Xiaomi's early EV success marred by payment controversy

Xiaomi made a huge splash entering the world of electric cars. Its first model, the sleek SU7 sedan, was followed by the YU7, which was met with enthusiasm and a long list of pre-orders. But for a growing number of those early customers, the initial excitement is turning into frustration as they face an unexpected and uncomfortable demand from the company: pay in full now for a car you might not see for many months.

Several customers in China have voiced their concerns on social media, explaining that Xiaomi is requiring them to pay the entire remaining balance for their vehicle weeks or even months ahead of their scheduled delivery date. According to reports from Chinese media, buyers are being told their orders will be "suspended from production" if they fail to pay up.

This leaves them with a difficult choice: hand over the full price of the car long before it arrives, or risk having their order canceled and losing their RMB 5,000 (approximately $700) deposit. Some affected customers report being 22 to 25 weeks away from their estimated delivery window, yet they have already received these final payment notices.

This policy appears to be a complete reversal of the company's earlier messaging. On its official WeChat account, Xiaomi had previously assured the public that it supported a process where customers could inspect their new vehicle first before paying the final balance. This practice of paying after inspection, or at the very least at the time of delivery, is standard across the industry.

How can Xiaomi make such a demand? The answer lies in the purchase agreement that customers must accept to secure their order. Buried within the terms and conditions is a clause that gives Xiaomi the right to request the final payment at any point, based on its own "vehicle production arrangements or sales situations."

The contract further states that if a customer fails to pay within seven days of receiving the notice, they are in "fundamental breach of contract." This gives Xiaomi the legal grounds to cancel the order and keep the deposit. Many customers now argue that this is an unfair term, one they had no choice but to accept if they wanted to buy the car.

Xiaomi officials have declined to comment on the matter, but the long delivery wait times for the YU7 have been the company's biggest issue for the past few weeks, and some speculate this could be a strategy to manage the lengthy queue. By asking for a full payment early, the company might be trying to weed out customers who are either not fully committed or who might be speculators looking to flip the car for a profit.

Whatever the reason, this approach risks damaging the trust Xiaomi is trying to build. Entering the EV market is incredibly difficult, and a brand's reputation is one of its most valuable assets. While both the SU7 and YU7 have been praised for design and technology, these early stumbles in customer experience could leave a lasting negative impression.