Xiaomi EV: Exploring Internationalization Amid Quality Crisis

Arpita Agnihotri, Saurabh Bhattacharya

Product #:W46750

Supplier:Ivey

Discipline:International Business, Strategy

Setting:United States, 2025

Details:Case (PDF) • 17 pages • 2026-01-08

Industries:

Transportation and distribution

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$9.71

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By May 2025, Xiaomi EV, the electric vehicle (EV) division of Xiaomi Corporation (Xiaomi), experienced a significant decline in orders even after the SU7 model outperformed Tesla Inc. in sales in 2024. Analysts believed that this decline was due to a series of quality issues that plagued SU7 models, including problems with the parking assist system, software failures, manufacturing quality issues, and a fatal road accident. These issues arose at the same time that Lu Weibing, partner and president of Xiaomi, was working toward making Xiaomi EV one of the top five global automakers and contemplating a phased expansion into international markets beginning in 2027. Should Lu reconsider his decision to enter developed international markets late, or should he first focus on the domestic market by addressing the quality issues raised by customers? What should his internationalization strategy be?

Learning Objectives

The case is intended for undergraduate- and graduate-level courses on international business, international marketing, strategic management, business strategy, and corporate strategy. Speed and mode of entry into international markets, as well as competitive advantage, are among the most common topics in international business, strategic management, and business strategy textbooks. After discussing the mode and speed of internationalization and sustainable competitive advantage, the instructor can use this case study early in the semester after delivering essential international business or competitive strategy concepts, including crisis management. International business textbooks typically cover these topics at the beginning of the book, allowing instructors who teach international business to discuss the case during the first three weeks of the semester. After working through the case and assignment questions, students will be able to accomplish the following objectives:

Critically analyze what attributes of a firm’s resources become sources of sustainable competitive advantage.
Explore what a firm’s speed of internationalization should be, assuming that the firm incurs quality issues and losses.
Examine the internationalization strategy of a firm in terms of its mode of entry.
Evaluate how a country gains a competitive edge in a particular product category.
Critically analyze ways to resolve a quality crisis and prioritize strategic decisions about resolving a quality crisis versus pursuing internationalization.