With a price that's 10,000 yuan more precise and cheaper, can the Xiaomi YU7 defeat the Tesla Model Y?
Tech Planet (WeChat ID: tech618)
Text by Ren Xueyun
Cover image source | Doubao AI
Before the official release of Xiaomi's first SUV, the Xiaomi YU7, there were multiple speculated price versions. Lei Jun, the CEO of Xiaomi Group, Lu Weibing, the President of Xiaomi Group, and Lin Bin, the co-founder and vice chairman of Xiaomi, have made multiple statements regarding the price of the Xiaomi YU7.
During a live broadcast, Lu Weibing said that the Xiaomi YU7 is different from what people think. The standard version of the YU7 has a higher configuration than the SU7 Pro. "The price won't be cheap this time. We're going to compete in terms of product, technology, and user value." Meanwhile, some netizens suggested a price of "255,900 yuan" in Lin Bin's comment section, and Lin Bin directly replied "No." Later, Lei Jun also indirectly expressed his stance on social media, hinting that the price difference between the standard version of the YU7 and the standard version of the SU7 won't be just 20,000 - 30,000 yuan.
It wasn't until June 26th that the price of the Xiaomi YU7 was officially announced. The standard version is priced at 253,500 yuan, the Pro version at 279,900 yuan, and the Max version at 329,900 yuan. An automotive industry insider said that this price meets expectations. Xiaomi often enters the market with a strategy of "offering better configurations than competing products in the same class and then lowering the price by 10,000 - 20,000 yuan."
In the SUV market, the Tesla Model Y dominated the sales charts in 2024 with 1.09 million units sold globally and 480,000 units in the Chinese market. Xiaomi chose to launch a direct challenge. The starting price of the standard version of the YU7 is 253,500 yuan, exactly 10,000 yuan lower than the starting price of the Model Y at 263,500 yuan.
The market response quickly confirmed the impact of this strategy: Data from Xiaomi's official Weibo account for its cars shows that within three minutes after the Xiaomi YU7 started accepting pre - orders, the number of firm orders exceeded 200,000, and reached 289,000 in one hour.
At the press conference, Lei Jun comprehensively compared the Xiaomi YU7 with the Model Y. When the Xiaomi Yu 7 enters the price range of the Model Y, how will the competition landscape in the new energy vehicle market be rewritten in this confrontation between the old and new forces?
First - hour sales match the Model Y, the landscape of the 250,000 - yuan SUV market changes
The competition in the SUV market is intensifying. Data from the Passenger Car Association shows that in the first quarter of 2025, the total retail sales of the domestic SUV market reached 2.501 million units, a year - on - year increase of 4.7%.
Looking at the vehicle model layout, in 2024, the number of SUV models on sale reached 371, 153 more than sedans. In 2025, the market competition further intensified. The number of popular SUV models with monthly sales exceeding 10,000 increased sharply from 18 in the same period of 2024 to 27, indicating that the competition among leading models in the segmented market has reached a white - hot stage.
In the price range of the Xiaomi YU7, there are models such as the Tesla Model Y, Geely Zeekr 7X, Avita 07, the all - new IM LS6, Zhijie R7, Li L6, LeDao L60, and the upcoming Li i6 competing intensively.
On the morning of June 26th, just a few hours before the official release of the Xiaomi YU7, Zhijie Automobile suddenly announced a price cut across the board: a direct cash subsidy of 20,000 yuan, and customers who place orders starting from June 27th can enjoy up to 60,000 yuan in car - purchasing benefits. Among them, the price of the extended - range version of the Zhijie R7 dropped to 229,800 - 299,800 yuan, and the price of the pure - electric version dropped to 239,800 - 319,800 yuan.
This targeted pricing strategy is undoubtedly the first offensive against the upcoming Xiaomi YU7 in the white - hot market competition, and it also indicates that the competition among models in this price range will become even more intense.
However, despite Zhijie Automobile's first move of launching an offensive by cutting prices, at the press conference, Lei Jun focused on the Tesla Model Y. He compared the performance parameters of the Xiaomi YU7 and the Model Y item by item, including battery life, battery capacity, 0 - 100km/h acceleration, interior space, and charging efficiency.
