Some Xiaomi SU7 owners encounter high insurance renewal costs and hesitant insurers

A year after its highly anticipated launch, the Xiaomi SU7 is again in the spotlight, as the first wave of owners approach their car insurance renewal dates. According to reports from Chinese media outlet Cailian Press, several initial Xiaomi SU7 buyers have taken to social media to share their experiences, with some facing unexpectedly high renewal premiums and others encountering resistance from insurance companies.

One owner in Wenzhou shared on social media that no insurance companies had proactively contacted them for renewal. Upon contacting them, an insurance agent even allegedly deleted them as a contact. This owner stated that they were advised to renew through official Xiaomi channels after contacting Xiaomi customer service. However, having made a claim in the past year, the owner received quotes exceeding 10,000 yuan (1,400 USD) through the official app and other insurance companies.

The investigation revealed that while many Xiaomi SU7 owners reported renewal costs ranging from 4,000 to 7,000 yuan (420 to 980 USD) – often a decrease from their initial premium – some faced similar issues to the Wenzhou owner. A car owner in Suzhou shared an insurance bill totaling 10,240 yuan (1,430 USD), which included comprehensive coverage with a high third-party liability limit and coverage for occupants.

Xiaomi Auto’s customer service clarified that owners can choose insurance services from four partner companies (People’s Insurance Company of China, Ping An Insurance, China Pacific Insurance, and Sunshine Insurance) through the official Xiaomi Auto app. Opting for this route also allows customers to purchase a “Xiaomi Worry-Free Service Package” for 1,299 yuan (182 USD), offering benefits like vehicle pick-up and delivery for maintenance and free essential maintenance. However, this service package is unavailable if owners choose other insurance providers independently.

While Xiaomi insists that customers are not obligated to use the official channels, some owners feel this setup limits their options.

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Based on current observations, an insurance professional commented that insurers are not giving Xiaomi SU7 any specific “special attention.” They explained that car insurance pricing models are complex and can fluctuate significantly. Premiums for new energy vehicles are generally higher due to a perceived higher risk and claim rate, making some insurance agents less willing to underwrite their policies.

The higher insurance cost for new energy vehicles is a recognized issue in the industry. Data from the China Banking and Insurance Information Technology Management Co. showed that in 2023, the average premium for NEVs was about 21% higher than for gasoline cars. Specifically, the average annual premium for pure electric vehicles was 1,687 yuan (233 USD) higher than for gasoline cars, roughly 1.8 times the latter’s annual premium. In 2024, the Chinese insurance industry underwrote 31.05 million NEVs, generating 140.9 billion yuan (20 billion USD) in premiums but incurring an underwriting loss of 5.7 billion yuan(786 million USD), marking a continuous trend of losses.

Experts from the Actuarial Institute of China and China Banking and Insurance Information Technology Management Co. have noted that the higher insurance costs for NEVs are due to higher repair costs, higher claim rates, and mismatches between insurance pricing and vehicle usage or risk profiles.

Authorities are taking steps to address these challenges. Earlier this year, four departments, including the Financial Regulatory Administration, jointly issued guidelines to promote the high-quality development of NEV insurance, aiming to reasonably reduce maintenance and usage costs and optimize insurance supply. The “Car Insurance Easy to Insure” platform has also been launched to help NEV owners connect with insurers and prevent unjustified coverage refusals.

Despite these insurance-related challenges some early owners faced, Xiaomi Auto announced impressive sales figures today. For March, the company delivered over 29,000 Xiaomi units.

Xiaomi Auto stated, “Our production capacity is ramping up smoothly, and we are confident in achieving our annual delivery target of 350,000 units. We thank everyone for their support and trust.”

This follows a strong performance in February, where Xiaomi SU7 deliveries exceeded 20,000 units, marking the sixth consecutive month with deliveries surpassing this milestone. Deliveries of the Xiaomi SU7 Ultra began across the country on March 2nd.