Eliza Wong
Executive Summary
Xiaomi’s automotive division faces significant challenges as it recalls over 110,000 SU7 electric vehicles due to autonomous driving system concerns. This development raises crucial questions about the company’s technological capabilities and regulatory compliance in China’s rapidly evolving electric vehicle market.
- Xiaomi announces second major recall affecting 116,887 SU7 standard edition vehicles produced between February 2024 and August 2025
- Recall addresses L2 autonomous driving system limitations in extreme scenarios that could increase collision risks
- Company utilizes OTA (Over-The-Air) technology for software updates rather than physical repairs
- Incident marks Xiaomi’s second recall in 2024, both related to autonomous driving functionality
- Development challenges CEO Lei Jun’s ambition to position Xiaomi as a leader in autonomous driving technology
Xiaomi’s Autonomous Driving Ambitions Encounter Reality Check
The Chinese electric vehicle market received another reminder of the challenges facing autonomous driving technology as Xiaomi Corporation announced its second major recall of SU7 vehicles this year. The company’s aggressive push into automotive technology, led by founder Lei Jun (雷军), now faces increased scrutiny from regulators and consumers alike regarding the reliability of its autonomous driving systems.
This latest recall affects 116,887 SU7 standard edition vehicles manufactured between February 6, 2024, and August 30, 2025. According to filings with China’s State Administration for Market Regulation (国家市场监督管理总局), the vehicles demonstrate potential limitations in their L2 autonomous driving functionality during certain extreme scenarios that could increase collision risks if drivers fail to intervene promptly.
Technical Specifications and Safety Concerns
The identified issue specifically involves Xiaomi’s high-speed navigation assist function, which may not adequately recognize, warn, or handle extreme special scenarios. This represents a significant concern for a company that has positioned autonomous driving technology as a cornerstone of its competitive strategy in the crowded Chinese EV market.
Xiaomi’s response involves deploying Over-The-Air (OTA) technology to update software systems remotely, eliminating the need for physical repairs at service centers. The company emphasized that while no physical components require replacement, they followed formal recall procedures to ensure regulatory compliance and maintain transparency with consumers.
Regulatory Framework and Industry Context
China’s regulatory environment for autonomous vehicles has evolved significantly in recent years, particularly regarding OTA updates. In November 2020, the State Administration for Market Regulation issued the Notice on Further Strengthening the Supervision of Automotive Remote Upgrade (OTA) Technology Recalls, requiring manufacturers to file OTA updates as formal recall actions when addressing safety concerns.
The broader automotive industry has seen increasing recall activity, particularly among electric vehicles. According to regulatory data, China implemented 233 vehicle recalls in 2024 affecting 11.237 million units, representing increases of 8.9% and 67% respectively compared to the previous year.新能源汽车 (New Energy Vehicle) recalls specifically reached 89 incidents covering 4.491 million vehicles, a 180.1% year-over-year increase.
OTA Recalls Becoming Industry Standard
The adoption of OTA technology for recall implementations has grown dramatically, with 19 OTA-based recalls affecting 4.068 million vehicles in 2024 alone—a 246.8% increase from the previous year. This trend reflects the industry’s transition toward software-defined vehicles where updates can address issues without physical interventions.
Other manufacturers have similarly utilized OTA solutions for recent recalls. Tesla China recalled over 1.2 million vehicles earlier this year to address issues with rearview camera functionality and electronic power steering system software through remote updates.
Xiaomi’s Autonomous Driving Development Journey
Xiaomi’s investment in autonomous driving technology represents a significant component of its broader corporate strategy. Company filings reveal substantial financial commitments, with spending increasing from 3.3 billion yuan to 4.7 billion yuan dedicated to autonomous driving research and development. The company has leveraged its existing AI laboratory, established in 2016, and deployed approximately 3,000 AI engineers to advance its automotive technology initiatives.
The company’s autonomous driving ambitions extend beyond internal development. In 2021, Xiaomi’s Yangtze River Industrial Fund led the D++ round of financing for纵目科技 (Zongmu Technology), a Shanghai-based autonomous driving and ADAS technology supplier known for its algorithm capabilities and complete system design expertise.
