Xiaomi YU7: A New EV Powerhouse Redefining the Market, Leaving Tesla in its Wake
By Kevin Williams
October 15, 2025
The air in Beijing crackled with an almost palpable energy. It was late on a Tuesday evening, just outside the expansive New China International Exhibition Center. Crowds, a sea of faces illuminated by the glow of their smartphones, were fixated on Xiaomi’s website, a collective digital pilgrimage underway. The company’s latest product unveiling – a suite of smart home devices, from advanced vacuum cleaners and climate control systems to cutting-edge smartphones and tablets – had concluded mere minutes prior. Yet, the true excitement, the electric hum that resonated through the gathering, was reserved for the debut of Xiaomi’s highly anticipated electric vehicle.
The Xiaomi YU7, a vehicle already whispered about in awe-inspiring tones, a sleek crossover that bore a striking resemblance to the iconic lines of a Ferrari, was poised to enter the market with a singular, audacious objective: to directly challenge and ultimately supplant the Tesla Model Y. What amplified the anticipation was the announcement made by Xiaomi’s visionary CEO, Lei Jun. He revealed that the YU7 would not only compete but would decisively undercut the price of the China-manufactured Tesla Model Y by a significant margin.
Given the runaway success of its sedan counterpart, the SU7, it was a foregone conclusion that the YU7 would mirror those impressive sales figures. As the clock ticked towards 10:00 PM, the online reservation portal was set to open, and the assembled throng was ready. The plan was simple: place a deposit of approximately $700, secure a spot in line, and await the arrival of this revolutionary new electric crossover.
The digital dam burst at precisely 10:03 PM. Within that fleeting moment, Xiaomi reported an astonishing 200,000 reservations. By the end of the first hour, that number had swelled to a staggering 289,000, with a remarkable 240,000 of those confirmed as serious buyers. In less than sixty minutes, the Xiaomi YU7 had effectively sold out, with production slots extending well into 2027. This wasn’t just a product launch; it was a seismic shift in the automotive landscape.
Having had the privilege of experiencing the YU7 firsthand on the dynamic roads of China, I can attest that Chinese consumers are about to experience something truly special. For the rest of the world, however, whether domestic manufacturers or international contenders, the situation is becoming increasingly precarious. The competitive landscape, particularly for established players, is becoming even more challenging than anticipated.
(Full Disclosure: My travel expenses from Ohio to Beijing, including accommodation and access to Xiaomi’s headquarters and manufacturing facilities, were covered by Xiaomi for the purpose of this review.)
The inherent difficulty in obtaining concrete information from Xiaomi, perhaps by design, underscores their strategic approach. When a brand, largely recognized in North America for its consumer electronics like earbuds, suddenly dominates China’s automotive sales charts, selling a staggering 200,000 units in a single year, the global automotive industry takes immediate notice. From our vantage point in the West, Xiaomi’s entry into the automotive sector appears to defy the conventional criticisms often leveled at Chinese manufacturing.
While many other automotive manufacturers grapple with underutilized factory capacity, Xiaomi operates at full throttle, yet still struggles to meet the overwhelming demand for its vehicles. In China, the company is not merely participating in the market; it is actively reshaping it, or perhaps, the market is enthusiastically adapting to its presence.
However, for those in the West seeking to understand the ‘how’ and ‘why’ behind this extraordinary success, or the profound allure Chinese consumers feel towards Xiaomi’s debut vehicle, information has been scarce. Most English-language reviews of the SU7 have been derived from anecdotal observations, rentals, or personal vehicles loaned out within China, or have relied on the gracious translations of Chinese auto enthusiasts.
Perhaps Xiaomi’s cautious approach is rooted in a keen awareness of the current volatile climate within the Chinese automotive industry. Despite its remarkable advancements, the sector faces a confluence of challenges: instances of questionable used car market practices, an overabundance of manufacturing capacity, a softening demand for pure electric vehicles, and the aggressive price wars initiated by giants like BYD, seemingly designed to squeeze out competitors, both domestic and international. These very real strides in EV innovation can, at times, be overshadowed by negative headlines.
Even when acknowledging the industry’s complexities, there’s an inherent advantage in ensuring new products receive fair evaluation and are insulated from external events or political climates that are beyond their control, or which they may have inadvertently contributed to.
As an industry observer with a deep focus on electric vehicles and a keen interest in the Chinese market, this information gap has been frustrating. The evidence of Xiaomi’s immense success in China is undeniable, vividly demonstrating the potential for technology companies to successfully pivot into automotive manufacturing—a feat that was far from guaranteed.
