The YU7 is simply Xiaomi’s second car, and one which undercuts Tesla’s Mannequin Y in value by almost 4 per cent.
Tesla’s Mannequin Y, China’s best-selling SUV, will seemingly lose extra market share, analysts mentioned.
That might solely rub salt into the wound for the US automaker, which has steadily misplaced floor to home EV makers which have received over shoppers with snazzy new fashions. Xiaomi’s SU7, for instance, has outsold Tesla’s Mannequin 3 in China on a month-to-month foundation since December.
The YU7’s value is “barely beneath that of Tesla’s Mannequin Y but it surely gives a lot better specs and efficiency”, mentioned analysts at Jefferies.
Citi analysts mentioned Tesla could have to chop costs additional, supply its “Full Self-Driving” driver help software program at no cost and supply extra financing incentives whether it is to efficiently compete with Xiaomi.
Tesla didn’t instantly reply to a request for remark.
Its share of the Chinese language EV market has fallen from a peak of 15 per cent in 2020 to 10 per cent final yr after which once more to 7.6 per cent for the primary months of 2025.
Xiaomi shares soared 8 per cent to a file excessive in Hong Kong after the surge of early orders.
The Beijing-based industrial tech large made its first foray into car-making with its SU7 EV mannequin final yr, a part of a broader business push to spice up home consumption.
Preliminary enthusiasm for clever driving options in such automobiles was tempered by the deadly crash of a Xiaomi SU7 in March. The car had been in assisted driving mode simply earlier than it crashed, killing three college students.
Premier Li Qiang used the World Financial Discussion board in Tianjin this week to stipulate China’s ambition to change into a “main consumption powerhouse”, emphasising insurance policies to stimulate demand for high-value items similar to electrical automobiles.