Actually, as early as the launch of the Xiaomi SU7, Lei Jun had targeted Tesla as a benchmark. According to data from the Passenger Car Association, as of April 2025, the cumulative sales of this model, which started delivery in April 2024, reached 240,000 units, surpassing the market performance of the Model 3 in the same period. In 2025, the average monthly sales of the Xiaomi SU7 remained stable above 26,000 units, continuously leading the segmented market of pure - electric sedans priced over 200,000 yuan.
This "benchmarking against Tesla" market approach was evident again in the competition between the Xiaomi YU7 and the Model Y.
According to data from the China Automotive Technology and Research Center, the sales volume of the Model Y in China in April was 19,984 units, a year - on - year decrease of 24.2%. In May 2025, the sales volume of the Model Y in China increased to 24,770 units. The newly launched Xiaomi YU7 matched the Model Y in terms of the number of orders in just one hour.
A Tesla salesperson told Tech Planet that the brand has not yet launched a special discount strategy for the Xiaomi YU7. However, he said that indeed many consumers are actively comparing the two models. "Some users who focus on intelligent configurations clearly prefer Xiaomi."
However, in the view of industry insiders, the Tesla Model Y will still maintain its market share in the segmented market due to its brand and the accumulation of battery, electric drive, and electronic control technologies. In the short term, the Xiaomi YU7 is more likely to have a direct impact on other new - force models at the same price range, and will first divert consumers who were originally considering other new - force brands.
The explosion of YU7 orders may rewrite the annual sales trajectory of Xiaomi cars
On the day of the press conference, a consumer who intended to buy the Xiaomi YU7 opened the live broadcast and left his phone number on the information card. Within less than 10 minutes, he received a call from a Xiaomi salesperson, who warmly invited him: "Are you available to come to the store to see the car tomorrow afternoon?" The salesperson also specifically reminded him not to place an order on the app, saying "It's clearer to lock in the order at the store."
However, after the press conference ended, the consumer didn't receive a friend request from the salesperson on WeChat, and subsequent communication came to a halt. In contrast, the number of firm orders for the Xiaomi YU7 exceeded 289,000 in one hour.
What does 289,000 orders in one hour mean?
Comparing with the market performance of the Xiaomi SU7, the number of firm orders within 24 hours after its launch was 88,898, while the YU7 exceeded this number by three times in just one hour.
Comparing horizontally with other new - force brands, in 2024, NIO's annual sales were 221,900 units, and XPeng's delivery volume just exceeded 190,000 units. Even Li Auto, which had annual sales exceeding 500,000 units, had an average monthly sales volume of only over 40,000 units. This means that the number of "firm orders" for the YU7 in just one hour exceeded 1.2 times the annual sales of NIO and XPeng, and was almost equivalent to the total sales of Li Auto in nearly seven months.
The achievement of 289,000 firm orders in the first hour of the YU7 not only set a new record for Xiaomi cars but also triggered a chain reaction in the terminal market. On the day after its launch, the number of customers at the Xiaomi store in Xilongduo, Shijingshan, Beijing, increased several times compared with normal days. The salesperson said that all test - drive slots for that day were fully booked and customers needed to make an appointment in advance.
In Lei Jun's sales expectations for the YU7, "surpassing last year's SU7" is the basic goal. But from a business logic perspective, the sales performance of the YU7 is directly related to Xiaomi's annual sales target of 350,000 cars.
Among Xiaomi's three car models currently, the SU7 Ultra, with a starting price of 529,900 yuan, is difficult to achieve high - volume sales due to its high - end positioning. The SU7 series priced at 215,900 - 299,900 yuan and the YU7 series starting at 253,500 yuan form the main product matrix.
According to Xiaomi's financial report, in Q1 2025, the Xiaomi SU7 series delivered 75,869 new cars. At the same time, Xiaomi Automobile officially announced that in April and May this year, the monthly delivery volume of Xiaomi cars exceeded 28,000 units. That is to say, the cumulative delivery volume in the first five months exceeded 130,000 units. If this growth rate continues, the SU7 series can contribute about 300,000 units in annual sales.
