The Xiaomi YU7: Is This the Electric Crossover That Finally Puts Tesla on the Defensive?
By Kevin Williams | July 1, 2025
The late evening air in Beijing, just outside the New China International Exhibition Center, was thick with anticipation. At 9:48 PM, the buzz was palpable. Hundreds, perhaps thousands, of eager onlookers were glued to their smartphones, their fingers poised, ready to pounce on Xiaomi’s website. The company’s latest product launch event, a comprehensive affair that had showcased everything from cutting-edge vacuum cleaners and climate control systems to smartphones and tablets, had concluded mere minutes prior. Now, the focus shifted to the true headliner, the product that had everyone holding their breath: Xiaomi’s highly anticipated electric vehicle.
Whispers and speculation had been circulating for months about the Xiaomi YU7. We knew it was intended as a direct challenger to the Tesla Model Y, a sleek, Ferrari-inspired crossover that promised to shake up the automotive landscape. But the real bombshell dropped when Xiaomi CEO Lei Jun announced the YU7’s pricing – a figure that significantly undercut even the locally produced Tesla Model Y. Given the runaway success of its predecessor, the SU7 sedan, it was a foregone conclusion that the YU7 would likely command similar levels of demand. As the online reservation portal was set to open at 10:00 PM, consumers were prepared to place a roughly $700 deposit, eager to secure their place in line.
Within a mere three minutes of the portal’s activation, by 10:03 PM, Xiaomi had already logged an astonishing 200,000 reservations. By the end of the first hour, the company claimed to have received 289,000 orders, with a staggering 240,000 of those confirmed and locked in. In essence, in just sixty minutes, the Xiaomi YU7 had effectively sold out its production run until 2027. And having spent time experiencing the YU7 firsthand on Chinese roads, I can attest that Chinese buyers are about to experience something truly special. For the rest of the world, however – both domestically produced vehicles and foreign imports alike – the competitive landscape may be about to become considerably more challenging.
(Full Disclosure: My travel expenses from Ohio to Beijing, including my tour of Xiaomi’s headquarters and manufacturing facilities, were covered by Xiaomi.)
Navigating the Chinese EV Market: A New Contender Emerges
It’s no secret that interacting with Xiaomi, particularly from a Western perspective, can be an exercise in careful communication. For a brand primarily known in North America for its audio accessories, if recognized at all, to suddenly dominate Chinese sales charts and move 200,000 units of its debut car in a single year is a development that demands global attention. From our vantage point in the West, Xiaomi appears to be defying the conventional criticisms often leveled at the Chinese automotive industry.
While many other manufacturers struggle to meet even half of their factory capacities, Xiaomi is operating at full throttle, yet still finds itself unable to satisfy the insatiable demand. In China, the company is not just participating in the market; it is actively reshaping it. The market, in turn, seems to be adapting to Xiaomi’s formidable presence.
However, when it came time for Western media to understand the “how” and “why” behind this phenomenon, we were largely left to our own devices. Most English-language impressions of the SU7 were derived from rentals, personal vehicles loaned by individuals in China, or translated reviews from Chinese nationals.
Perhaps Xiaomi had valid reasons for its cautious approach. The Chinese automotive industry, despite its remarkable advancements, is currently navigating a complex and often precarious environment. We’ve seen issues ranging from scandals involving the dumping of near-new vehicles and factory overcapacity to softer-than-expected demand for fully electric models and the aggressive, almost Walmart-esque price wars initiated by BYD, clearly aimed at squeezing out competitors. Amidst this backdrop, the industry’s significant strides in EV technology can easily be overshadowed by negative headlines.
While most automotive companies must accept both the triumphs and the setbacks inherent in bringing new products to market, there’s a certain protective buffer afforded to ensure that new innovations receive a fair evaluation, shielded from external events or political climates beyond their control – or indeed, ones they may have inadvertently contributed to.
As an industry observer deeply immersed in the electric vehicle sector and closely monitoring the Chinese market, this situation has been frustrating. The success of Xiaomi’s first car in China is evident, demonstrating that established tech companies can indeed pivot successfully into automotive manufacturing – a feat that was far from guaranteed. In the West, Apple famously abandoned its long-rumored car project after years of speculation. Even within China, where the lines between tech and automotive sectors are more fluid, the notion of a smartphone and gadget company venturing into car production wasn’t an automatic recipe for success. While Huawei’s affiliated brands have found some traction, Baidu, the Chinese equivalent of Google, saw its own automotive model falter significantly in its domestic market.
