A recent study on the global automotive market structure reveals persistently high reliability issues with new energy vehicles in China, with concerns escalating about the quality of new cars. Xiaomi is set to unveil its new car model, YU7, with an intelligent cockpit utilizing consumer-grade chips (lower quality) instead of automotive-grade chips on Thursday, highlighting the company’s pursuit of cost-effectiveness at the expense of performance.
Industry insiders point out that Xiaomi’s relentless pursuit of ‘cost-effectiveness’ is leading the company to walk a tightrope between cost and performance. The quality issues plaguing Xiaomi’s cars this year have drawn widespread public scrutiny.
On Wednesday (June 25), Xiaomi’s Chairman and CEO, Lei Jun, announced on Weibo that the company’s first SUV model, YU7, will be officially released on Thursday evening at 7 p.m.
During Xiaomi’s 15th-anniversary strategic product launch event on May 22, Lei Jun introduced the intelligent cockpit of the Xiaomi YU7 model, which is equipped with the 4nm Qualcomm Snapdragon 8 mobile platform cockpit chip (a consumer-grade chip, not automotive-grade).
It should be noted that consumer-grade chips (such as mobile chips) typically have a normal operating temperature range of 0℃ to 70℃, a design lifespan of 3–4 years, while automotive-grade chips need to withstand extreme environments from -40℃ to 105℃, with a minimum usage cycle of around 15 years.
Consumer-grade chips only need to meet waterproof requirements, while industrial chips need to be waterproof, moisture resistant, corrosion resistant, and fungus resistant; automotive-grade chips, apart from meeting industrial requirements, also require enhanced packaging, impact resistance, temperature resistance, and heat dissipation.
Xiaomi replaced the mainstream automotive-grade Qualcomm Snapdragon 8295 chipset with the mobile Snapdragon 8Gen3, reducing the unit price from nearly $900 to around $160.
Moreover, the high-end electric vehicle brand under BYD, Fangcheng Bao, also did not adopt mainstream intelligent cockpit chips such as Qualcomm Snapdragon SA8155 and SA8295, opting for its self-developed BYD9000 intelligent cockpit chip, which is deemed a consumer-grade chip by the industry.
According to industry experts cited by Securities Times, Xiaomi’s chip selection reflects its technological balancing strategy: while consumer-grade chips reduce initial costs, they may face bottlenecks in computing power and iteration speed. The industry’s extreme pursuit of ‘cost-effectiveness’ is forcing car manufacturers to walk a tightrope between cost and performance.
Since the explosion incident at the end of March and the ‘hood gate’ incident in May, Xiaomi Automotive has been embroiled in a whirlwind of public opinion.
On the evening of March 29, a Xiaomi SU7 standard version vehicle caught fire after hitting a guardrail on the Deshang Expressway in Tongling, Anhui, resulting in the death of three occupants, sparking public attention.
In early May, the first group of owners who pre-ordered the ‘ventilated version’ Xiaomi SU7 Ultra found out that they needed to pay an additional $42,000 to upgrade to a carbon fiber double air inlet front hood, commonly known as the ‘ventilated version hood,’ which turned out to be a decorative piece without the performance enhancement as heavily promoted by the official. Subsequently, the news of “hundreds of Xiaomi car owners demanding hassle-free returns” ignited social media, leading to the so-called ‘hood gate’ controversy.
In reality, complaints about the quality of new energy vehicles in China are very high. On June 19, Consumer Insight and market research institution J.D. Power officially released the 2025 China New Energy Vehicle Long-term Reliability Study SM (NEV-VDS) Pilot survey results.
The results show that the long-term reliability quality complaint number for new energy vehicles in China is as high as 244 PP100 (problems per 100 vehicles, with a lower score indicating higher reliability), significantly higher than the complaint numbers for new energy vehicle quality complaints (NEV-IQS) and fuel vehicle long-term reliability quality complaints (VDS).
J.D. Power is a leading global consumer insight, market research, consulting, data, and analytics service company established in 1968. J.D. Power has released vehicle reliability studies in the United States for over 30 years.
According to J.D. Power, the information entertainment system is the category with the highest complaints from car owners, with 5 of the top 20 specific issues in PP100 related to information entertainment system. The main problems lie in the voice command ‘misunderstanding,’ non-responsive touch screens, and poor audio quality.
Next is the issue of seats being ‘less comfortable over time,’ with long-term discomfort becoming a pain point. Although they may look luxurious, they are not comfortable to use. Research shows that new energy vehicle users have the most complaints about seat-related issues, such as uncomfortable headrests and seats, inappropriate seat belt fastenings, and driving experience issues, such as overly sensitive brakes and heavy steering wheels.
The results of the above research are based on real feedback from 3,644 car owners who purchased cars from December 2022 to January 2024. The study covered 18 car models from 10 brands, with sample sizes of all car models exceeding 100. Data collection was conducted in an orderly manner in 12 first and second-tier cities in China from December 2024 to February 2025.
Furthermore, on June 5, J.D. Power released the 2025 China New Energy Vehicle New Car Quality Study (NEV-IQS). The results show that the number of quality problems reached 226 PP100, an increase of 16 PP100 from 2024, indicating an overall upward trend in quality problems.
On October 31, 2024, J.D. Power released the China Vehicle (Fuel Vehicle) Reliability Study, with an overall industry problem complaint number of 190 PP100, an increase of 9.3 PP100 from 2023.
Yang Tao, General Manager of the Automotive Product Division of J.D. Power China, stated, “User complaints related to intelligent cockpits and assisted driving are on the rise, indicating that after undergoing a period of heavy technology configuration, car companies must return to the essence of user experience value.”
In the long-term quality complaints for new energy vehicles, complaints about malfunctioning issues are significantly higher than design-related complaints. In the current market environment of ‘price reduction,’ cost control has brought durability risks to multiple systems such as the body and configuration.
The downgrading of intelligent cockpit chips from automotive-grade to consumer-grade has become the choice of some car manufacturers to reduce costs, sacrificing reliability and safety in the process.