If the conversion rate of the 289,000 orders for the YU7 in the first hour is only calculated at 30%, this single model can contribute 80,000 - 90,000 units in sales. The combined sales of the two models will easily exceed the target of 350,000 units.
At the same time, the dual - vehicle drive model of "sedan + SUV" will also be a key strategy for Xiaomi cars to achieve its sales target in the next stage. The coordinated performance of the YU7 and the SU7 directly determines whether Xiaomi cars can achieve its target in its first full sales year.
From the perspective of the business closed - loop, the profit - making process of Xiaomi cars is also closely related to the sales target.
At the Xiaomi Investor Conference in early June, Lei Jun said that Xiaomi's car business is expected to achieve profitability in the third to fourth quarter of this year. Comparing with the financial report of the first quarter of this year, the losses of Xiaomi cars are indeed gradually narrowing, from 1.8 billion yuan in the second quarter of 2024 to 500 million yuan in the first quarter of this year. After the scale effect of the SU7 and YU7 kicks in, this profit - making process may accelerate further.
Delivery remains a crucial battle
Xiaomi cars don't lack demand, but the current key challenge lies in the production capacity bottleneck on the supply side.
"Customers who locked in their orders within the first two minutes may be able to pick up their cars this year," a Xiaomi car salesperson said, but he also noted that this is just an estimated time. A consumer who locked in his order about one minute after the pre - order started said that the estimated delivery period for his YU7 order on the app is 17 - 22 weeks.
The production capacity data more intuitively reflects the delivery pressure. Although the Xiaomi SU7 has been on the market for over a year, customers still need to wait about 8 months if they place an order now. Based on the production capacity of 28,000 units delivered by the first - phase factory in May, the outstanding orders for the SU7 have exceeded 200,000 units. The Xiaomi YU7 locked in 122,000 orders just three minutes after its launch. Combining the two, Xiaomi cars currently face a delivery pressure of at least 350,000 units.
According to the plan, the second - phase factory of Xiaomi will be completed in June this year. After that, it needs to go through internal acceptance by Xiaomi and verification and filing by the local Housing and Urban - Rural Development Bureau. It is expected to be officially put into production in July - August. After the two factories are put into operation, the total rated annual production capacity will reach 300,000 units.
Judging from the production capacity release rhythm, without implementing three - shift production, with the existing production capacity of the first - phase factory and the ramping - up of production capacity in the second - phase factory, it is estimated that it will take about one year to complete the delivery of Xiaomi's current outstanding orders of over 350,000 units.
A Xiaomi salesperson said, "Due to the high popularity, the delivery period of the YU7 may be even longer." It's worth noting that the delivery period issue is not a new problem. When the SU7 started delivery last year, the delivery period reached about 10 months, which once led to a large number of users canceling their orders and even switching to Tesla and other brands that could provide immediate delivery.
A consumer who ordered the YU7 told Tech Planet that he hasn't completed the order - locking process yet, but he has received a commitment from a salesperson of another car company. If he chooses to buy a car from that brand, he can get a 5,000 - yuan deposit subsidy to cover the potential losses from locking in the Xiaomi order.
Facing the continuously high number of orders, Xiaomi is indeed trying to break the bottleneck through production capacity expansion. On June 19th, Xiaomi Jingxi Technology Co., Ltd. won a bid for a 485,100 - square - meter industrial land in Beijing Yizhuang New City for 635 million yuan. This land is adjacent to the second - phase project of Xiaomi cars and is 100% owned by Xiaomi Smart Technology Co., Ltd., clearly related to the car business.
By comparison, the first - phase factory of Xiaomi cars covers an area of 718,000 square meters with an annual production capacity of 150,000 units. The second - phase factory is also planned to have a production capacity of 150,000 units and will be completed in mid - June. Although the third - phase land of 485,100 square meters is slightly smaller in area, the annual production capacity is expected to be considerable under the synergistic effect.
In any case, the Xiaomi YU7 has already received a large number of orders. Whether Xiaomi can solve the delivery problem has become a crucial battle for Xiaomi cars in the intelligent electric vehicle race.
This article is from the WeChat official account “Tech Planet” (ID: tech618), author: Ren Xueyun, published by 36Kr with authorization.