Xiaomi, however, has proven everyone wrong. Consequently, when the company extended an invitation to a select group of international journalists to tour its factory and get behind the wheel of its latest creation, I seized the opportunity without hesitation.
The Genesis of Xiaomi’s Automotive Ambition
Founded in 2010, Xiaomi launched its inaugural smartphone in 2011. From there, the company strategically expanded its offerings, targeting the mid-tier and budget handset market. Their approach involved delivering iPhone-like features, competitive technical specifications, and a distinct user experience at prices that were significantly more accessible to the average consumer. This ethos of providing high-value products at attractive price points was not limited to smartphones; it extended to tablets, smartwatches, televisions, and even home appliances like washing machines, vacuum cleaners, and air conditioning units.
And now, automobiles.
When viewed through the lens of Xiaomi’s mobile phone business success, the SU7 sedan and the YU7 crossover embody the very same formula that propelled their handsets to popularity: compelling features presented in an attractive package, all offered at a reasonable price. This commitment to value is evident even in the fundamental engineering and platform architecture of their vehicles.
The SU7 and YU7 share Xiaomi’s proprietary Modena platform. While the name might suggest a revolutionary leap, my initial assessment suggests that Xiaomi isn’t necessarily reinventing the wheel in terms of core automotive engineering. Instead, they appear to be ruthlessly optimizing and streamlining existing, cutting-edge design trends to achieve cost efficiencies.
One notable innovation is the upside-down mounting of battery cells. This design, in theory, aims to channel any thermal runaway event downwards, away from the passenger cabin and towards the road. However, much of the Modena architecture seems to integrate established best practices. The use of megacasting for chassis components – a concept Xiaomi dubs “Hypercasting,” akin to Tesla’s “Gigacasting” – is a prime example. The entire rear floor assembly is a single megacast piece, complemented by partially megacast front sections. This approach aligns with what we’ve seen from manufacturers like Honda, Tesla, Zeekr, and potentially Toyota in the near future.
Xiaomi claims its design allows for easier repair of crash damage to the rear bumper and trunk area, as opposed to a single, monolithic piece. The YU7 also adopts a cell-to-body design, where the top of the battery pack is integrated as a structural element of the vehicle, rather than a separate box bolted beneath it. These are not novel technologies; they are advancements that any serious electric vehicle manufacturer would likely implement. Xiaomi’s apparent advantage lies in its ability to execute these technologies more cost-effectively and efficiently.
Crucially, Xiaomi benefits from vertical integration. Beyond essential components like battery cells, Brembo brake upgrades, and air suspension units, a substantial portion of the SU7 and YU7’s components are developed in-house. This strategy, pioneered by Tesla, allows for greater agility and speed, reducing the time and expense typically associated with negotiating with external automotive suppliers. Even their electric motors are manufactured internally, offering a distinct advantage over Western and many Asian automakers who rely heavily on extensive supplier networks, often at the cost of speed and control.
While the intricacies of vertical integration might be lost on the average consumer, the end result is a desirable product from a well-regarded brand, led by a charismatic figure. This resonates with the public, drawing parallels to the Steve Jobs-era Apple or the early days of Tesla, but with the potential to reach a significantly broader customer base. It’s hard to imagine Ford or even Apple offering a product with the same breadth of utility and accessibility as Xiaomi’s ecosystem of devices and vehicles.
Xiaomi YU7: First Impressions Behind the Wheel
My time behind the wheel of the YU7 was regrettably brief, limited to approximately 45 minutes on a semi-closed course. I also experienced the YU7 as a passenger for about two hours, traversing a variety of road conditions. Nevertheless, this extended experience was sufficient to form a strong initial impression of the vehicle. My drive encompassed leisurely neighborhood streets as well as a spirited run on a winding mountain road, allowing me to explore the car’s capabilities and limitations.
