Sunita Somvanshi
Xiaomi has sent shockwaves through the electric vehicle market with its new YU7 SUV, securing over 200,000 firm orders in just three minutes after launch. The Chinese smartphone giant’s second electric vehicle is priced from 253,500 yuan ($35,360), deliberately undercutting Tesla’s popular Model Y by nearly 4% or about $1,400.
The YU7’s remarkable launch reception exceeded the initial orders for Xiaomi’s first vehicle, the SU7 sedan, by more than three times. Within the first hour, orders reached 289,000, far surpassing market expectations of around 100,000 units.
“We expect YU7 would significantly erode Tesla Model-Y’s China market share,” said Citi analyst Jeff Chung in a recent report. Xiaomi CEO Lei Jun called the reception a “miracle in China’s automotive industry” and openly set the goal of outselling the Tesla Model Y in China.
The YU7 boasts superior specifications to the Model Y in several key areas. The base model features a 96.3 kWh battery pack offering up to 835 km (519 miles) of range – significantly more than the Model Y’s maximum range of 719 km with its smaller 78.4 kWh battery. The SUV can add up to 385 miles of range in just 15 minutes with its advanced 800V charging system.
Higher-end models include the YU7 Pro priced at 279,900 yuan ($39,000) and the YU7 Max at 329,900 yuan ($46,000), both substantially cheaper than comparable Tesla models while offering better performance specs. The Max model accelerates from 0-62 mph in just 3.23 seconds with 681 horsepower.
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However, Xiaomi faces significant production challenges meeting this overwhelming demand. The company currently operates a single EV plant in Beijing, and analysts estimate wait times for the YU7 could stretch to a year and a half unless output increases substantially. Xiaomi aims to deliver approximately 100,000 YU7 EVs by the end of 2025.
This aggressive market entry intensifies the already fierce competition in China’s EV market, where Tesla has seen its market share decline from 15% in 2020 to 7.6% in early 2025. Since December, Xiaomi’s SU7 sedan has consistently outsold Tesla’s Model 3 in China on a monthly basis.
The YU7’s launch comes with some challenges too. Xiaomi’s EV division faced scrutiny earlier this year following a fatal crash involving an SU7 in March, leading to stricter regulations around driver-assistance systems in China. To prevent scalping, Xiaomi has limited purchases to two cars per customer.
Xiaomi’s stock has risen by more than 70% this year, reaching record highs following the YU7 launch. The company plans to expand its EV lineup and enter European markets by 2027, positioning itself as a serious global challenger to established EV manufacturers like Tesla.
