Xiaomi, widely known for its smartphones and consumer electronics, has made a spectacular entry into the electric vehicle (EV) market. Its first-ever EV, the SU7, has surpassed Tesla’s Model 3 in sales, cementing its position as a formidable competitor in China.
Within just a year of launch, Xiaomi’s SU7 outsold the Model 3 by approximately 10,000 units, signaling a shift in consumer preferences toward domestic EV brands offering cutting-edge technology at competitive prices.
Launched in March 2024, the SU7 garnered an overwhelming response. Within 27 minutes of its release, pre-orders hit 50,000, reaching nearly 89,000 by the end of the first day. By November 2024, Xiaomi had manufactured over 100,000 SU7 units, ranking among China’s top automotive startups by sales volume.
Affordability has been a key factor in the SU7’s success. With a price tag starting at around $30,000, the model offers high-performance features comparable to premium EVs, making it an attractive option for a wide range of consumers.
Tesla’s Decline in China Amid Xiaomi’s Rise
The dominance of Tesla in China is waning as Xiaomi gains momentum. In January 2025 alone, Xiaomi sold 22,897 SU7 units, while Tesla managed just 8,009 Model 3 sales.
The decline in Tesla’s sales underscores a broader trend where local Chinese brands are capturing market share through innovation, affordability, and superior technology tailored for domestic consumers.
Adding to Tesla’s challenges, its Model Y sales in China saw a steep 51.47% decline in early 2025 despite a recent update. While the Model Y remained one of China’s best-selling vehicles at the end of 2024, it now faces stiff competition from Xiaomi’s upcoming YU7 SUV.
Xiaomi YU7: The Next Big Threat to Tesla
Building on the success of the SU7, Xiaomi is preparing to launch its second EV, the YU7 SUV, aiming directly at Tesla’s Model Y and premium offerings from BMW, Mercedes-Benz, and Porsche. First unveiled in December 2024, the YU7 is set to enter production in mid-2025, with global markets in its sights.
The YU7 is designed to deliver a powerful combination of performance, range, and smart technology. It will be available in multiple configurations, including:
- A base model with a single 235 kW rear motor.
- Dual-motor all-wheel-drive variants offering up to 365 kW.
- A high-performance edition boasting an impressive 508 kW, making it a strong contender in the performance SUV segment.
Extended Range and Cutting-Edge Tech
Battery efficiency is one of the YU7’s standout features. With a choice between a 96.3 kWh lithium iron phosphate (LFP) battery and a 101.7 kWh nickel manganese cobalt (NMC) battery, the YU7 promises a long driving range.
The rear-wheel-drive variant offers between 725 to 820 kilometers on a single charge, while the all-wheel-drive versions achieve between 670 to 760 kilometers.
The SUV will also feature Xiaomi’s signature smartphone-inspired in-car technology, a high-tech infotainment system, and advanced Lidar-based autonomous driving capabilities, ensuring a futuristic driving experience.
Xiaomi’s Global Expansion Plans
Xiaomi’s ambitions are not limited to China. The company’s president recently announced that its EVs would be launched in global markets within the next few years.
The YU7 is expected to be a major part of this expansion, with production set to begin at Xiaomi’s new F2 EV factory in Yizhuang, Beijing, by July 2025.
This global push has already generated significant investor confidence. Xiaomi’s stock price hit an all-time high in February 2025 after the company revealed more details about its EV lineup, reinforcing its position as a rising force in the industry.
Financial Challenges in the Competitive EV Market
Despite impressive sales numbers, Xiaomi, like many EV manufacturers, faces financial hurdles. Aggressive pricing strategies and heavy investment in research and development have resulted in substantial initial losses in its EV segment.
This mirrors the struggles of other Chinese EV makers, including Nio and Xpeng, who have faced similar profitability challenges despite strong sales growth.
A New Era in the EV Market
Xiaomi’s rapid rise in the EV industry marks a significant shift in the market dynamics. With the SU7 already outselling Tesla’s Model 3 and the upcoming YU7 SUV poised to challenge the Model Y globally, Xiaomi is positioning itself as a major disruptor in the premium EV space.
By leveraging its expertise in smart technology, competitive pricing, and consumer-driven innovation, Xiaomi is not only challenging Tesla but also redefining expectations in the electric mobility sector.
As the company prepares for global expansion, industry experts and competitors alike will be watching closely to see if Xiaomi’s EV revolution extends beyond China’s borders.
