an expressway in China. Local media reported that three people died in the incident that’s likely to spark scrutiny over the smart driving software deployed in many of today’s cars.

The technology giant’s stock fell as much as 6.3% in Hong Kong before closing 5.5% lower. The shares have slumped almost 18% since Xiaomi raised about $5.5 billion in an equity sale last week to help fund an expansion of its EV business.

“Investors might have concerns over Xiaomi’s competitiveness and growth outlook after reports of the car accident,” Shen Meng, director at Beijing-based investment bank Chanson & Co., said. The completion of the share sale has “also weighed on sentiment.”

Police arrived at the scene immediately and are now investigating the accident, which occurred on an expressway in Anhui province on March 29, Xiaomi said in a post on its Weibo account. Xiaomi’s statement didn’t include any details on fatalities or injuries, and representatives from the company didn’t immediately respond to additional questions.

According to Xiaomi’s initial report, the car’s advanced driver assistance function had been engaged less than 20 minutes before the crash. Alerts were issued because the driver apparently wasn’t holding on to the steering wheel. Seconds after another warning was sent about obstacles in the road and the driver then retook control of the wheel, the car crashed into concrete fencing on the side of the road.

The EV was engulfed in flames after the impact, with only some parts of the car, like the steel chassis, remaining in the fiery aftermath, local media reports said.

According to the company’s marketing materials, Xiaomi’s Navigate on Autopilot function can change lanes, speed a car up or down, make turns or brake with minimal human input. However, the company advises drivers stay alert to traffic conditions and reminds them that “smart-driving” isn’t the same as “self-driving.”

It’s illegal in China for drivers to take their hands off the steering wheel, even if advanced driver assistance is engaged.

Contemporary Amperex Technology Co. Ltd., which is the world’s biggest maker of EV batteries, said in a statement that “the Xiaomi car involved in the accident did not use CATL’s batteries.”

BYD Co., another large Chinese battery maker, said that any specific component information “needs to be provided by Xiaomi.” It added however that its unit, FinDreams Battery, only provides battery cells for Xiaomi cars while the automaker is responsible for designing the battery pack itself.

The driver assistance systems offered by Xiaomi, better known for its smartphones, and peers such as Xpeng Inc. and Huawei-backed EVs in China are similar to the technology that Tesla Inc. markets as Full Self-Driving.

The rollout of advanced driver assistance technology has led to concerns that some people are placing too much faith in the technology and not paying attention to the road. Tesla has faced several probes in the US into whether its partial-automation system is defective after multiple crashes, one of which resulted in a fatality.

The US automaker has also been involved in high-profile accidents in China, including one in 2021 when the owner of one of its cars jumped on top of a display vehicle at the Shanghai auto show and yelled that members of her family almost died because the car’s brakes failed.

Other automakers in China have faced scrutiny when their EVs have been involved in accidents too. Fires in EVs can be caused by a number of reasons, including battery quality and module design, as well as the sort of crash and impact.

Shanghai-based Nio Inc. recalled nearly 5,000 vehicles in 2019 after several of them started suddenly spewing smoke and flames. Ultimately, CATL claimed that the casing of the batteries in the cars in question was incompatible with the type of cells it had provided.

The accident could be a blow for Xiaomi’s car aspirations. It’s had near-instant success with its move into EVs, last month raising its 2025 sales target to 350,000 units.