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Investing.com-- Xiaomi (OTC:XIACF) shares fell sharply in Hong Kong trade on Tuesday as a raft of Chinese media reports showed several customers seeking refunds for their SU7 Ultra electric vehicle orders over allegedly false advertising.
Xiaomi Corp (HK:1810) shares slid as much as 4% to a low of HK$48.70, extending losses from the prior session and serving as a major weight on the Hang Seng, which lost 1.7%.
Chinese media reports showed hundreds of owners and potential buyers of the SU7 Ultra EV- Xiaomi’s luxury electric sedan- were seeking refunds or even cancelling their orders amid ire over allegedly false claims that Xiaomi made over a carbon fibre hood add-on for the vehicle.
The optional add-on costs about 42,000 yuan ($5,800), and appeared to be primarily decorative, as opposed to Xiaomi’s claims that it would increase airflow and cool certain components of the vehicle.
Several Chinese bloggers had called out Xiaomi since early-May for its allegedly misleading claims. The company had issued an apology last week, offering to either replace the part or give 20,000 loyalty points to affected customers.
In addition to the hood controversy, Xiaomi was also facing backlash over blocking certain driving modes in the SU7 Ultra.
The SU7 controversy somewhat muddies Xiaomi’s EV prospects, after the Chinese tech giant marked a strong entry into the sector over the past year.
A fatal crash involving an SU7 vehicle earlier this year had also drawn flak towards Xiaomi, particularly its claims of smart driving technology.
The company had rebranded its assisted driving software after the crash.
Still, the company has so far maintained its target to sell 350,000 EVs in 2025, after it clocked stellar sales growth in its debut year in the EV sector.