Technical Capabilities and Market Positioning
During Xiaomi’s automotive technology presentation in late 2023, Lei Jun publicly announced the company’s full-stack self-developed autonomous driving technology and declared ambitious goals to reach the first tier of the autonomous driving industry by 2024. The company subsequently claimed that all its vehicle models supported end-to-end model-based valet parking assistance capable of precise perception of parking lot lanes and obstacles, including obstacle avoidance and reverse evasion capabilities—even without internet connectivity.
However, these claims faced reality checks shortly thereafter. The company’s first recall in early 2024 addressed intelligent parking assistance issues affecting 30,931 SU7 vehicles, specifically problems with time synchronization abnormalities that could impact static obstacle detection during parking operations.
Market Impact and Consumer Confidence Challenges
The market response to Xiaomi’s recall announcement has been relatively measured, potentially because OTA updates minimize inconvenience compared to traditional recalls requiring physical service visits. However, the recurring nature of autonomous driving-related issues raises broader concerns about technology readiness and implementation timelines.
A more significant challenge emerged in March 2024 when a Xiaomi SU7 standard edition was involved in a serious accident on the Deshang Expressway池祁段 (Chiqí section) that resulted in three fatalities. Preliminary investigations indicated the vehicle was operating under NOA intelligent assisted驾驶 (driving) mode at 116 km/h before the incident. While official investigation results remain pending, the accident undoubtedly affected public confidence in新能源汽车 (new energy vehicle) autonomous driving systems.
Terminology and Communication Shifts
Following the March incident, Xiaomi modified terminology on its SU7 ordering page, replacing “智驾” (smart driving) with “辅助驾驶” (assisted driving). The company explained this change as responding to national guidelines and aligning with automotive industry driving automation classification standards, emphasizing that these functions remain辅助驾驶功能 (assisted driving features) requiring continuous driver attention and readiness to assume control during emergencies.
Despite these challenges, Xiaomi continues pursuing partnerships to advance its autonomous driving capabilities. In July 2024, NVIDIA founder and CEO Jensen Huang revealed collaborations with Xiaomi on artificial intelligence and autonomous driving software development, indicating ongoing commitment to technological advancement despite current setbacks.
Future Outlook and Industry Implications
The autonomous vehicle industry faces a critical juncture where technological promise must align with practical safety requirements. As systems become increasingly complex and rely on AI models requiring continuous training with massive datasets, OTA updates will likely become standard practice for addressing software-related issues post-production.
For Xiaomi specifically, the company’s ability to rapidly identify, respond to, and resolve software-related challenges will significantly influence consumer trust and market positioning. The company’s proactive approach to recalls—while necessary—highlights the inherent complexities in developing reliable autonomous driving systems that perform safely across diverse real-world conditions.
Broader Industry Considerations
The challenges facing Xiaomi reflect wider industry dynamics as manufacturers balance innovation pace with safety assurances. Regulatory frameworks continue evolving to address these complexities, particularly regarding how OTA updates are classified, managed, and communicated to consumers.
Manufacturers must also navigate changing consumer expectations as awareness of autonomous driving limitations grows. Transparency about system capabilities, limitations, and ongoing improvements becomes increasingly important for maintaining market confidence during this transitional period toward higher levels of vehicle automation.
Navigating the Path Forward for Autonomous Driving
Xiaomi’s recall experience underscores the complex interplay between technological innovation, regulatory compliance, and consumer confidence in the rapidly evolving electric vehicle market. While OTA technology provides efficient mechanisms for addressing software-related issues, companies must maintain rigorous development, testing, and validation processes to minimize safety concerns before vehicles reach consumers.
The company’s continued investment in autonomous driving technology—including partnerships with industry leaders like NVIDIA—suggests determination to overcome current challenges. However, rebuilding complete market confidence will require demonstrable improvements in system reliability and transparent communication about capabilities and limitations.
For investors and industry observers, Xiaomi’s experience offers valuable insights into the practical realities of autonomous driving implementation. As the industry continues evolving, manufacturers that successfully balance innovation pace with safety assurance will likely emerge as long-term leaders in the increasingly competitive electric vehicle market.
Market participants should monitor how Xiaomi and other manufacturers address these challenges while maintaining compliance with evolving regulatory requirements. The company’s ability to learn from these experiences and implement robust solutions will significantly influence its competitive position in China’s dynamic electric vehicle landscape.
