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Xiaomi Faces Backlash as YU7 EV Buyers Confront Year-Long Delivery Delays

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Buyers of Xiaomi’s new YU7 electric SUV are voicing growing frustration after being told they may have to wait up to 60 weeks for delivery, despite paying a non-refundable deposit. The smartphone giant turned automaker received around 240,000 orders for the YU7 in the first 18 hours after sales opened last Thursday, but only a limited number of vehicles were available for immediate delivery.

By Tuesday, Xiaomi’s official app indicated wait times of 38 to 60 weeks, Reuters confirmed. More than 400 customer complaints have since been filed on the Sina Black Cat consumer complaint platform, with many saying they were unaware of the lengthy wait until after confirming their orders. Customers paid 5,000 yuan ($698) upfront and are now demanding refunds, citing concerns about EV tax exemptions expiring by year-end.

Xiaomi has not publicly responded, but CEO Lei Jun said he would address customer concerns in a livestream event on Wednesday via Weibo, where he has nearly 27 million followers.

The backlash mirrors earlier issues with Xiaomi’s first EV, the SU7 sedan, which debuted in March 2024. Though SU7 buyers initially faced seven-month delays, the car eventually outsold Tesla’s Model 3 in China from December onward. However, the SU7 brand image was hit by a fatal crash in March, and since then, Xiaomi has also faced complaints about unclear delivery schedules and optional feature configurations.

The YU7, Xiaomi’s second EV, is priced from 253,500 yuan ($35,360) — nearly 4% cheaper than Tesla’s Model Y, the best-selling SUV in China. Xiaomi has made clear its ambition to directly challenge Tesla’s dominance in China’s EV market.

To meet demand, Xiaomi is scaling up production at its Beijing factory, raising monthly output from 4,000 units in March 2024 to 28,000 in May, and is preparing to expand to two new factory sites nearby.

Still, unless transparency improves and production catches up, Xiaomi risks damaging its EV reputation — especially at a time when consumer trust and timely delivery are becoming major differentiators in China’s competitive electric vehicle landscape.

Xiaomi Boosts EV Delivery Targets Amid Surging Demand

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Increased Goals Reflect Growing Market Success

Xiaomi Corp has raised its 2023 electric vehicle (EV) delivery target for the third time, now aiming to deliver 130,000 units of its debut SU7 sedan. This is a significant increase from its initial goal of 76,000 when the car launched in March.

The SU7, inspired by Porsche designs, has captivated buyers with a starting price below $30,000, undercutting Tesla’s Model 3 in China by $4,000. Xiaomi’s success reflects broader trends in China’s EV market, where electric and plug-in hybrid vehicles accounted for over half of October’s auto sales, a 56.7% year-on-year increase.

Scaling Production to Meet Demand

Xiaomi has ramped up production since June, doubling shifts at its factories and introducing the premium SU7 Ultra, priced above $110,000. The company’s manufacturing facilities now have a capacity of 20,000 units per month, with room for further growth.

President Lu Weibing highlighted Xiaomi’s continued investment in both hardware and software to support new models and autonomous driving technology.

Financial Performance and Market Position

In the third quarter, Xiaomi reported revenue of 92.5 billion yuan ($12.77 billion), surpassing analysts’ expectations of 91.1 billion yuan. However, its EV unit remains unprofitable, recording a loss of 1.5 billion yuan for the quarter, despite a 17.1% gross profit margin.

Xiaomi’s smartphone division remains a cornerstone of its business, maintaining its rank as the world’s third-largest smartphone maker with a 14% market share and 42.8 million units shipped in Q3.

The company’s adjusted net profit rose 4.4% to 6.25 billion yuan, exceeding market estimates of 5.92 billion yuan.

Future Projections and Market Expansion

Analysts at Huatai Securities forecast Xiaomi will deliver 400,000 EVs in 2025, with EV sales projected to contribute 20% of revenue, compared to 8% this year. To support growth, Xiaomi plans to expand its retail footprint in mainland China from 13,000 to 15,000 stores by year-end and to 20,000 by 2024.

The company’s strategic push into EVs demonstrates its ambition to diversify revenue streams and solidify its position in the competitive Chinese market.