Xiaomi threatens late payers with order cancellation, faces backlash

IT-giant-become-automaker Xiaomi is caught in the middle of a preorder drama in China right now as buyers aren’t too thrilled with the idea of paying 100% up front.

According to Sohu.com, the company has recently begun sending warning messages to those who had paid the minimum deposit for their EV, but failed to follow up with the rest of the amount. The message goes as far as to claim that car assembly will stop and orders will be refunded for those who don’t pay 100% within 30 days from lacing the order.

In turn, many customers are taking to the Internet calling this practice customer-unfriendly. CarNewsChina points out that Xiaomi had originally promised to let every buyer inspect their EV in person before committing to the purchase. The company has seemingly reconsidered this policy now, effectively asking buyers to finalize the purchase and forfeit their chance to actually make sure their vehicle is in good order.

Making the situation worse is the fact that most Xiaomi EVs are on multi-week backorder right now, with certain trims taking several months to deliver. This means that the company is asking for full payment months in advance, something not everybody was prepared for.

According to the sales agreement, Xiaomi has a legal right to demand that. One of the paragraphs expressly stipulates that the company may demand full advance payment at any time depending on the current manufacturing or sales targets. Customers who fail to provide the remainder of the sum may be found in violation of the agreement, have their order unilaterally cancelled and their 5,000-Yuan deposit refunded.

We already have multiple reports of this happening. Some users go as far as to claim that Xiaomi failed to refund their deposit. The company has yet to speak on the situation, and Sohu.com claims it has declined comment so far.

The Chinese EV maker’s current portfolio consists of only two cars, a sedan called the SU7 and a crossover utility vehicle known as the YU7. In late July, the company admitted that it had more preorders for the YU7 than it could deliver on in a year. While this may sound alarming, Xiaomi is about to launch a second factory in late August that should ramp up the volumes quickly.