Xiaomi Corp. Launches YU7 SUV to Compete with Tesla in China

In a significant move to expand its footprint in the electric vehicle (EV) market, Xiaomi Corp. has officially launched its second electric SUV, the YU7, in China. The launch event, held on June 26, 2025, at 19:00 local time, marked a pivotal moment for Xiaomi EV, the automotive unit of the Chinese technology giant. The YU7 is Xiaomi’s latest attempt to challenge established players in the EV market, notably Tesla Inc., with its popular Model Y.

Market Position and Financial Overview

Xiaomi Corp., headquartered in Beijing, China, is a leading player in the Information Technology sector, specializing in technology hardware, storage, and peripherals. The company is publicly traded on the Hong Kong Stock Exchange, with a market capitalization of approximately 1.18 trillion HKD as of June 24, 2025. Despite a high price-to-earnings ratio of 40.676, Xiaomi’s shares have been performing well, with the close price on June 24, 2025, at 56.65 HKD, nearing its 52-week high of 59.45 HKD.

Strategic Expansion and Production

In anticipation of increased demand for its electric vehicles, Xiaomi has secured a new area in Beijing for factory expansion, as reported on June 24, 2025. This strategic move is aimed at bolstering its production capabilities to meet the growing interest in its EV lineup, including the newly launched YU7.

Competitive Pricing Strategy

The YU7 is priced at 253,500 yuan (approximately US$35,360 or RM149,739), positioning it as a direct competitor to Tesla’s Model Y in the Chinese market. During the launch event, Xiaomi founder Lei Jun emphasized the company’s commitment to offering high-quality, tech-enhanced driving systems at competitive prices, challenging Tesla’s dominance in the segment.

Investor Sentiment and Market Reaction

Following the announcement of the YU7 launch, Xiaomi’s stock has shown positive momentum. On June 24, 2025, the stock price increased by 3.15%, reflecting investor optimism about Xiaomi’s foray into the electric vehicle market. Additionally, a Japanese brokerage house has raised its price target for Xiaomi, citing the company’s growth potential in the Internet of Things (IoT) and premiumization strategies.

Conclusion

Xiaomi’s entry into the electric vehicle market with the YU7 SUV represents a bold step in diversifying its product offerings beyond smartphones and consumer electronics. By leveraging its technological expertise and competitive pricing, Xiaomi aims to capture a significant share of the burgeoning EV market in China, challenging established players like Tesla. As the company continues to expand its production capabilities and refine its product lineup, Xiaomi’s venture into the automotive sector is closely watched by investors and industry analysts alike.