Peter Lyon
June 28, 2025
Xiaomi is well-known in China and abroad for its range of hair dryers and smart air-conditioners but the influential corporation is now making waves in industry circles as a producer of highly competitive electric vehicles (EVs). Last week, the massive Chinese consumer electronics company launched its YU7 crossover—a bonafide rival to the Tesla Model Y.
Reminiscent of Porsche-like styling but boasting Model 3 level pricing, the Chinese SUV starts at around $35,300 or 253,500 RMB. This is roughly $1,200 less expensive than the Tesla Model Y, even when considering its pricing on the Chinese market.
The three trim levels of the YU7—standard ($35,300), Pro ($38,900), and Max ($46,000)—are significantly less expensive than the single motor, dual motor, and dual motor performance trims of the Chinese market Model Y, which will help to thrust it front and center in the EV market.
Just to set the stage—Tesla has been aggressive in China, challenging—if not taunting—Chinese rivals to overtake its top sales figures. The challenge appears to have been accepted by Xiaomi CEO Lei Jun, who said, ”Even if we can’t beat them, we can compete, right?”
It appears that Xiaomi is going to confront Tesla head-to-head, going beyond simple competition. To start the ball rolling, more than 200,000 customers have already paid the fairly expensive $700 deposit to reserve a YU7 in the first three minutes after the car went on sale, according to Xiaomi. But before a reservation becomes a confirmed order, customers have seven days to change their minds. Those lucky enough to get access to an already-built car will need to hand over around $2,800 to reserve a YU7.
In an attempt to make the YU7 even more appealing, Xiaomi is offering a number of freebees. Nappa leather ($1,115), a HEPA air filter ($140), an electric power frunk ($278), driver and passenger zero gravity seats ($1,250), Xiaomi’s level 2 assisted driving software ($3,600), and carbon fibre door sills and mirror caps ($1,300) are all included if you choose the top trim level. Xiaomi did not specify how long the promotion would run, but we are hearing that it is only available for a short period of time.
Given that the YU7 is a better all-round car with more fetaures than the Model Y, it is surprising how Xiaomi managed to get their price to undercut the Tesla. In the meantime, Xiaomi has not said which models would be sold abroad, although it plans to begin exporting by 2027.
CARLIST THOUGHTS
The YU7 is a rather good-looking car, even if it does appear to borrow some design language from Porsche and others. By offering a better all-around package than Tesla, and while undercutting the American company’s price, Xiaomi is throwing down the gauntlet to embattled Tesla CEO Elon Musk.
