A court in Haikou, China, has ruled against Xiaomi in a high-profile dispute over vehicle pre-orders, ordering the company to refund a consumer double the amount of their deposit—a total of 10,000 yuan (approximately $1,400 USD). This decision marks what legal experts believe to be the first official judgment concerning Xiaomi Auto’s controversial practice of demanding full payment before vehicle delivery. The court found Xiaomi’s terms to be unfair and unreasonable, highlighting a growing concern over aggressive sales tactics in the competitive electric vehicle market.
The Case: A Breakdown of Events
The dispute centers around Ms. Li (a pseudonym), who placed a 5,000 yuan deposit ($700 USD) for a Xiaomi SU7 Max in July 2024. After a test drive, she was later pressured into immediate full payment (313,900 yuan or $43,900 USD) within a strict seven-day window, despite having previously agreed to a delayed production schedule. When Ms. Li, facing financial constraints, requested an extension, Xiaomi threatened to cancel her order and forfeit her deposit.
Despite Xiaomi’s own public statements assuring customers they could pay the balance after vehicle inspection, the company insisted on immediate payment, ultimately canceling Ms. Li’s order and retaining the deposit when she could not comply. Ms. Li pursued legal action after failing to resolve the issue through consumer channels.
Court Ruling: Unfair Contract Terms
The Haikou Meilan District People’s Court sided with Ms. Li, finding Xiaomi’s demand for immediate full payment before inspection to be an “unfair and unreasonable” contractual term. The court emphasized that this clause unfairly increased Ms. Li’s financial obligation while restricting her right to verify the vehicle’s quality.
Crucially, the court cited Xiaomi Auto’s own public Q&A statement from May 2024, which explicitly stated support for final payment after inspection. The court argued that this public commitment created a reasonable expectation of trust among consumers. By demanding immediate payment despite agreeing to delayed production, Xiaomi violated the principle of good faith.
Broader Implications: A Growing Trend?
This ruling arrives amid wider customer dissatisfaction with Xiaomi Auto’s pre-order system. The company’s low deposit requirements (5,000 yuan for the SU7, 20,000 yuan for the SU7 Ultra) initially fueled massive order volume. However, a recent drop in second-hand vehicle prices has led many customers to forfeit their deposits and purchase more affordable used cars instead, putting pressure on Xiaomi to enforce outstanding payments.
The company may be proactively requesting customers to pay earlier to mitigate potential losses from widespread order cancellations. This case underscores the risks of aggressive pre-order policies and the importance of clear, consumer-friendly contract terms in the rapidly evolving EV market.
This landmark decision sends a clear message: companies cannot exploit loopholes in their contracts to pressure consumers into unfair financial obligations. The court’s emphasis on good faith and public commitments will likely force Xiaomi and other automakers to re-evaluate their sales practices.
