While Tesla’s dominated the electric vehicle market for years, a new challenger’s emerging from China. Xiaomi, the tech company famous for smartphones, is shaking up the EV world with aggressive pricing and impressive sales numbers.
Xiaomi committed $10 billion over a decade to enter the electric vehicle market starting in 2021. The company launched its SU7 sedan in March 2024 with prices ranging from $30,270 to $42,020. That same year, the SU7 started outselling Tesla’s Model 3 in China on a monthly basis. By August 2025, Xiaomi delivered over 30,000 cars in a single month.
The company’s real breakthrough came with the YU7 SUV in June 2025. When pre-orders opened, Xiaomi received over 200,000 real orders in just three minutes. The company eventually reached 300,000 total orders for the vehicle. Xiaomi has expanded its retail presence to 370 locations across 105 cities in China to support this growing demand. The YU7’s advanced LiDAR-based driver assist system came standard on all models, differentiating it from competitors lacking such technology as baseline features. This strategic focus on standard advanced features reflects Xiaomi’s broader commitment to integrating disruptive innovation with volume expansion in smart mobility.
The pricing strategy is simple: undercutting Tesla notably. The YU7 base model costs about $35,300, roughly $10,000 less than Tesla’s Model Y. Higher trims maintain this advantage, with the YU7 Max priced at $46,000 compared to Model Y’s higher price tags.
Xiaomi isn’t just competing on price. The vehicles feature impressive technology, including 800-volt electrical framework that charges up 220 miles in just 15 minutes. The YU7 offers driving ranges between 472 and 519 miles. The SU7 Ultra includes a tri-motor setup producing 1,548 horsepower and accelerates from 0 to 62 mph in 2.1 seconds.
The company’s investing heavily in its future. Xiaomi allocated $1.81 billion for EV research and development in 2025. A March 2025 equity offering raised $5.3 billion to fund autonomous driving technology and battery development.
Xiaomi’s targeting 350,000 vehicle sales for 2025, with internal goals reaching 400,000 to 500,000 units. Production capacity’s ramping up quickly, with manufacturing reaching 20,000+ cars monthly. The company’s building showrooms across China to support deliveries. While Tesla owners benefit from lower maintenance costs compared to traditional luxury vehicles, Xiaomi’s aggressive pricing could reshape the total cost of ownership equation.
Tesla still leads globally, but Xiaomi’s challenge in China’s largest EV market is real and growing. The competition’s forcing the entire industry to rethink pricing and features.