In a word, the YU7 is fantastic. It’s genuinely difficult to comprehend that this is only Xiaomi’s second foray into automotive manufacturing. Most EVs from nascent companies feel undeniably like first attempts, exhibiting design choices, material selections, and build quality that evoke a prototype or a kit car rather than a mass-produced vehicle from a major corporation.
However, the YU7 transcends these expectations. Its driving dynamics are remarkably refined, with very little to fault. Like virtually every electric vehicle on the market today, the YU7 is undeniably quick. With a formidable 680 horsepower delivered through Xiaomi’s in-house V6s electric motors, it significantly outperforms the standard Tesla Model Y in straight-line acceleration.
Yet, it is the YU7’s chassis, ride quality, and suspension tuning that truly set it apart. These elements work in remarkable synergy, resulting in what I consider to be the most comprehensively engineered Chinese car I have ever experienced. This is not a qualified statement; I am not saying it’s merely “good for a Chinese car.” This vehicle, in my opinion, is a legitimate Porsche-killer.
Xiaomi representatives confirmed that the primary benchmarks for the YU7 were the Porsche Cayenne and Macan (both internal combustion and electric variants), alongside the Tesla Model Y. This influence is palpable. The YU7 is exceptionally sharp to drive. When entering a corner at speed, it maintains a remarkably flat attitude, aided by the active pitch correction system integrated into its air suspension. The steering, while light even in sport mode, is impressively communicative, offering clear feedback to the driver.
The closest comparable driving experience I recall in recent memory would be the gasoline-powered Acura Integra A-Spec I tested in early 2023. I struggle to identify any US-market electric crossover that offers such an engaging and enjoyable driving experience, particularly at an estimated price point of around $47,000. The only minor drawback observed was the limited grip offered by the tester’s low-rolling-resistance tires, an easily remedied issue by opting for the available Michelin Pilot Sport tires.
However, much like any well-tuned suspension system, the YU7 excels at multitasking. Its active pitch control not only enhances cornering but also mitigates the jerky sensation often associated with regenerative braking and actively works to absorb road imperfections. This transforms the YU7 into a supremely comfortable cruiser. The rear seats are designed for ultimate relaxation, reclining to an extent that rivals even Maybach luxury, allowing occupants to recline and enjoy the YU7’s exceptionally smooth ride. I suspect the current Tesla Model Y does not offer a comparable level of ride comfort, though I have not yet experienced the updated ‘Juniper’ model.
Relinquishing the YU7’s keys was a genuine disappointment. I yearned for more time with this vehicle; it was an absolute delight to drive. If the SU7 sedan offers a comparable driving experience, I can fully understand why it has instilled such concern in industry leaders like Ford CEO Jim Farley.
The YU7’s exceptional driving dynamics are merely one facet of its impressive package. The rest of the vehicle is equally compelling. Xiaomi’s insistence that the YU7 is positioned as a more premium offering than the SU7 sedan is immediately apparent when comparing the two. While the SU7 is by no means a budget vehicle, the YU7 exhibits a distinct elevation in interior luxury and perceived quality. The cabin is exceptionally quiet, thanks to double-laminated glass – a feature previously reserved for high-end luxury vehicles. The YU7 also boasts zero-gravity seats for both driver and front passenger. Every control feels precisely weighted, and in the vehicles I examined, not a single trim piece or panel was misaligned or felt cheap to the touch. In stark contrast, a similarly priced Tesla Model Y feels comparatively hard, cheap, and less refined.
Furthermore, the Tesla also feels less technologically integrated. The YU7’s software and hardware suites are deeply rooted in Xiaomi’s smartphone ecosystem, rather than traditional automotive interfaces. This allows for a wealth of integrated accessories, available for purchase through the Xiaomi store. Beyond the innovative steering wheel button array for infotainment control, Xiaomi has ingeniously devised a system for further customization. Several points within the cabin are powered and capable of accommodating various accessories, from a GoPro camera to a phone holder equipped with integrated wireless charging.
The in-car software is extraordinarily responsive. It offers the full complement of standard Chinese entertainment and navigation applications, but also includes gems like built-in Apple Music and wireless Apple CarPlay – a feature surprisingly uncommon in Chinese vehicles. Most impressively, the Xiaomi interface supports phone-style multitasking. Users can simultaneously run Apple Music, Apple CarPlay, or other applications, docking them alongside other functions. This means you can enjoy Apple CarPlay while simultaneously utilizing Xiaomi’s native navigation and advanced driver-assistance systems, all displayed concurrently on the same screen. The execution is exceptionally polished and intuitive, even though the menus I encountered were exclusively in Chinese. An English-language version would undoubtedly be a game-changer.