In the West, Apple’s long-rumored automotive ambitions officially dissolved after years of speculation. Even in China, where the synergy between tech giants and established automakers is more pronounced, the notion of a smartphone and gadget company successfully building a car was not an assured formula for triumph. While Huawei has seen some success with its associated automotive ventures, Baidu, the Chinese equivalent of Google, experienced a significant market failure with its own vehicle offering.
Xiaomi has definitively proven such skepticism unfounded. Therefore, when the company extended an invitation for a select group of international observers to tour its manufacturing facilities and experience its latest automotive creation, the YU7, I seized the opportunity.
The Genesis of Xiaomi’s Automotive Ambition
Xiaomi, a relatively nascent company founded in 2010 with its first smartphone launching in 2011, embarked on a strategic expansion. Its initial focus was on the mid-tier and budget smartphone segments, offering features akin to premium brands, compelling technical specifications, and its own distinctive user interface, all at prices that were significantly more accessible to the average consumer’s budget.
From the Mi 1 in 2011, Xiaomi consistently broadened its smartphone portfolio, introducing models that ranged from entry-level to high-end, all adhering to the core philosophy: deliver competitive specifications, robust build quality, a unique user experience, and compelling value compared to established players like Apple, LG, and Samsung.
This successful ethos was subsequently extended beyond smartphones to a diverse array of technology products, encompassing tablets, smartwatches, televisions, and even household appliances such as washing machines, vacuum cleaners, and air conditioning units.
And now, automobiles.
The Xiaomi SU7 sedan and its successor, the YU7 crossover, embody the same strategic blueprint that propelled Xiaomi’s mobile division to prominence: a potent combination of advanced features, wrapped in an aesthetically pleasing design, and offered at a price point that defies conventional market expectations.
A cursory examination of the underlying chassis and platform that underpins its vehicles reveals a commitment to efficiency and innovation. The SU7 and YU7 are built upon Xiaomi’s proprietary Modena platform. While the name itself suggests an ambitious undertaking, a closer look reveals that Xiaomi isn’t necessarily reinventing the wheel but rather optimizing and refining existing best practices with remarkable efficiency.
Certainly, there are notable design choices and self-developed innovations, such as the innovative upside-down mounting of battery cells. This design, in theory, is engineered to channel any thermal runaway event away from the passenger cabin and towards the road below, enhancing safety. However, the fundamental Modena architecture appears to be a masterclass in integrating and streamlining top-tier, modern automotive design trends with an unrelenting focus on cost optimization.
A prime example of this optimization is the extensive use of megacasting for chassis components. Xiaomi terms this process “Hypercasting,” a concept remarkably similar to Tesla’s “Gigacasting.” This advanced manufacturing technique allows for the creation of large, single-piece structural components, significantly reducing the number of parts, welding, and assembly time. The entire rear floor of the YU7 is megacast, with significant portions of the front structure also benefiting from this technology—a methodology now being adopted by leading automakers such as Honda, Tesla, and Zeekr, with Toyota reportedly exploring similar avenues.
Xiaomi claims that its megacast rear crash bar and trunk portal are designed to mitigate damage in the event of an accident and facilitate more straightforward repairs compared to traditional multi-piece designs. Furthermore, the YU7 incorporates a “cell-to-body” battery design, where the top casing of the battery pack is integrated as a structural element of the vehicle’s chassis, rather than being a separate, bolted-on enclosure. These are not novel technologies; rather, they represent the foundational elements that any manufacturer serious about competing in the electric vehicle space would implement.
Xiaomi’s strategic advantage lies in its ability to implement these technologies with a heightened emphasis on cost-effectiveness and manufacturing efficiency. A key element of this strategy is vertical integration. With the exception of the battery cells themselves, premium Brembo brake upgrades, and air suspension units, a vast majority of the components in the SU7 and YU7 are developed in-house by Xiaomi.
This vertically integrated approach, a strategy pioneered by Tesla, allows Xiaomi to maintain agility and accelerate development cycles, significantly reducing the time and expense typically associated with negotiating and managing extensive supplier relationships. Even its electric motors are manufactured internally, providing a distinct edge over Western and other Asian automakers that rely heavily on vast external supplier networks, often compromising speed and control.
While these behind-the-scenes manufacturing and engineering decisions might seem arcane to the end consumer, their impact is profound. Consumers are drawn to the product and the brand. They are receiving a high-quality vehicle from a reputable brand, led by a charismatic figure. This resonates deeply, harkening back to the golden eras of Steve Jobs’ Apple or the nascent days of Tesla, but with the added advantage of a product portfolio that can cater to a significantly broader customer base. It’s difficult to envision companies like Apple or Ford achieving the same level of market penetration with products that command a $65 price tag, as Xiaomi does with its smartphones.
