Xiaomi Corp. electric vehicle sales in China have taken a hit since March after a fatal highway accident and consumer unhappiness around the marketing of one version of its car.
Orders for Xiaomi’s SU7 sedan plunged to around 36,000 units in April, down 55% month-on-month, Deutsche Bank AG wrote in a note. “This trend extended into May,” auto analysts led by Bin Wang said.
Deliveries are also suffering, the investment bank said, with volumes down sequentially over the past four weeks, from 7,200 in the third week of April to just 5,200 units in the second week of May.
Local media reports earlier this month said more than 300 people want to cancel their SU7 Ultra EV orders on false advertising about the design of the vehicle’s hood. That was the latest upset for Xiaomi after a fatal crash involving one of its SU7 sedans killed three people in late March.
Deutsche Bank’s report cited the accident among several reasons for the sales drop, as well as the “recent dispute on the optional carbon fiber front hood” for the race car version of the SU7, which consumers have argued are just two holes and some plastic structures rather than the promised air ducts to improve aerodynamics and cooling.
Xiaomi’s shares in Hong Kong slipped as much as 1.4% Thursday, trimming gains this year to around 44.6%.
Citi Research data show that since the beginning of the year, when sales are usually slow, orders for the SU7 sedan grew from 53,000 in February to 83,400 in March. But there was a sharp drop in April to 35,600, the month after the accident happened. Retail sales meanwhile fell from 29,200 in March to 27,200 a month later.
Bloomberg reported in April that Xiaomi has pushed back the debut of its first sport utility vehicle, the YU7.
Li Yanwei, with the China Automobile Dealers Association, also published an analysis on Wednesday on his Weibo account, showing that Xiaomi’s car sales have been falling since mid-April.
Outside of impacting consumer demand, the accident has brought more scrutiny to EV safety.
Chinese authorities have tightened the promotion and deployment of advanced driver assistance systems, as the Xiaomi EV had the autopilot function turned on at the time of the crash. New standards are also being set for battery stability and recessed door handles that are popular in electric cars but which may become inoperable in the event of emergencies if the EV loses power.
This story was originally featured on Fortune.com
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