Xiaomi Corporation’s shares surged 8% to an all-time high after the company revealed overwhelming demand for its latest electric vehicle, the YU7 SUV. Within just one hour of launch, the model secured 289,000 pre-orders, far surpassing market expectations and underscoring the brand’s growing presence in China’s competitive EV market.
Priced at 253,500 yuan (approximately $35,360), the YU7 is positioned as a direct rival to Tesla’s Model Y, which starts at 263,500 yuan in China. The SUV represents Xiaomi’s second vehicle release, following the debut of its SU7 sedan. The new model enters a saturated electric vehicle landscape, as scrutiny mounts over assisted driving technologies and regulatory pressures on automakers intensify.
At the launch event in Beijing, Xiaomi founder Lei Jun positioned the YU7 squarely against the Model Y, continuing a strategy reminiscent of how he previously compared Mi smartphones to the iPhone. Lei acknowledged the challenges ahead, stating the company is preparing to face “the biggest competitor” and other strong contenders in the sector.
With an eye on the long term, Lei has pledged 200 billion yuan in investment over five years as part of Xiaomi’s ambition to become a global leader in smart devices, spanning everything from automotive technology to AI wearables and chip development. The YU7 forms a key component of that strategy.
Pre-orders began on Thursday with a refundable 5,000 yuan deposit. In a surprising move, customers awaiting delivery of the SU7 were given a three-day window to switch to the YU7. Xiaomi reported over 200,000 pre-orders for the SUV within the first three minutes following the launch announcement.
Analysts at Goldman Sachs described demand as exceeding both company and market expectations, forecasting that Xiaomi will continue strengthening its position in the premium electric vehicle segment in China. The firm raised its stock price target by 6% to HK$69.
According to Bloomberg Intelligence, the YU7 could be instrumental in accelerating Xiaomi’s EV sales, potentially driving a 209% increase in 2025. With sport utility vehicles enjoying greater popularity than sedans in China, the YU7 is expected to expand Xiaomi’s consumer base and take market share from rivals including Tesla and Nio. Analysts project the SUV could account for 41% of Xiaomi’s EV deliveries in the second half of the year, surpassing the company’s EV sales target by 13%.
The top YU7 variant is priced at 329,900 yuan, featuring a driving range of up to 760 kilometres (470 miles) and acceleration from 0 to 100 kilometres per hour in 3.23 seconds. The model comes in nine colours and includes high-end features such as lidar-based driver assistance, an 800-volt fast-charging platform, large touchscreens, massage chairs, and built-in storage compartments.
The YU7 will serve as a crucial test of market confidence in Xiaomi’s automotive ambitions following a fatal crash involving the SU7, which has drawn increased scrutiny from Chinese regulators. The launch also comes amid broader government pressure on automakers to refrain from aggressive pricing tactics and financial manoeuvres, including using near-new vehicles to artificially boost sales.
Despite regulatory headwinds, Lei expressed optimism that the YU7 will support Xiaomi’s automotive division in reaching profitability in the second half of the year, potentially marking one of the fastest paths to breakeven in the industry.
Investors have responded positively to this vision. Xiaomi’s market capitalisation now stands near $200 billion, surpassing BYD, China’s leading EV manufacturer. The SU7 has already outsold the Tesla Model 3 year-to-date.
In addition to the YU7, Xiaomi’s event showcased a range of new products, including a pair of 1,999 yuan AI-powered smart glasses capable of filming and interpreting visual information, the MIX Flip 2 foldable smartphone, and a tablet equipped with Xiaomi’s proprietary Xring O1 chip.
-Bloomberg
