Xiaomi draws 289,000 orders in first hour of its electric SUV launch

BEIJING – Xiaomi drew strong initial orders for its first electric sport utility vehicle (SUV) intended to compete with Tesla’s Model Y in China, sending its shares soaring 8 per cent to an all-time high on June 27.

The company a day earlier took the wraps off the 253,500 yuan (S$45,000) YU7, debuting its second car in a crowded electric vehicle (EV) market while grappling with scrutiny over its assisted-driving technology.

Xiaomi drew 289,000 orders – better than anticipated – in its first hour of availability.

“Consumer demand for Xiaomi’s YU7 far exceeds our and market expectations, which should enable Xiaomi to continue consolidating its leadership position in the premium auto market in China,” Goldman Sachs analysts wrote. They raised their price target on the stock by 6 per cent to HK$69. 

Xiaomi began taking pre-orders on June 26, with a 5,000 yuan deposit. In a surprise twist, founder Lei Jun declared that buyers of Xiaomi’s first car – the SU7 sedan – would have three days to switch to the SUV if they had not taken delivery of the original vehicle. Xiaomi announced shortly after the event that it had processed more than 200,000 pre-orders for the YU7 within three minutes.

Bloomberg Intelligence analysts Steven Tseng and Sean Chen said: “Xiaomi’s launch of the YU7 SUV, and the option to switch existing SU7 sedan orders to YU7, could boost its EV sales growth to 209 per cent in 2025. SUVs are more popular than sedans in China, and the new model complements Xiaomi’s product line to widen its customer reach, potentially winning orders from Tesla and Nio.”

The top model goes for 329,900 yuan, and can travel about 756km on a single charge and accelerate to 100kmh in 3.23 seconds. The SUVs come in nine colours, all equipped with a light detection and ranging system, which strengthens driver-assistance technology, and an 800-volt platform for fast charging. Many feature touches and amenities now familiar to Chinese drivers, from large touchscreens to massage chairs to drawers.

“We’re going to face the biggest competitor, and also face fierce challenges from all the other manufacturers,” Mr Lei said at a launch event in Beijing.

Mr Lei, who shot to fame with bold plans to unseat Apple in China, is counting on EVs to take on billionaire Elon Musk’s Tesla and fuel the final chapter of his entrepreneurial career. He has pushed Xiaomi into new arenas, from chip design to artificial intelligence (AI) glasses, pledging to spend 200 billion yuan over five years to try and turn the Chinese company into a global device leader.

Mr Lei attacked Tesla head-on during the June 26 launch event, stacking his vehicle against the Model Y, much as he compares Mi devices with the iPhone. The YU7’s price tag – largely in line with analysts’ expectations – comes in at just under the 263,500 yuan for the latest version of the Model Y, China’s most popular SUV. BYD’s Tang L SUV, slightly smaller than the YU7, sells for between 239,800 yuan and 289,800 yuan.

The YU7’s debut coincides with heightened concerns from the Chinese authorities about an extended price war. BYD, Xiaomi and more than a dozen other automakers were warned to self-regulate and prevent the use of “zero-mileage” used cars to inflate sales numbers, as well as pay suppliers in a timely manner to improve the overall cash flow of the entire supply chain.

Mr Lei remains confident about the prospects for Xiaomi’s foray into cars, predicting that the new model will help the company’s EV unit achieve profitability in the second half – potentially one of the fastest brands to hit that milestone in the automotive sector.

Investors have warmed to that vision, sending shares north. Now worth around US$200 billion (S$255 billion), it is bigger than BYD – the EV powerhouse that dominates the Chinese market – and its SU7 is outselling Tesla’s Model 3 so far in 2025.

Beyond cars, the June 26 event also showcased a pair of 1,999 yuan black-rimmed artificial intelligence glasses that can film video and answer questions off visual cues; the MIX Flip 2, Xiaomi’s new folding phone; and a tablet that uses its in-house Xring O1 chip. BLOOMBERG