The Shifting Sands of the EV Market: Tesla’s Vulnerability in China and Beyond
The YU7’s impressive capabilities may not be confined to the Chinese market. Xiaomi has indicated its intention to begin exporting vehicles outside of China starting in 2027, though specific models like the YU7 or SU7 have yet to be confirmed for these markets. Regardless of the specific models, these potential exports should undoubtedly cause considerable anxiety among established automakers in Western countries.
While I had some prior knowledge of Xiaomi before my visit, I significantly underestimated the brand’s profound importance to Chinese consumers. Whether driven by national pride or simply the appeal of consistently high-quality products, Chinese consumers demonstrably like Xiaomi. Our convoy of grey and green SU7 sedans attracted considerable attention from passersby and pedestrians alike. Amateur videos of our convoy departing Beijing quickly circulated across Chinese social media platforms.
This level of public enthusiasm and admiration is more characteristic of a globally recognized tech giant than a traditional automotive manufacturer. I am not aware of any company, within China or elsewhere, that can rival Xiaomi’s brand recognition and consumer engagement. What is particularly concerning for every other automaker is that Xiaomi is not just building hype; it is backing it with a demonstrably superior product. In China, Xiaomi doesn’t need to convince anyone; the overwhelming demand, with the YU7 effectively selling out until 2027 within an hour of reservations opening, speaks for itself.
Consequently, this vehicle represents an existential threat to the established order, both within and beyond China’s borders. How can any established brand realistically compete with a company possessing such a vast, pre-existing fanbase of loyal customers, coupled with an unparalleled ability to scale production at lightning speed? Vehicles like the YU7 will undoubtedly accelerate the consolidation of China’s EV market, as numerous brands grapple for a diminishing pool of buyers – specifically, at least 240,000 fewer potential customers than before.
This includes, and perhaps especially, Tesla. While driving the YU7, I found it increasingly difficult to comprehend why a discerning buyer would opt for any other vehicle in this segment, including the Tesla Model Y, which is a concerning prospect for the American EV leader. In theory, Tesla should be well-positioned to weather the storm of declining sales in China, but this is not proving to be the case.
It’s true that Tesla’s global sales figures have recently been significantly propped up by the Chinese market. However, Elon Musk’s increasingly controversial public pronouncements, coupled with a stagnant model lineup and a lackluster facelift of its most popular vehicle, have contributed to declining sales worldwide. While China has remained somewhat insulated from Musk’s more egregious antics, sales of the Model 3 have struggled to rebound, especially since the arrival of the SU7. The Model Y has maintained its position on China’s sales charts largely through incentives like zero-percent financing and enhanced trade-in valuations.
However, the sustainability of these strategies is now in question. Anecdotal evidence from my recent trips to China suggests that an increasing number of local consumers are beginning to perceive Tesla’s brand as somewhat passé. Now, with the YU7 demonstrably outperforming the Model Y in virtually every conceivable metric, Tesla’s continued reliance on the Chinese market’s unwavering demand for the Model Y appears increasingly delusional. The primary constraint for Xiaomi is currently its production capacity; if Xiaomi could manufacture more YU7s and SU7s, consumer demand would likely absorb the additional supply. The SU7 sedan, for instance, already carries a year-long waiting list.
If the YU7 successfully breaks through the confines of the Chinese market and reaches international shores, automakers globally should be genuinely concerned, especially if it can replicate the Model Y’s competitive pricing outside of China. This is not just another electric crossover; it is a meticulously engineered, compellingly priced, and highly desirable vehicle that could redefine expectations and challenge the established leadership in the global EV market.
The automotive industry is at a pivotal moment. If you’re considering your next vehicle or exploring the future of personal transportation, now is the time to engage with the rapidly evolving landscape. We encourage you to research the latest innovations, compare the offerings from emerging and established players, and perhaps even experience firsthand the vehicles that are setting new benchmarks. Your journey into the future of driving begins with informed exploration.
