China’s Xiaomi YU7 launch shakes up EV landscape

On June 26, mainland China’s Xiaomi — a large maker of smartphones and consumer electronics products turned carmaker — opened orders for its YU7 electric sport utility vehicle (SUV). The company saw tremendous early response, despite an already-crowded electric vehicle (EV) industry in China. This success offers some key insights into China’s current automotive industry trends. 

Xiaomi said it received more than 240,000 non-refundable orders for the Xiaomi YU7 in the first 18 hours after its sales launch. This far exceeded market expectations.  

 Xiaomi’s first car, the SU7 large sedan, caught the attention of competing auto executives as well when it launched in Spring of 2024. Ford CEO Jim Farley identified Xiaomi as a company to watch early on. The reaction to the YU7 suggests the SU7 success may not have been a one-off event.  

The YU7 is far from the only vehicle to have a strong early reservation bank, but few have been this strong. The sustained momentum suggests a lower likelihood of a decline in interest, a pattern that has affected some other vehicle launches.  

In most cases, when an automotive startup arrives, the company must raise awareness of the brand and the vehicle, before any chance of consumer consideration. Consumers, after all, can’t consider buying a vehicle if they do not know it exists.

Xiaomi has an advantage in terms of brand awareness and a charismatic CEO. The Xiaomi brand is a household name in China already, with a massive user base of smartphones and electronics products. Lei Jun, its founder and CEO, also has a fan base on Weibo of 26.8 million followers. He frequently posts Xiaomi products and news, ranging from new smart tablets, AI Glasses, the YU7 and the impressive lap time set by the SU7 Prototype in German’s Nürburgring racetrack.  

About 15 months ago, the smartphone maker entered into the auto sector with its first electric car, the SU7. The electric sedan became an instant hit on the Chinese market with nearly 89,000 orders booked in the first 24 hours.  

Amid the backdrop of tepid consumer spending and cutthroat competition in China, the sensational sales of the YU7 demonstrates Xiaomi’s capacity to capture the hearts of China’s young car buyers in the electric vehicle industry era. Over the past six months, only a few new launches in China managed to secure significant order volumes, and nothing at the scale of the Xiaomi YU7.  

Commenting on the YU7’s record-breaking performance, Lei Jun said the company still faces many challenges. Indeed, Xiaomi’s top priority is to bring additional capacity online to ramp up YU7 deliveries to its customers. With Xiaomi kicking off test drives for interested buyers across China, it is set to translate refundable reservations into locked-in orders. The significant order backlog, however, may also lead to rising cancellations, driving buyers to other brands.

Xiaomi has already experienced order backlogs for the SU7 sedan because of production bottlenecks and robust demand. S&P Global Mobility registration volumes show demand for the SU7 has been growing steadily over the past 12 months, in contrast to most of its competition. Since January 2025, the SU7 has ranked as the best-selling sedan in China’s E-Car, large sedan market in terms of wholesales volumes. The Xiaomi EV also outsold the Tesla Model 3.  

Xiaomi’s app suggests delivery wait time for the YU7 Standard and Pro variants, which are the entry-level and the mid-tier trims, will take about 49 to 58 weeks for any new order placed after June 30. Xiaomi has already sold out its production capacities this year for the YU7.  

The SU7 and YU7 are Xiaomi’s answer to challenge Tesla’s Model 3 and Y. In China’s battery electric vehicle market, there is no lack of models taking aim at the Tesla EVs. Examples include the Zeekr 007 and 7X, NIO ET5 and ES6, and the IM L6 and LS6. Although these new launches greatly expanded customer choice, none of them manage to deliver significant volumes in a crowded market space, something that Xiaomi hopes to achieve.    

Putting aside other influence factors, YU7 is a compelling product. It is equipped with Xiaomi’s V6Plus electric motor, a dual-motor system which produces a remarkable output of 508kW (690ps), enabling it to accelerate from 0 to 100 km/h in just 3.23 seconds.  

The YU7 motor offers greater power and faster acceleration but also features a larger battery and reduced charging time, thanks to its 800V architecture compared to Tesla’s Model Y Performance.  

The YU7 is also equipped with active suspension technologies, including Continuous Damper Control (CDC) and air suspension—features that are not available in the new, more expensive Model Y.

Xiaomi’s YU7 offers a standard LiDAR-based level 2+ automated driving system. In contrast, Tesla still charges its FSD software for 64,000 yuan.  

Buyers are also drawn to Xiaomi’s HyperVision Panoramic Display. The customizable 1.1-meter-long display employs a triple mini-LED screen array to project comprehensive information onto the lower windshield area, enhancing the driving experience. To attract Apple product users, both the YU7 and SU7 also supports deep Apple ecosystem integration.  

Early market study on YU7’s customer profiles also revealed some interesting facts. With the YU7, Xiaomi seems to have earned orders from those who were not in the market for a new car, at least not this year. Given the long delivery wait time, high customer loyalty will help Xiaomi translate its existing orders to actual deliveries.  

There is also a considerable portion of female buyers, who would like a more affordable, good-looking sporty alternative to the likes of Porsche Macan and BMW X3. Both models from German brands have seen sharp sales declines in China over the past year due to increased competition.  

Xiaomi’s rise in China’s EV market will not just have an impact on Tesla but other premium car makers. The smartphone maker has cultivated a loyal fan base. While the Xiaomi YU7 may impact the Model Y's sales, Tesla's established reputation as a leading EV brand means that many consumers will continue to favor it over newer entrants.  

In a live-streaming event on July 2, Lei revealed 52% of Xiaomi YU7 buyers are iPhone users.  Roughly 30% of the orders are from female buyers, a higher ratio compared to the SU7 during its initial launch. He added that the average age of SU7 buyers is 30 years, while YU7 buyers average 33 years.  

As the Chinese market transitions toward smart mobility, capturing the young demographic will undoubtedly provide Xiaomi with a competitive advantage over legacy car makers.