Xiaomi reportedly loses appeal in SU7 Ultra “false advertising” lawsuit, facing potential massive compensation
In a legal development, the Suzhou Intermediate People’s Court in Jiangsu Province has upheld a lower court’s decision against Xiaomi Auto, rejecting the automaker’s appeal in a “false advertising” case involving its SU7 Ultra model.
The ruling maintains the original verdict in favour of the consumer, requiring Xiaomi Auto to refund the customer’s 20,000 yuan (2,800 USD) deposit, pay 126,000 yuan (17,640 USD) in compensation (three times the optional accessory price), and cover 10,000 yuan (1,400 USD) in legal fees, according to Chinese auto website Autohome.
The dispute originated from a customer’s claims that the Xiaomi SU7 Ultra’s advertised “replicated prototype dual-duct design” and “dual-duct direct airflow to wheel hubs, supporting wheel hub heat dissipation” were misleading.
The customer, who had already taken delivery of the vehicle, found that the optional 42,000 yuan (5,880 USD) carbon fibre vented hood neither provided airflow guidance nor improved heat dissipation. A comparative disassembly revealed that its internal structure was almost identical to a standard aluminium hood, offering only a marginal weight reduction of 1.3 kilograms. The consumer argued that Xiaomi Auto had engaged in deceptive advertising.
Earlier this year, on May 7, Xiaomi Auto offered a resolution to the concerns surrounding the functionality of the SU7 Ultra’s carbon fibre dual-duct front hood. The company proposed two solutions: for undelivered orders, a limited-time option to switch back to an aluminium front hood would be provided. For customers who had already taken delivery or locked in their orders for the carbon fibre dual-duct front hood before the limited-time modification period ended, Xiaomi Auto offered 20,000 points (worth 2,000 yuan or 280 USD)as a gesture of goodwill.
However, these solutions were not accepted by the affected owners and prospective buyers, leading to the initiation of legal proceedings.
The Suzhou Intermediate People’s Court in Jiangsu Province subsequently heard the jurisdiction objection case concerning product seller liability disputes between Suzhou Xiaomi Jingming Technology Co., Ltd. (a relevant entity of Xiaomi Corporation) and the user. After the user won the initial lawsuit regarding the vehicle down payment, Xiaomi Corporation filed an appeal, which the Suzhou Intermediate People’s Court has now dismissed, upholding the original judgment.
Editor’s comment
As per our previous report, at least 300 people in an online advocacy group are demanding refunds and corresponding compensation from Xiaomi. For Xiaomi, these users will undoubtedly follow in the footsteps of this user who won the case, which will incur a significant expense for the company.
