Xiaomi founder Lei Jun used a recent livestream to both soothe public concern and roll out an aggressive sales measure: a seven‑year, low‑interest financing option for the company’s YU7 electric vehicle, with advertised entry thresholds that allow customers to put down less than RMB 50,000. Speaking directly to an audience attuned to every word he utters, Lei thanked supporters who had defended Xiaomi in recent days and pleaded with media and influencers not to use sensational, negative headlines about the company.
The announcement comes amid heightened scrutiny of Xiaomi’s fledgling car business. In recent weeks the company has battled a spate of critical coverage and social‑media storylines about price cuts and second‑hand market performance for its SU7 sedan, including social chatter citing sharp depreciation on some listings. Lei publicly accused some used‑car traders and commentators of manufacturing bad headlines for clicks, and has repeatedly defended the SU7’s residual value and engineering credentials.
Xiaomi’s decision to subsidize purchase costs through extended, low‑cost credit mirrors a broader pattern in China’s EV market, where manufacturers increasingly use financing and leasing to move inventory and expand the buyer pool. Lowering the upfront cash requirement is one of the fastest levers available to stimulate retail sales, especially for a company better known for consumer electronics than for capital‑intensive automobile manufacturing.
The move has immediate tactical logic: reduce the financial barrier for prospective buyers, blunt negative resale narratives by keeping more cars in retail channels, and sustain the SU7/YU7 momentum against established rivals such as BYD, NIO and Tesla. But the strategy brings risks. Prolonged low‑interest financing can compress margins, increase balance‑sheet exposure to auto loans, and postpone rather than solve questions about product desirability and long‑term resale values.
For Xiaomi, the YU7 financing scheme is also strategic signalling. It shows a willingness to apply the company’s Internet‑era playbook — tight community engagement, rapid promotional pivots and sales incentives — to automotive retail. That approach may buy time for Xiaomi to tune product features and after‑sales support, but it will test investor patience and regulatory scrutiny as the company scales financing operations and after‑market services.
How this plays out will depend on demand elasticity and how competitors respond. If the financing package succeeds in boosting retail uptake without excessive margin sacrifice, Xiaomi can entrench its brand in China’s crowded EV market. If not, the company risks becoming locked into subsidy‑led growth that masks underlying product or market positioning weaknesses.