Xiaomi Corp.’s stock soared 8% to an all-time high after its $35,360 YU7 electric SUV, unveiled on June 26, 2025, drew an impressive 289,000 pre-orders in just one hour, signaling strong demand in China’s competitive EV market. Priced at 253,500 yuan, the YU7 undercuts Tesla’s Model Y by about $1,400, positioning Xiaomi as a formidable challenger to industry leaders like Tesla and BYD, reports Bloomberg.

UPDATE: PHOTOS OF TESLA’S FIRST FULLY AUTONOMOUS MODEL Y DELIVERY

Xiaomi’s $35,000 Yu7 Suv Sparks Record Share Surge With 289,000 Pre-Orders

YU7 Targets Tesla’s Model Y with Competitive Pricing

The YU7’s starting price of $35,360 aligns closely with analyst predictions and is strategically set below the Tesla Model Y’s 263,500 yuan ($36,760) base price. BYD’s Tang L SUV, slightly smaller, ranges from $33,470 to $40,450. Xiaomi’s aggressive pricing aims to capture a premium segment of China’s EV market, where larger vehicles are gaining traction. The top-tier YU7 model, priced at 329,900 yuan ($46,050), boasts a 470-mile range and accelerates from 0 to 62 mph in 3.23 seconds, rivaling high-end competitors.

Advanced Features Enhance Driver Experience

The YU7 integrates cutting-edge technology to appeal to tech-savvy Chinese consumers. Key specs include:

Lidar-equipped driver assistance for enhanced safety
800-volt fast-charging platform
16.1-inch touchscreen and panoramic dashboard display
Nappa leather zero-gravity seats with 10-point massage
Nine color options

These features, combined with amenities like power-adjustable rear seats, reflect Xiaomi’s focus on luxury and connectivity, leveraging its smartphone ecosystem to sync with drivers’ digital lives. However, the company faces scrutiny over its assisted-driving tech following a fatal SU7 sedan crash, which led to tighter regulations and a dip in orders.

Industry Trends and Regulatory Challenges

Xiaomi’s rapid EV success—delivering 135,000 SU7 sedans in 2024 and targeting 350,000 vehicles in 2025—has outpaced many competitors, with its $200 billion valuation surpassing BYD’s. “Consumer demand for Xiaomi’s YU7 far exceeds our and market expectations, which should enable Xiaomi to continue consolidating its leadership position in the premium auto market in China,” said Goldman Sachs analysts, including Timothy Zhao, raising their stock price target by 6% to HK$69 ($8.85).

Yet, Xiaomi navigates a turbulent market. Chinese authorities recently warned automakers, including Xiaomi and BYD, to curb practices like inflating sales with “zero-mileage” used cars and to ensure timely supplier payments to stabilize the supply chain.

An ongoing price war adds pressure, but CEO Lei Jun remains optimistic, projecting EV unit profitability by late 2025, a rare feat for new entrants. “We’re going to face the biggest competitor, and also face fierce challenges from all the other manufacturers,” Lei said at the Beijing launch, acknowledging the intense competition.

Strategic Moves Bolster Xiaomi’s EV Ambitions

Xiaomi’s EV push, backed by a $10 billion investment, mirrors its smartphone strategy: high-volume sales of premium, connected devices. The YU7’s debut aligns with new products like AI glasses and a folding phone, reinforcing Xiaomi’s ecosystem approach. Offering SU7 buyers a three-day window to switch to the YU7 demonstrates confidence in the SUV’s appeal. With 200,000 pre-orders secured in three minutes, Xiaomi’s bold strategy is paying off, setting the stage for a transformative year in the EV sector.