Xiaomi's YU7 Electric SUV Launch Faces Year-Long Delivery Delays: 240,000 Orders and Customer Outcry Stir Concerns in EV Market

In a surprising twist for buyers eagerly awaiting their new rides, Xiaomi (OTC: XIACF) has announced that customers of its recently launched YU7 electric SUV could face delivery delays stretching up to a staggering year. This news has triggered a flood of complaints, highlighting the challenges of rapidly scaling production in the competitive EV market.

Upon offering the YU7 for sale, Xiaomi reported a staggering 240,000 orders within just 18 hours. However, this overwhelming demand left many customers frustrated, as only a limited number of vehicles were available for immediate delivery. As of Tuesday, those checking the company's app discovered they might be waiting anywhere from 38 to 60 weeks to get behind the wheel.

This predicament has led over 400 buyers to express their discontent on the Sina (BitStamp: SINA) Black Cat consumer complaint platform. Many of these customers claimed they were not informed about the lengthy wait for their vehicles and are now seeking refunds. When placing their orders, buyers had to part with a non-refundable deposit of 5,000 yuan (approximately $698), adding to their frustration.

Many purchasers pointed out that the app only displayed estimated waiting times post-order confirmation, leaving them in the lurch without proper timelines. Additionally, they raised concerns over potential cost increases due to an impending expiration of tax exemptions for electric vehicles at the year's end.

While Xiaomi has yet to comment officially on the situation, their CEO, Lei Jun, took to his Weibo (NASDAQ: WB) account, vowing to address some customer queries during a livestream event scheduled for Wednesday.

For context, this is not Xiaomi's first rodeo in the automotive realm. The company made waves with the SU7 sedan launch last March, which faced delivery times of up to seven months initially but has since outpaced Tesla's (NASDAQ: TSLA) Model 3 in monthly sales in China since December.

The YU7, which is priced starting at 253,500 yuan (around $35,360), aims to rival Tesla's Model Y, the current frontrunner in the Chinese SUV market. With plans underway to ramp up production at its Beijing facility and additional factories in the pipeline, Xiaomi is determined to carve out a significant niche in the electric vehicle arena. Month-on-month production has shown considerable improvement, surging from 4,000 units in March to 28,000 in May.

As stock traders keep their eyes on the developments surrounding Xiaomi, they should be mindful that navigating supply chain complexities and consumer expectations in the EV sector can be as unpredictable as a Sunday drive in the rain. The company's response to these complaints and its subsequent handling of customer satisfaction will play a crucial role in its long-term reputation in this fast-evolving market.