There is now a new rival for Tesla’s best-selling Model Y in China.. Smartphone company Xiaomi has just shown its new electric SUV, the YU7, after two months of excitement and buildup.
This new car has smart features like a basic self-driving system, a big screen inside, and a strong battery. People see it as a big step forward in the high-end electric car market, where Tesla used to be the leader — but that lead is shrinking.
At the car’s launch in Beijing, Xiaomi’s CEO Lei Jun said, “Some people online think this car will cost 199,000 yuan (about $27,600), but that’s too low. With all its features, which are like the Model Y, it should be worth at least 300,000 yuan.”
The YU7 is Xiaomi’s second electric car. The first one, the SU7 sedan, has been selling better than Tesla’s Model 3 in China since December.
Xiaomi says the YU7 will go on sale in July, but the price is still not confirmed. The basic version can drive up to 835 kilometers on a single charge. In January, Xiaomi posted on social media that it believed the YU7 could beat the Model Y, which has a driving range of 593 kilometers and a starting price of 263,500 yuan.
Tian Maowei, a car sales manager in Shanghai, said, “Xiaomi’s first car changed the market in China. People liked how it looked and its technology. We think the YU7 will also get lots of orders when sales begin.”
People thought Xiaomi would show the YU7 at the Shanghai Auto Show in April, but the company waited until May. Buyers might have to wait a few months to get their car because of low production.
With its Shanghai Gigafactory producing the Model 3 and Model Y, Tesla has dominated the Chinese market for luxury electric vehicles since 2020. But since 2024, local carmakers like BYD and Xiaomi have been catching up.
Only 8,747 Tesla Model 3s were sold in China in April, a 66.3% decrease from March.. Meanwhile, Xiaomi sold over 28,000 SU7s in the same month.
The Model Y was still the top-selling SUV (even beating gas cars) in China in 2024. Tesla sold over 480,000 Model Ys last year, up 5.2% from 2023.
Many Chinese EV companies, like Zeekr and Nio, have tried to compete with the Model Y by launching their own SUVs. But so far, none have been able to beat it.
Tesla’s Shanghai factory delivered 172,754 cars in the first half of this year, the fewest deliveries in three years and a 22% decrease from 2024.
