Xiaomi Strikes Back: Unveiling a Game-Changing Affordable Rival to Tesla

BEIJING — The Chinese smartphone brand Xiaomi is directly targeting competitor Tesla with its latest electric SUV.

The luxury YU7 SUV will be priced starting at 253,500 yuan ($35,322), as announced by CEO Lei Jun on Thursday, who highlighted that this makes it 10,000 yuan less expensive than Tesla’s Model Y, which has a starting price of 263,500 yuan in China.

Before the official price announcement, a Citi report had suggested that the YU7 SUV would be priced between 250,000 yuan and 320,000 yuan ($34,800 to $44,590), forecasting about 30,000 units sold each month. Once demand increases, Citi expects annual sales to reach between 300,000 and 360,000 units.

Xiaomi’s SU7 sedan, released last year, also offered a more competitive price compared to Tesla’s Model 3.

During Thursday’s briefing, Lei declared that the YU7 surpassed Tesla’s Model Y in several areas, though it still lacked in driver assistance features. The YU7 includes driver-assist technology, with the top version utilizing Nvidia’s Thor chip. Pre-orders began at 10 p.m. on Thursday, with deliveries anticipated within one to five weeks.

Just three minutes after pre-sales began, Xiaomi announced they had received over 200,000 orders.

Xiaomi had initially planned to introduce its YU7 in July. However, the earlier launch occurred amidst rising competition in the electric vehicle market.

The YU7 SUV was unveiled in late May, less than a year following the release of Xiaomi’s first electric vehicle, and it claims a driving range of at least 760 kilometers (472 miles) on a single charge.

This exceeds the 719 kilometers advertised for Tesla’s extended-range Model Y. The driving range remains a significant concern for consumers seeking to avoid frequent battery recharges.

Although Xiaomi has not heavily marketed its artificial intelligence capabilities compared to other brands, Thursday’s event highlighted several AI functionalities in the vehicle, such as changing songs with hand gestures and using a phone app to locate where the car is parked.

According to Lei, the YU7 also supports Apple CarPlay and Apple Music.

The smartphone and home appliance giant also unveiled a range of other products on Thursday, including eagerly awaited AI-enabled glasses.

These AI glasses, which compete with Meta’s Ray-Ban smart glasses, can adjust lens tint and scan QR codes for payments, emulating smartphone app functions popular in China. Xiaomi’s offerings also include features similar to Meta’s glasses, enabling photo and video capture, and using interactive AI to identify flowers or translate text.

The starting price for Xiaomi’s AI glasses is 1,999 yuan ($279). A company spokesperson mentioned that there are no plans to market the glasses internationally at this time. Meta’s version is not officially sold in China.