Xiaomi has intensified its electric vehicle ambitions with the launch of its YU7 SUV, a bold challenger to Tesla’s Model Y in the highly competitive Chinese market. With cutting-edge features, aggressive pricing, and integration across Xiaomi’s tech ecosystem, the YU7 signals a strategic shift for the electronics giant into the EV space.
Launched in May 2025, the YU7 starts at RMB 253,500 (approximately $35,360), undercutting the Model Y’s base price by 4%. Xiaomi’s supply chain efficiency, honed in the smartphone sector, enables it to offer premium specifications at mass-market prices. The model received over 200,000 pre-orders within minutes of its debut, boosting Xiaomi’s stock by 5.5% on launch day.
Key performance highlights include a CLTC-rated range of 835 km, surpassing the Model Y Long Range AWD, and acceleration from 0 to 100 km/h in just 3.23 seconds for the Max variant. The YU7 also features NVIDIA’s DRIVE Thor chip, LiDAR sensors, a 16.1-inch infotainment display, and an 800V silicon-carbide platform enabling ultra-fast charging, 620 km in 15 minutes.
Xiaomi’s ecosystem integration offers unique advantages, allowing users to control home devices from the vehicle, creating a connected ‘People-Car-Home’ experience unmatched by Tesla. With over 700 million IoT devices worldwide, the company aims to leverage this network as a strategic moat.
International expansion is in the pipeline, with Xiaomi targeting entry into European markets such as Germany and France by 2027. While regulatory challenges and quality control issues, such as those faced by its earlier SU7 sedan, remain concerns, analysts see strong market potential.
Research firms, including Jefferies, Citi, and CLSA, have labelled the YU7 a ‘game-changer,’ projecting annual sales of up to 360,000 units. Xiaomi has increased its 2025 delivery target from 250,000 to 350,000 vehicles. With a significantly lower EV/Sales ratio than Tesla, analysts forecast a 20% upside in Xiaomi’s stock over the next year.
Despite the hurdles ahead, including trade regulations and product reliability, Xiaomi’s aggressive pricing, manufacturing scale, and ecosystem synergy offer a compelling proposition. In a fast-growing EV market, the YU7 may well disrupt the status quo and redefine Xiaomi’s place in global mobility.
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