Xiaomi YU7: An Expert’s First Drive and a Glimpse into the Future
My time behind the wheel of the YU7, while limited, was incredibly illuminating. I experienced the vehicle as a passenger for approximately two hours, traversing a variety of road surfaces. My direct driving experience, unfortunately, was restricted to about 45 minutes on a closed circuit within a scenic resort. Nevertheless, this brief but intensive encounter provided ample opportunity to form a comprehensive impression of the YU7’s capabilities. My driving route encompassed slow-speed neighborhood streets and a demanding, winding mountain road that truly tested the vehicle’s dynamic limits.
In a word: exceptional. It is genuinely astonishing to consider that this is only Xiaomi’s second attempt at automotive manufacturing. In stark contrast to many EV startups whose initial offerings often feel like ambitious concept kits or prototypes rather than production-ready vehicles, the YU7 exudes a level of refinement, material quality, and design coherence that belies its relative inexperience in the automotive arena.
The driving dynamics of the Xiaomi YU7 present very few discernible flaws. Like virtually every contemporary electric vehicle, the YU7 possesses blistering acceleration. This is hardly surprising given its formidable 680 horsepower, delivered to the road via Xiaomi’s in-house developed V6s electric motors—a significant power advantage over the standard Tesla Model Y.
However, it is the YU7’s chassis, ride quality, and suspension tuning that truly distinguish this vehicle. These elements work in remarkable synergy, creating what I consider to be the most comprehensively resolved Chinese-manufactured automobile I have ever had the pleasure of experiencing. This assessment is not qualified by a “good for a Chinese car” caveat; rather, it stands as a direct comparison to global benchmarks.
To put it plainly, this vehicle is a genuine Porsche-killer. The claims made by Xiaomi’s representatives regarding the YU7’s development benchmarks—the Porsche Cayenne and Macan (both internal combustion and electric variants), alongside the Tesla Model Y—are demonstrably evident in its performance. The YU7 handles with exceptional sharpness. Engaging corners at speed reveals a remarkable flatness, attributed in part to the active pitch correction system integrated into its air suspension. While the steering is light, even in sport mode, it remains commendably communicative, providing the driver with a clear sense of the road.
The closest driving sensation I can recall in recent memory would be the gasoline-powered Acura Integra A-spec I reviewed in early 2023. I am hard-pressed to identify any electric crossover available in the U.S. market that offers such an engaging and enjoyable driving experience, particularly at an estimated price point of around $47,000. The only minor detraction observed was the limited grip offered by the tester’s low-rolling-resistance tires, an easily rectifiable issue by opting for performance-oriented Michelin Pilot Sports, available with different wheel configurations.
Yet, the YU7’s sophisticated suspension setup demonstrates remarkable versatility. The active pitch control system performs multiple functions, not only mitigating the jarring sensations often associated with regenerative braking but also actively anticipating and compensating for road imperfections, thereby enhancing ride comfort. The YU7 truly excels as a long-distance cruiser. The rear seats, which reportedly offer a more generous recline than those found in a Maybach, allow occupants to relax and luxuriate in the YU7’s remarkably smooth ride. I suspect the current Model Y does not offer a comparable level of ride comfort, though I have yet to experience the updated ‘Juniper’ model.
Relinquishing the YU7’s keys was a genuine disappointment. The vehicle’s sheer driving pleasure left me yearning for more time behind the wheel. If the SU7 sedan offers a comparable driving experience, it becomes abundantly clear why Ford CEO Jim Farley expressed such profound concern upon its introduction.
The YU7’s sophisticated driving dynamics represent only one facet of its appeal. The remainder of the vehicle is equally impressive. Xiaomi has positioned the YU7 as a more premium offering compared to the SU7 sedan, a distinction readily apparent upon direct comparison. While the SU7 is far from being a spartan vehicle, the YU7 exhibits a palpable upgrade in interior luxury and material quality. The cabin is remarkably quiet, thanks to the inclusion of double-laminated glass—a feature once exclusive to high-end luxury vehicles. The YU7 also boasts “zero-gravity” seats for both the driver and front passenger. Every switch and control feels precisely weighted, and not a single trim piece or panel in our test vehicles exhibited any misalignment or imparted a substandard tactile sensation. In contrast, a Tesla Model Y, at a comparable price point, can feel comparatively harsh, less refined, and somewhat rudimentary in its interior appointments.
Furthermore, a Tesla often feels less intuitively designed. The YU7’s software and hardware suites are deeply integrated with its smartphone ecosystem, reflecting a design philosophy more akin to its consumer electronics than traditional automotive interfaces. This extends to a range of optional accessories available through the Xiaomi store. Beyond the innovative physical buttons integrated into the infotainment display, Xiaomi has devised a system for seamlessly incorporating additional accessories. The interior features multiple powered mounting points capable of supporting devices such as GoPro cameras or smartphone holders equipped with integrated wireless chargers.
