Beijing, China — Xiaomi, the Chinese tech giant widely known for its smartphones and consumer gadgets, has officially unveiled its latest electric vehicle, the YU7 SUV, in Beijing. This launch marks another bold move in the company’s growing rivalry with Tesla in the world’s largest electric vehicle (EV) market.

The YU7 made its debut at 13 Xiaomi showrooms across the Chinese capital on Thursday. The company announced that pre-orders will open in July, as it attempts to replicate the overwhelming success of its first EV, the SU7 sedan. Since its release, the SU7 has consistently outsold Tesla’s Model 3 in China each month, showcasing Xiaomi’s growing influence in the automotive space.

A New Contender in China’s EV Arena

Analysts view the YU7 as a serious competitor to Tesla’s Model Y, which has been one of Tesla’s best-selling vehicles globally. However, Xiaomi enters a complex and crowded market, where it is still a relative newcomer. The company has also faced recent challenges, including a government investigation into a fatal crash involving an SU7 operating in assisted-driving mode. Xiaomi has since issued apologies over concerns related to marketing transparency and safety communication.

Despite these hurdles, the YU7 has generated strong initial interest. Liu Jiaxing, a 34-year-old tech worker, visited the flagship showroom in Beijing’s Oriental Plaza to see the new model firsthand.

“I like the design and the color, and the fact that the car connects seamlessly with Xiaomi’s phones and smart home products,” Liu said. “Chinese brands really understand what local consumers want now.”

Xiaomi’s Ecosystem Advantage

International observers also took note. Tom van Dillen, managing partner at Greenkern, a German consulting firm in Beijing, was impressed by the overall package, even if he felt some smart features were unnecessary.

“What stood out was the integrated showroom experience,” van Dillen said, referring to a Xiaomi-exclusive accessory section tailored to its cars. “The price point will definitely be a factor in challenging the Model Y.”

While Xiaomi has yet to officially reveal the YU7’s price, analysts at HSBC Qianhai forecast a range of 230,000 to 330,000 yuan (roughly $32,000 to $46,000). For comparison, Tesla’s Model Y starts at 263,500 yuan in China.

Big Ambitions for Production

According to projections from HSBC Qianhai, Xiaomi could ship 100,000 units of the YU7 in 2025, with that figure expected to climb to 249,000 by 2026, reflecting strong anticipated demand.

The YU7’s integration with Xiaomi’s broader digital ecosystem is seen as a key selling point, allowing users to sync the SUV with smartphones, tablets, and smart home devices. It’s a strategy that positions Xiaomi not just as an automaker, but as a lifestyle brand, fusing mobility with smart living.

Looking Ahead

As China’s EV sector continues to evolve rapidly, Xiaomi’s aggressive push into the market—despite some early setbacks—underscores the growing clout of domestic brands. With consumer sentiment shifting toward local innovations and digital connectivity, the YU7 could be another major step in Xiaomi’s transformation from tech company to full-fledged automotive player.

With its official pricing and rollout still to come, all eyes will be on July, when Xiaomi reveals the full details of the YU7’s launch. Until then, the battle for EV supremacy in China just got more interesting.