 "Xiaomi dreams big in EVs, plans to take on Tesla with a massive SUV set to launch in summer '25")
Xiaomi is making bold moves in the electric vehicle (EV) market, setting its sights on Tesla and BYD with the unveiling of its upcoming SUV, the YU7. The tech giant, best known for its smartphones and gadgets, plans to launch the all-electric SUV in the summer of 2025, signalling its ambition to become a major player in the world’s largest EV market.
The YU7, a sleek five-metre-long SUV, is Xiaomi’s answer to Tesla’s Model Y. The vehicle will be powered by a nickel-cobalt-manganese battery from Contemporary Amperex Technology Co. Ltd., delivering peak motor power of either 220kW or 288kW. Xiaomi’s shares reflected investor optimism, climbing nearly 4 per cent in Hong Kong following the announcement, though gains later moderated.
Expanding Xiaomi’s EV vision
The YU7 represents a significant step in Xiaomi’s $10 billion EV project, which billionaire founder Lei Jun has described as his final entrepreneurial venture. The company entered the EV market earlier this year with the SU7 sedan, a $30,000-plus vehicle reminiscent of Tesla’s Model 3. Building on its early success, Xiaomi aims to sell 130,000 units of the sedan by the end of the year, exceeding its initial target of 120,000.
To support its growing ambitions, Xiaomi has acquired additional land near its existing EV manufacturing plant, paving the way for expanded production. Discussions about the SUV began as far back as 2021, but Xiaomi opted to debut with the sedan to establish itself in the market. The YU7 is now positioned to broaden the company’s EV portfolio and cater to the rising demand for larger vehicles in China.
Competing in a crowded market
Xiaomi’s push into EVs comes as it seeks to diversify beyond the volatile smartphone industry, currently dominated by Apple. However, the EV space is highly competitive, with established players like Tesla and BYD already commanding significant market share. While Apple shelved its own EV project due to manufacturing challenges, Xiaomi is pressing forward, prioritising growth in its EV business over immediate profits.
Xiaomi Chief Financial Officer Alain Lam emphasised the company’s commitment to scaling its EV operations, despite slim margins in the early stages. Analysts at Citigroup are optimistic about Xiaomi’s potential, suggesting that the company could exceed shipment estimates of 273,000 vehicles in 2025 if its second-phase production facilities come online as planned.
The road ahead
As the EV race heats up, the YU7 could be a game-changer for Xiaomi, helping it carve a niche in the crowded market. While details on pricing and additional specifications are yet to be revealed, the SUV’s launch will likely solidify Xiaomi’s position as a serious contender in the EV industry, with ambitions to reshape the future of mobility in China and beyond.
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