Xiaomi’s Fatal Car Accident Raises Urgent Questions on EV Safety and Smart Driving Technology

ESG Observation: A Fatal Accident Involving Xiaomi Cars: How Electric Vehicle Companies Can Ensure Safety Amid the Intelligent Driving Wave

On March 31, 2025, a Xiaomi SU7 electric vehicle collided and subsequently caught fire on the De Shang Highway in Tongling, Anhui Province, resulting in the tragic deaths of three young women inside the car. This incident has raised widespread concerns about the safety of new energy vehicles and has placed Xiaomi’s autonomous driving technology, crisis management capabilities, and brand responsibility under intense scrutiny.

Xiaomi’s founder, Lei Jun, acknowledged in an internal speech on May 15 that he “did not expect the incident to have such a significant impact on Xiaomi” and noted that “public expectations exceeded imagination.” The three victims were all university students, and their families publicly questioned the vehicle’s safety on social media, raising issues such as “the doors locked and they couldn’t escape” and “battery explosions worsened the tragedy.” Although Xiaomi stated that the vehicle met national standards and submitted driving data, the family’s distrust of the transparency of the testing exacerbated public sentiment.

Once the video of the accident circulated on social media, discussions about “the safety of intelligent driving” intensified. Simultaneously, the NOA (Navigation Assisted Driving) feature of the Xiaomi SU7 faced criticism for potential technical flaws. Although the vehicle detected a construction barrier ahead and issued a warning, the driver had only 1 to 3 seconds to take control, exceeding human reaction limits. Previously, Lei Jun had prominently promoted the “zero takeover throughout the journey” capability during a live stream, while the actual technology remains at the L2 level of assisted driving, requiring constant oversight from the driver.

In response to the incident, the Ministry of Industry and Information Technology (MIIT) promptly convened a meeting and issued a notice requiring car manufacturers to clearly define the boundaries of their systems’ functions and safety response measures, prohibiting exaggerated and false advertising while strictly adhering to disclosure obligations. Additionally, terms like “autonomous driving,” “intelligent driving,” and “high-level intelligent driving” were banned, requiring manufacturers to promote their vehicles according to automation grading standards.

At the initial launch of the Xiaomi SU7, the brand vigorously promoted its five intelligent driving systems, with Lei Jun even claiming, “By 2024, Xiaomi cars will enter the first tier of the intelligent driving industry.” The introduction of new policies is widely interpreted as a “marketing failure” for Xiaomi.

Following the accident, Xiaomi established a special task force and cooperated with police investigations; however, their initial responses were criticized as “mechanical” and lacked timely disclosure of key evidence (such as complete Event Data Recorder (EDR) data) or clear compensation plans. After families questioned “why there was no proactive contact,” Xiaomi arranged a meeting through police coordination, which further escalated tensions. Compared to industry benchmark companies, Xiaomi fell short in emotional repair and information transparency.

Moreover, consumers were disappointed when it was revealed that the “carbon fiber dual air duct front hood” of the Xiaomi SU7 Ultra model was alleged to involve false advertising. Owners who paid 42,000 yuan for this optional component found that its actual functionality did not match the advertised “aerodynamic design” and “auxiliary heat dissipation,” as disassembly revealed it was merely a decorative design with a cost of less than 10,000 yuan. Over 400 owners initiated collective rights protection, demanding refunds and claiming “triple compensation.” Additionally, Xiaomi restricted the vehicle’s horsepower from 1,548 to 900 through over-the-air (OTA) updates, requiring users to “unlock performance” by submitting track results, which was criticized as an infringement on consumer choice.

The ESG scores for Xiaomi cars can be found at the Sina Finance ESG Rating Center. The internationally recognized rating agency Refinitiv assigned an ESG score of B to Xiaomi’s performance, ranking it third among 11 peer companies, while MSCI rated Xiaomi’s ESG performance as BBB, placing it fourth among 12 companies in the industry, which is considered average. Reviewing the sub-scores, Xiaomi received a social score of 66.2 (B) from Refinitiv and a governance score of only 40.4 (C); in MSCI’s assessment, the social score was merely 3.8, and the governance score was 4.3, indicating significant shortcomings in social responsibility and corporate governance.

Industry experts pointed out that some car manufacturers, in their rush to capture market share, failed to adequately verify vehicle safety in extreme conditions (such as at night or in construction zones), relying on “laboratory data” instead of real-world conditions for technology iteration. In the Xiaomi incident, the NOA system failed in the complex scenario of maneuvering around a construction barrier, highlighting the insufficiency of technical validation.

Xiaomi aims to achieve the ambitious target of delivering 350,000 vehicles annually at a rapid pace; however, this swift expansion has led to compressed research and development cycles. Despite Lei Jun emphasizing that “safety is the highest standard,” the industry believes that production pressure may compromise safety margins.

Lei Jun’s strong personal brand had previously garnered significant attention for Xiaomi cars, but in the wake of negative events, he has become the focal point of public criticism. For Xiaomi, addressing these concerns head-on is essential to restoring its reputation; evading accountability will only accelerate the collapse of trust. Moving forward, Xiaomi should prioritize user safety over a “traffic-first” strategy and increase investment in research and quality control. This could include extending testing periods in high-cold and high-temperature environments, establishing dynamic scoring mechanisms for suppliers, and integrating ESG metrics into executive evaluations. Moreover, a transparent accident response mechanism should be established, such as publicly releasing EDR data and setting up a third-party oversight committee.

The accident involving Xiaomi is not only a crisis for a single company but also reflects an imbalance between “innovation and safety” in the new energy vehicle industry. If car manufacturers continue to use marketing gimmicks to mask technical shortcomings and prioritize rapid expansion at the expense of safety, the collapse of public trust will be difficult to reverse. Whether Lei Jun’s reflections can translate into actionable changes depends on Xiaomi’s ability to truly respect the century-old principles of the automotive industry—safety is not just a metric but the baseline of human life. Only by embedding ESG principles into its strategic core can Xiaomi navigate the intelligent driving wave while upholding the critical line of “human life.”

To accurately and promptly track corporate ESG fulfillment and assess the potential impact of ESG sentiment, the Sina Finance ESG Rating Center has introduced an “ESG Impact Level” and established standardized qualitative criteria. Positive ESG sentiment is rated as excellent, good, moderate, or slight, while negative ESG sentiment is rated as severe, serious, moderate, or slight.