Tesla’s dominance in China’s premium electric vehicle market faces a new test with the launch of Xiaomi’s YU7 SUV. Introduced with great anticipation, the YU7 marks the tech company’s second foray into the EV sector, following the SU7 sedan that has outpaced Tesla’s Model 3 in mainland sales since late 2023. Packed with high-end features like an advanced multimedia system, long-range battery, and preliminary autonomous driving capabilities, the YU7 is seen as a significant new rival to Tesla’s bestselling Model Y.
At the official unveiling in Beijing, Xiaomi CEO Lei Jun dismissed speculation about a low price tag, emphasizing that the YU7’s sophisticated configuration could justify a price above 300,000 yuan. Although the final pricing is yet to be disclosed, the YU7’s base model promises an impressive range of 835 kilometers, significantly more than the revamped Model Y’s 593 kilometers. The Tesla SUV currently starts at 263,500 yuan.
Xiaomi plans to officially release the YU7 to the Chinese market in July. However, due to production limitations, buyers may face several months of waiting after placing orders. According to sales representatives, the YU7 was originally expected to debut at April’s Shanghai Auto Show, but Xiaomi opted to hold a dedicated launch event in May instead.
Industry analysts predict a strong market response to the new model. Middle-income consumers in particular have shown early interest, with expectations that presales will attract thousands of orders. This follows the trend set by the SU7, which garnered widespread consumer appeal due to its sleek design and advanced technology.
Tesla’s Model Y remains the best-selling SUV in China across all fuel types and saw over 480,000 units delivered in 2024. However, rising competition from local manufacturers like BYD and now Xiaomi is putting pressure on Tesla’s market position. Tesla’s overall deliveries from its Shanghai Gigafactory fell to their lowest first-quarter level in three years, dropping 22% year-on-year to 172,754 units.
Xiaomi’s entrance into the SUV segment with the YU7 adds fresh momentum to China’s rapidly evolving EV landscape. With consumers increasingly favoring high-tech, locally made alternatives, Tesla’s grip on the market appears increasingly at risk as the competition intensifies.
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