In a significant move in the intensifying electric vehicle price war, Chinese tech giant Xiaomi has unveiled its luxury YU7 SUV at a starting price of 253,500 yuan ($35,322), undercutting Tesla’s Model Y by 10,000 yuan. Xiaomi CEO Lei Jun announced the pricing on Thursday, positioning the company directly against its rival Tesla in the Chinese electric vehicle market.
The YU7 SUV’s pricing was revealed during a launch event in Beijing, where Lei Jun highlighted that the vehicle not only matches but exceeds Tesla’s Model Y in several key metrics. The Model Y starts at 263,500 yuan in China. Prior to the official announcement, a Citi report had forecasted the YU7’s price to be between 250,000 yuan and 320,000 yuan, predicting monthly sales of around 30,000 units and annual sales ranging from 300,000 to 360,000 units once production stabilizes.
Xiaomi’s entry into the electric SUV market comes less than a year after the company launched its first electric car, the SU7 sedan, which was also priced competitively below Tesla’s Model 3. The YU7 SUV boasts a driving range of at least 760 kilometers on a single charge, surpassing the 719 kilometers advertised for Tesla’s extended-range Model Y. This feature is particularly significant for consumers concerned about battery charging frequency.
The YU7 comes equipped with advanced driver-assist software, powered by Nvidia’s Thor chip in its most advanced version. While Lei Jun claimed the YU7 outperforms Tesla’s Model Y in several areas, he acknowledged that it still lags behind in driver-assist capabilities. Pre-sales for the YU7 began at 10 p.m. on the day of the announcement, with deliveries expected within one to five weeks.
In addition to the YU7 SUV, Xiaomi unveiled several other innovative products, including artificial intelligence-connected glasses. These smart glasses, priced starting at 1,999 yuan ($279), offer features such as adjustable lens tint, QR code scanning for payments, photo and video capture, and interactive AI for tasks like flower identification and text translation. Currently, Xiaomi has no plans to sell these glasses overseas.
Xiaomi’s aggressive pricing strategy and feature-rich offerings reflect the intensifying competition in China’s electric vehicle market. The company’s ability to undercut Tesla’s pricing while providing competitive or superior features could potentially disrupt the market dynamics and challenge established players like Tesla.
