Xiaomi plans to launch its new electric SUV, the YU7, in July. This announcement was made by founder and CEO Lei Jun in a Weibo post on May 22, 2025.

The event on May 22, 2025, will also feature the introduction of the company’s second electric vehicle (EV) model.

During the pre-launch event, Xiaomi will not disclose the official price or begin pre-orders for the YU7.

Additionally, the company is set to unveil its self-developed XringO1 advanced mobile chip, a new flagship smartphone, and other products.

The YU7 is expected to compete with Tesla’s Model Y, which has a starting price of 263,500 yuan (US$36,579) in China.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Xiaomi’s diversification journey from smartphones to EVs follows a decade-long strategic roadmap

Xiaomi’s move into electric vehicles represents the culmination of a carefully planned expansion strategy that began years ago, not a sudden pivot.

The company, founded in 2010 as a smartphone maker, has systematically diversified into various product categories including laptops, smart TVs, and IoT devices before committing $10 billion to electric vehicles in 2021 1.

This methodical expansion mirrors their earlier premiumization strategy initiated in 2019, which focused on higher-end products to drive revenue growth and establish brand credibility in premium segments 2.

Their first EV model, the SU7, has already delivered 27,307 units with plans to reach 100,000 by November 2024, demonstrating stronger-than-expected market acceptance at an average selling price of CNY 229,000 (~$32,000) 3.

Despite reporting a net loss of CNY 1.8 billion (~$252 million) on their automotive venture, Xiaomi’s overall gross profit margin stands at 15.4%, which is competitive in the industry and suggests their diversification strategy is financially sustainable 3.

2️⃣ Chinese tech companies are challenging Tesla with feature-rich, competitively priced vehicles

The YU7 represents a direct competitive challenge to Tesla’s Model Y with specific measurable advantages in physical dimensions and range specifications.

At 196.8 inches (4,999 mm) in length, Xiaomi’s YU7 is notably larger than the Model Y’s 188.8 inches (4,797 mm), with a longer 118-inch wheelbase that provides more interior space 4.