June 29, 2025, 5:23:28 PM IST (Published) 4 Min Read Xiaomi Corp.’s shares rose 8% to a record high after the smartphone maker drew strong initial orders for a $35,000 sport utility vehicle intended to compete with Tesla Inc.’s Model Y in China. The company on June 26 took the wraps off the 253,500 yuan ($35,360) YU7, debuting its second car in a crowded EV market while grappling with scrutiny over its assisted-driving technology. Xiaomi drew a better-than-anticipated 289,000 orders in its first hour of availability. Xiaomi founder Lei Jun attacked Tesla head-on during Thursday’s 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 just under the 263,500 yuan for the latest version of the Model Y, China’s most popular SUV. BYD Co's Tang L SUV, slightly smaller than the YU7, sells for between 239,800 yuan and 289,800 yuan. Also read | Mercedes-AMG GT XX concept debuts as brand’s first all-electric performance car “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 Group Inc. analysts including Timothy Zhao wrote. They raised their price target on the stock 6% to HK$69. What Bloomberg Intelligence Says 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% 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. YU7 could contribute 41% of Xiaomi’s EV deliveries in 2H and help beat its EV sales target by 13%. The top model goes for 329,900 yuan ($46,024) and can travel 760 kilometers (470 miles) on a single charge and accelerates to 100 kilometers per hour in 3.23 seconds. They come in 9 colors, all equipped with lidar, which strengthens driver assistance technology, and an 800 volt platform for fast charging. Many feature the touches and amenities now familiar to Chinese drivers, from large touch screens and massage chairs to drawers. The new model will be a key test of demand for Xiaomi cars after a fatal accident involving an SU7 sedan that sparked scrutiny from Chinese authorities and hammered orders. The YU7’s debut coincides with heightened concerns from 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 and pay suppliers in a timely manner to improve the overall cash flow of the entire supply chain. Lei remains confident about the prospects for Xiaomi’s foray into cars, predicting the new model will help the company’s EV unit achieve profitability in the second half — one of the fastest brands to hit that milestone in the automotive sector. Investors have warmed to that vision, sending shares rising. Now worth around $200 billion, it’s bigger than BYD — the EV powerhouse that dominates the Chinese market — and its SU7 is outselling Tesla Model 3 so far this year. Beyond cars, Thursday’s event also showcased a pair of 1,999 yuan black-rimmed AI 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. Continue Reading