The vehicle’s software is exceptionally responsive and intuitive. It features a comprehensive suite of popular Chinese entertainment and navigation applications, alongside standout inclusions like integrated Apple Music and, notably, wireless Apple CarPlay—a feature that, surprisingly, is not universally common in Chinese domestic vehicles.
Perhaps the most compelling innovation is the YU7’s sophisticated multitasking capabilities, mirroring the functionality of modern smartphones. Users can simultaneously display Apple Music, Apple CarPlay, or any other application alongside other functions. This allows for a seamless integration, enabling drivers to utilize CarPlay while simultaneously accessing Xiaomi’s proprietary in-car navigation and advanced driver-assistance systems on a split screen. The interface is exceptionally well-executed and easy to navigate, even in its entirely Chinese language configuration. An English translation would undoubtedly elevate its appeal as a killer application for international markets.
Why Tesla Is Facing an Existential Threat in China as a New EV Benchmark Emerges
The compelling attributes of the YU7 may not be confined to the Chinese domestic market. Xiaomi has stated its intention to commence exporting vehicles outside of China starting in 2027, though it has yet to confirm whether the YU7 or the SU7 will be the initial models offered for global sale. Regardless of the specific models, any expansion into Western markets is likely to send ripples of apprehension through the established automotive industry.
While I possessed some awareness of Xiaomi prior to my visit to China, the sheer magnitude of the brand’s importance in the minds of Chinese consumers became profoundly evident. Whether driven by national pride or simply the consistently superior quality of its products, consumers have developed a deep affinity for Xiaomi.
Our convoy of SU7 sedans, distinctive in their grey and green livery, commanded the attention of both passing motorists and pedestrians. The vehicles generated such considerable interest that amateur videos of our convoy departing Beijing quickly proliferated across Chinese social media platforms. This level of public fervor and admiration is more characteristic of a high-profile technology company than a traditional automotive manufacturer. I am unaware of any company, domestic or international, that can rival Xiaomi’s brand recognition and consumer engagement. The disconcerting reality for every other automaker is that Xiaomi possesses the capacity to validate this fervent brand loyalty with a demonstrably superior product. In China, Xiaomi does not need to persuade consumers; their loyalty is already secured. This explains why the vehicle achieved sell-out status within an hour of reservations opening, with production slots extending for years.
Consequently, the YU7 represents an existential threat to virtually every competitor, regardless of their geographic market. How can any brand effectively compete against a company with such immense scale, a pre-existing fanbase of devoted customers, and the agility to rapidly develop and deploy new products? Vehicles like the YU7 will undoubtedly accelerate the consolidation within China’s burgeoning EV sector, as numerous brands vie for an increasingly scarce pool of buyers—specifically, at least 240,000 fewer potential buyers.
This includes, and perhaps especially, Tesla. During my time driving the YU7, I struggled to comprehend why a consumer would opt for any other vehicle in its class, including the Tesla Model Y. This is particularly concerning for Tesla, a brand that, in theory, possessed the greatest potential to stem the tide of declining market share in China. However, this is precisely what is not occurring.
While Tesla’s global sales figures have recently been bolstered by its performance in China, Elon Musk’s increasingly controversial public statements and a somewhat stagnant model lineup, coupled with a perfunctory facelift of its most popular model, have contributed to declining sales worldwide. China has, to some extent, been insulated from Musk’s public relations missteps, but sales of the Model 3 have not fully recovered, especially since the advent of the SU7 in the Chinese market. The Model Y has maintained its position on China’s sales charts through aggressive incentives, such as zero-percent financing and enhanced trade-in valuations—tactics that have artificially propped up demand.
However, it remains uncertain how long this strategy can be sustained. During our recent visits to China, numerous locals expressed the sentiment that the Tesla brand is beginning to feel dated and unremarkable. Now, with the YU7 demonstrably surpassing the Model Y in virtually every conceivable metric, Tesla’s assumption that Chinese consumers will continue to purchase the Model Y at previous rates appears to be profoundly delusional. The primary constraint for Xiaomi is its production capacity; if Xiaomi could manufacture more YU7 and SU7 models, consumer demand would undoubtedly absorb them. The SU7 sedan, for instance, continues to have a year-long waiting list.
Should the YU7 successfully break free from the confines of the Chinese market and achieve global distribution, particularly if it mirrors the Model Y’s competitive pricing outside of China, automakers worldwide should be prepared for a significant disruption. The future of the automotive industry is being rewritten, and Xiaomi is holding the pen.
For those seeking to understand the cutting edge of electric vehicle innovation and to explore vehicles that are redefining performance, luxury, and value, the Xiaomi YU7 represents a compelling next step. We invite you to learn more about its advanced features, compare it with existing market leaders, and discover how you can be a part of this automotive revolution.
