The Xiaomi SU7, launched with outstanding fanfare last year, has emerged as one of the most talked-about electric vehicles (EVs) in China. However, as its first wave of owners approaches their insurance renewal dates, some have found themselves facing unexpected challenges. These include significant increases in insurance premiums and resistance from insurers. This article delves into the reasons behind these issues and examines the broader implications for the insurance industry and new energy vehicles (NEVs) as a whole.
Insurance Renewal Woes for Xiaomi SU7 Owners
As Xiaomi SU7 owners reach their insurance renewal dates, many are startled by the higher-than-expected premiums they are being asked to pay. The insurance renewal process for the SU7 has proven to be a challenging and frustrating journey for a growing number of owners. Social media platforms have seen numerous complaints from first-generation SU7 buyers, with several reporting that their renewal premiums are much higher than expected. Some even encountered difficulties with insurance companies reluctant to continue covering their vehicles.
One such example comes from a Xiaomi SU7 owner in Wenzhou. The owner shared their experience online, describing how no insurance companies reached out to them about their coverage renewal. When they proactively contacted their insurer, the agent allegedly removed them from their contact list. The customer eventually sought help from Xiaomi’s official channels and was advised to renew their coverage through them. However, after making a previous claim, the quoted premiums ranged from 4,000 to 10,000 yuan (roughly 420 to 1,400 USD), much higher than expected.
The Role of Xiaomi’s Official Channels in Insurance Renewals
For Xiaomi SU7 owners, one possible avenue for addressing these insurance renewal issues is through Xiaomi’s own app. The company has partnered with four leading insurance providers—People’s Insurance Company of China, Ping An Insurance, China Pacific Insurance, and Sunshine Insurance. Xiaomi customers can choose their insurance policies through the official Xiaomi Auto app, which also offers a "Xiaomi Worry-Free Service Package" for 1,299 yuan (182 USD). This package includes benefits such as free essential maintenance, pick-up and delivery for repairs, and other perks. However, there are some downsides to this arrangement.
Although Xiaomi assures customers that they are not obligated to use the app to choose their insurance, many owners feel that the restrictions imposed by these official channels make it more difficult to find other insurance options independently. The lack of flexibility in choosing insurance policies has become a source of frustration for some users, especially those who prefer to shop around for the best deal.
Why Are Insurance Premiums Higher for the Xiaomi SU7?
The increased cost of insurance for the Xiaomi SU7 is part of a broader trend affecting new energy vehicles. As a new player in the electric vehicle market, the Xiaomi SU7 faces the same challenges that many other NEVs encounter. The primary reason for the higher premiums is the perceived risk and higher claim costs associated with new energy vehicles. While electric cars are gaining in popularity, they remain relatively new to the market, and many insurance providers are still grappling with how to assess and price the risks involved.
An expert in the insurance industry explained that insurance for new energy vehicles is often more expensive due to the higher costs associated with repairing electric vehicle components, such as batteries and electric motors. Furthermore, insurers often cite a higher frequency of claims, particularly in the first few years of a vehicle's life, as another factor driving up the costs. The combination of these risks makes some insurance companies hesitant to provide coverage for electric vehicle owners, including those with the Xiaomi SU7.
New Energy Vehicles and Insurance Pricing Models
According to data from the China Banking and Insurance Information Technology Management Co., insurance premiums for new energy vehicles (NEVs) are, on average, 21% higher than for gasoline-powered cars. This disparity stems from various factors, including the cost of repairs for electric vehicles, which tend to be higher due to the specialized components involved, as well as the understanding that electric cars may be more susceptible to certain types of accidents.
In 2023, the average annual premium for pure electric vehicles was found to be about 1,687 yuan (233 USD) more expensive than that of gasoline vehicles. This price difference has led to significant concerns among NEV owners who feel they are being unfairly penalized due to the unique characteristics of their vehicles.
Moreover, in 2024, the insurance industry underwrote a significant number of NEVs, generating 140.9 billion yuan (20 billion USD) in premiums. However, this came at the cost of underwriting losses amounting to 5.7 billion yuan (786 million USD). These continuous losses from NEV underwriting have placed additional pressure on insurers, contributing to the hesitance some companies exhibit when dealing with electric vehicle insurance.
Xiaomi's Efforts to Improve the Situation
In response to the rising insurance concerns, Xiaomi has taken proactive steps to address the issue. The company’s customer service team has emphasized that the Xiaomi SU7 is not bound by the official insurance channels, and owners are free to choose from a range of insurance providers. However, Xiaomi is working to simplify the insurance process by offering its customers a more streamlined experience through its app and official partners.
Xiaomi Auto's strong delivery performance also plays a role in easing customer concerns. The company recently reported delivering over 29,000 units of the Xiaomi SU7 in March 2025, surpassing the 20,000-unit mark for the sixth consecutive month. This impressive sales growth indicates that despite the insurance issues, demand for the Xiaomi SU7 remains high, and the company’s commitment to improving its offerings continues.
Impact of the Xiaomi SU7’s Success on the Insurance Landscape
The growing popularity of the Xiaomi SU7 and similar electric vehicles could lead to significant shifts in the insurance market. As more EVs enter the market, insurers will likely need to adapt to the evolving risk profile of new energy vehicles. With the increased demand for electric vehicles, there is a strong push from the industry to develop more accurate and tailored insurance products for electric vehicles.
Industry professionals predict that insurers will eventually become more accustomed to the unique characteristics of electric vehicles, leading to more competitive pricing and better insurance options for owners of the Xiaomi SU7 and other EVs. Moreover, regulatory bodies have already begun to take steps to ease the challenges associated with NEV insurance.
Government Efforts to Regulate and Streamline NEV Insurance
Recognizing the challenges faced by electric vehicle owners, Chinese authorities have begun to implement policies aimed at improving the NEV insurance landscape. Earlier this year, four government departments, including the Financial Regulatory Administration, jointly issued guidelines to encourage the sustainable development of NEV insurance. These guidelines aim to reduce the costs associated with vehicle maintenance and optimize the insurance supply chain.
Additionally, the launch of the "Car Insurance Easy to Insure" platform is another initiative designed to help NEV owners connect with insurers and prevent unjustified rejections of coverage. These efforts are expected to create a more stable and accessible environment for insurance in the rapidly growing electric vehicle market.
A Bright Future Despite Initial Setbacks
Despite the insurance challenges faced by early Xiaomi SU7 owners, the future of the electric vehicle market in China remains promising. Xiaomi’s aggressive expansion in the automotive sector, combined with government initiatives to improve the insurance framework for NEVs, ensures that the company and its customers will ultimately benefit from a more favorable environment.
As more manufacturers enter the EV market and competition increases, insurers will likely begin to refine their pricing models to reflect the true risk of electric vehicles. This shift will help make insurance coverage for the Xiaomi SU7 and other electric vehicles more affordable and accessible in the long run.
Conclusion
While some Xiaomi SU7 owners are currently grappling with high insurance renewal rates and reluctant insurers, these challenges are part of a broader trend in the evolving electric vehicle market. As more NEVs hit the road and insurance companies adapt to the unique needs of electric vehicles, the insurance landscape will likely become more favorable for owners in the future. Xiaomi’s strong market performance and ongoing efforts to improve its customer service are key factors in ensuring the long-term success of the SU7 and other electric vehicles in China’s competitive automotive market.
As the electric vehicle industry continues to grow, both consumers and insurers will benefit from a more comprehensive and efficient approach to insurance for new energy vehicles.
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