Dhamaal Response to Xiaomi's New EV Launch
Xiaomi, a China's favorite electronics brand, recently launched its new electric car, YU7. In just one hour, the car received 2.89 lakh orders, indicating huge consumer interest. Riding on the demand, Xiaomi share price increased by 8%. It is reportedly going to seriously compete with Tesla, which already faces growing competition in China.
Xiaomi's Foray into EV Segment
Xiaomi entered the electric vehicle sector in March 2024 with its first car, the SU7. The Chinese company has now introduced its second model, the YU7. The price of YU7 is 253,500 yuan (around $35,000 USD) and comes in three variants. The lowest price is 4% less than the Tesla Model Y, which makes it a competitive option.
Battery and Range Comparison
The top variant of the Xiaomi YU7 comes with a 96.3 kWh battery pack, and a maximum driving range of 835 kilometers when the vehicle is charged to the brim. The Tesla Model Y comes with a 78.4 kWh battery pack and has a driving range of 719 kilometers. Therefore, the YU7 is better in battery capacity and driving distance.
Impact on Tesla in China
China is also Tesla's largest market. In the first quarter of 2025, about 20% of Tesla's revenues came from China. Nevertheless, Tesla's share in China's EV market reduced from 15% in 2020 to 10% in 2024. Competition from local players has gone up persistently. To remain competitive, Tesla has had to cut prices again and again.
Market Experts Expect Tesla to Respond
Experts forecast that Tesla would have to slash prices once more following Xiaomi's YU7 release. Experts also advise that Tesla should make its Full Self-Driving software free of charge and offer more favorable financing schemes to entice buyers.
Tags Cloud
