EV rivals tempt Xiaomi buyers with $700 deposit refunds

Xiaomi’s YU7, which debuted on June 26, saw high demand with the initial batch selling out quickly. As of Tuesday, delivery estimates on the Xiaomi app ranged from 38 to 60 weeks, Reuters reported, leading some buyers to reconsider their orders.

Sensing an opportunity, rival automakers such as Zeekr, Nio, and IM Motors have launched aggressive campaigns to lure Xiaomi buyers. According to CarNewsChina, Zeekr sales staff have been telling customers they won’t lose their deposits and have even provided guides on how to cancel Xiaomi preorders.

Viral screenshots circulating online show Zeekr sales staff assuring potential buyers they "do not need to worry about losing their deposit" and even providing step-by-step instructions for canceling Xiaomi orders.

Similarly, Nio sales staff have engaged in social media threads, proposing that Xiaomi deposits be transferred toward a Nio car purchase. This approach is not unprecedented. In April, when Xiaomi’s SU7 sedan first hit the market, EV maker Avatr reportedly displayed in-store posters promising assistance for customers canceling Xiaomi preorders.

Xiaomi YU7 SUV. Photo from Instagram

To address these challenges and growing customer frustration, Xiaomi chairman Lei Jun recently announced a limited-time offer allowing YU7 buyers to modify their vehicle configurations. From 10 a.m. on July 6 to midnight on July 7, buyers, excluding those eligible for immediate delivery, can adjust their orders or switch between the standard, Pro and Max variants. But the changes could alter production schedules and estimated delivery dates, Lei said.

China’s EV market has seen an escalating price war in recent months, drawing criticism from regulators for fostering "involution," or excessive, unproductive competition. On Tuesday President Xi Jinping led a high-level economic meeting calling for tighter oversight of "low-price, disorderly competition," according to a CNBC translation of state media.

He Xiaopeng, CEO of EV startup Xpeng, told Chinese media last week that the price war is just beginning, and "competition will become more intense in the next five years."

"This is just an ‘appetizer’ of what is to come."

Xiaomi, best known for its smartphones, entered the EV market last year with the SU7 sedan priced below U.S. company Tesla’s Model 3. The company expects its electric car division to turn a profit in the second half of this year and is positioning the YU7 to compete directly with Tesla’s Model Y.