The Xiaomi YU7 has quickly become a sensation in the automotive industry, following the success of the Xiaomi SU7. Yet, the soaring demand has also exposed Xiaomi Auto’s most pressing challenge—limited production capacity. On the Xiaomi Auto App, the YU7 standard version currently shows the longest delivery time, estimated at up to 15 months. Even the Max version, which boasts the shortest wait, may still take around 9.5 months to reach customers.
Currently, Xiaomi only operates its Phase I vehicle factory in Yizhuang, Beijing. This facility alone cannot handle the high volume of orders for both the SU7 and YU7. According to information from Xiaomi’s HR suppliers, the company is now ramping up recruitment for its second-phase factory, which is nearing completion. Employees are expected to work in two shifts, 11 hours a day, as Xiaomi prepares for large-scale mass production.
Due to these production delays, rival car brands have seized the opportunity to lure Xiaomi customers. Several competitors have launched deposit reimbursement campaigns aimed at Xiaomi YU7 lock-order users. These promotions promise to cover the 5,000 yuan deposit if users switch to their vehicles instead.
Lei Jun, Xiaomi’s founder and CEO, expressed enthusiasm for the YU7’s reception, stating that the sales figures have exceeded expectations. Within the first three minutes of launch, Xiaomi received over 200,000 orders. That number surged to 289,000 within an hour and hit 240,000 locked-in orders within just 18 hours. Despite this record-breaking success, Xiaomi’s customer service confirmed that deposits become non-refundable once the seven-day hesitation period passes and the order is locked.
To reassure customers, Lei Jun and other executives, including Xiaomi’s PR head Wang Hua, posted several updates on Weibo. They emphasized that the estimated delivery times are dynamic and will be updated as production ramps up. Executives reiterated their commitment to expediting production and getting cars to customers as quickly as possible.
Xiaomi’s factory expansion plans aim to alleviate these issues. The existing Yizhuang plant has a designed annual capacity of 150,000 units. From June 2024, the plant adopted a double-shift model, with one car reportedly rolling off the assembly line every 76 seconds. However, even this efficiency cannot meet the demand for both the SU7 and YU7 models.
Xiaomi’s second-phase factory officially wrapped up construction in June and is expected to begin production in July. Recruitment is already underway for roles including operators, drivers, and general workers. Jobs are open to males aged 18 to 38, with a wage of 230 yuan per day. Moreover, Xiaomi is already planning a third-phase facility. In March, officials designated 52 hectares next to the Phase II plant for industrial expansion. In June, Xiaomi acquired new land for 635 million yuan to support a new energy intelligent vehicle and parts production site, potentially the future Phase III plant.
Meanwhile, Xiaomi’s success has caught the attention of rivals. Leapmotor’s chairman, Zhu Jiangming, admitted feeling competitive pressure after witnessing the overwhelming order volume. Xpeng CEO He Xiaopeng publicly congratulated Xiaomi and even placed a YU7 order himself. Lei Jun responded appreciatively, promising faster deliveries.
However, not all reactions were cordial. NIO’s senior VP Shen Fei used the opportunity to promote the Ledao L60, claiming it offered more space and better value than the YU7. A more controversial statement came from Dongfeng Nissan’s head of power development, Huang Zhaokun, who criticized Xiaomi’s long delivery times and compared the strategy to a flawed mobile phone approach. After facing backlash, he deleted the post and issued an apology.
On launch day, Hongmeng Zhixing’s Zhijie brand announced major subsidies on their entire lineup, offering up to 60,000 yuan in car purchase benefits, including a 20,000 yuan cash rebate. Tesla also responded by upgrading the specs of its Model 3 and Model Y long-range versions, signaling a clear move to challenge Xiaomi’s pricing and performance claims.
Adding to the pressure, several brands like Avita, Zhiji, and Jikrypton have launched campaigns to reimburse Xiaomi YU7 deposits. Salespeople are actively promoting these incentives on social media, urging Xiaomi users to jump ship. Some even promised faster delivery and additional perks to secure new customers.
While the Xiaomi YU7 continues to dominate headlines and capture the public’s imagination, the combination of long wait times, refund limitations, and fierce competition poses a significant challenge. Whether Xiaomi can retain its locked-in customers and fulfill its record-breaking orders depends largely on how quickly it can scale up production across its expanding factory network.
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