Xiaomi Shares Drop Amid EV Refund Demands Over Misleading SU7 Ultra Claims

Xiaomi (OTC:XIACF) stock dropped sharply in Hong Kong on Tuesday, falling as much as 4% to HK$48.70, after widespread backlash over its SU7 Ultra electric vehicle. The controversy weighed heavily on the Hang Seng Index, which declined 1.7%.

Multiple Chinese media outlets reported that hundreds of customers are requesting refunds or canceling their orders for Xiaomi's SU7 Ultra EV, a premium electric sedan, citing allegedly deceptive advertising. At the center of the criticism is a ¥42,000 ($5,800) carbon fiber hood add-on that Xiaomi claimed would enhance airflow and cooling. However, consumer reviews and popular Chinese bloggers revealed the part appears to be purely cosmetic.

Following the outcry, Xiaomi issued a public apology and offered customers either a replacement part or 20,000 loyalty points. But criticism has continued to mount, with additional complaints about blocked driving modes on the SU7 Ultra, further fueling consumer dissatisfaction.

Earlier this year, a fatal accident involving an SU7 vehicle sparked scrutiny over Xiaomi’s autonomous driving technology. The company responded by rebranding its assisted driving system to distance itself from negative perceptions.

Despite the setbacks, Xiaomi has not revised its ambitious EV sales target of 350,000 units for 2025. The tech giant had enjoyed strong momentum in its debut year in the electric vehicle sector, but the ongoing issues could dampen its growth prospects in the increasingly competitive Chinese EV market.

With growing consumer concern and regulatory pressure, Xiaomi’s EV strategy now faces a critical test, as reputation and trust will be key to sustaining its foothold in the automotive industry. Investors and consumers alike will be closely watching how the company addresses product quality and transparency moving forward.