Xiaomi’s Yu7 Electric Sport Utility Vehicle had a remarkable initial order launch, boosting the company’s stock to new heights on Friday. This success has led some to speculate that Tesla may need to lower its prices to maintain competitiveness.
In just the first 18 hours after the Yu7 was made available, Xiaomi reported approximately 240,000 confirmed orders. Buyers had to pay a substantial deposit for immediate delivery, or a smaller deposit for future models.
The tech giant made waves in the Chinese electric vehicle landscape last March when it introduced its first car, the Su7 sedan. This model has consistently outsold Tesla’s Model 3 in China since December, even attracting compliments from Ford CEO Jim Farley.
The Yu7 is Xiaomi’s second vehicle launch, currently priced at 253,500 yuan (around $35,360), undercutting the Tesla Model Y by nearly 4%. Analysts believe this could exacerbate market share challenges for American automakers.
A crowded scene unfolded at one Xiaomi showroom in Beijing, where many gathered to check out the Yu7.
Otto Shee, who owns a 26-year-old Tesla Model Y, mentioned he’s considering getting a Yu7 for his father, who drives a Mercedes-Benz. He remarked on the impressive supply chain management at Xiaomi, which, alongside the SU7’s success, makes him see it as a strong contender in the market.
Xiaomi’s stock surged by 8% during early trading, reaching an all-time high, but eventually closed with a 3.6% increase. Data estimates the company’s valuation at around $190 billion, up more than 70% this year, making it a significant player in the Asia-Pacific region.
What’s Next for Tesla?
Tesla’s market share in China’s EV space has seen a decline from a peak of 15% in 2020 to just 10% last year, and it hit 7.6% during the first five months of 2025. Domestic competitors are increasingly appealing to Chinese consumers with new features and designs.
Citi analysts suggested that Tesla may need to cut prices further, offer its “fully autonomous driving” software at no cost, and enhance funding incentives to effectively rival Xiaomi.
Despite being a major player, Tesla has not provided immediate comments regarding its sales in China, a market that accounted for roughly 20% of its revenue last year.
Xiaomi’s CEO, Lei Jun, acknowledged Tesla’s advanced driving assistance software but emphasized features of the Yu7 that he claimed surpass those of the Model Y.
The base Yu7 model comes with a 96.3 kWh battery, providing a substantial range of up to 835 km (519 miles) on one charge and allows for fast charging. This is quite impressive compared to the Tesla Model Y’s 719 km range, which utilizes a 78.4 kWh battery.
Additionally, the Yu7’s seat design includes storage drawers, and while its driver assistance is included at no extra cost, Tesla charges 64,000 yuan for similar software options.
Interestingly, on the night before the article, Xiaomi reported 289,000 orders for the Yu7 within just an hour of its release.
However, there are concerns about potential scalpers, as many were seen trying to sell their order positions on Xianyu, a second-hand trading platform. To combat this issue, Xiaomi has limited customers to a maximum purchase of two cars.
