Tesla’s bestselling Model Y faces yet another challenger on the mainland after Xiaomi unveiled the YU7 electric SUV amid much hoopla surrounding its launch over the past two months.
The smartphone maker’s much-anticipated vehicle, featuring a preliminary self-driving system, large multimedia screen and high-performance battery, is seen as a game changer in the premium electric vehicle (EV) segment, where Tesla’s overwhelming advantage has been quickly dwindling.
“Some netizens mentioned that this car will be sold for 199,000 yuan [US$27,621], which is impossible,” Xiaomi CEO Lei Jun said at a launch event in Beijing on Thursday. “Considering its configuration, which is comparable to the Model Y, it should be worth at least 300,000 yuan.”
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The YU7’s debut comes a year after Xiaomi unveiled its first EV – the SU7 sedan – which has been outselling the Tesla Model 3 on the mainland since December.
Xiaomi said the YU7 would hit the market in July. Prices of the car, whose basic edition has a driving range of 835km, have yet to be announced.
In January, Xiaomi said on its Weibo social media account that it had full confidence the YU7 would beat the Model Y when Tesla began taking orders for the fully revamped SUV.
The upgraded Model Y, with a driving range of 593km, starts at 263,500 yuan.
“Xiaomi’s first model successfully redrew the EV landscape [in China], and it has become a new Tesla challenger in China because consumers were attracted by the car’s design and technology,” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. “Initial reactions from middle-income consumers showed that the YU7 would also receive thousands of orders once presale starts.”
Analysts and consumers had expected Xiaomi to launch the YU7 at the Shanghai Auto Show in late April, but sales executives told the Post during the event that the carmaker would unveil the new model in May.
They added that buyers would have to wait for several months before the new car is delivered due to a production shortage.
Tesla, with its Model 3 and Model Y vehicles assembled at the Shanghai Gigafactory, has been the front-runner in the mainland’s premium EV segment since 2020, but the US carmaker has been losing market share to local rivals led by BYD, the world’s largest EV builder, and Xiaomi since 2024.
Last month, sales of the Model 3 on the mainland fell 66.3 per cent to reported sales of 8,747 units from March, while Xiaomi delivered more than 28,000 SU7s in April.
The Model Y outsold all other SUVs, including petrol-powered rivals, on the mainland in 2024, according to the China Passenger Car Association. Tesla delivered more than 480,000 Model Ys in China last year, up 5.2 per cent from 2023.
Mainland EV makers have developed and built dozens of electric SUVs, from Zeekr’s 7X to Nio’s Onvo L60, trying to lure more customers away from the Model Y, but not a single model has posed a real threat to it.
The Gigafactory’s first-quarter deliveries – comprising sales to local customers and exports – hit the lowest level in three years, slumping 22 per cent from the same period in 2024 to 172,754 units.
More from South China Morning Post:
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- Stellantis, Chinese EV maker Leapmotor near decision on European production
- Tesla’s April deliveries shrink 26% in China as buyers opt for cheaper, tech-laden marques
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