Xiaomi SUV Sets Its Sights On Tesla Model Y

The Chinese automaker is coming after Tesla with a new electric SUV.

Xiaomi

Key Takeaways

Xiaomi saw high demand for its SU7 sedan due to low pricing, with over 100,000 orders received.
It’s moving forward with plans for an SUV to compete against Tesla Model Y, aiming for repeat success.
Affordable pricing remains crucial in selling EVs globally as the EV market cools.

Chinese automaker Xiaomi took its first orders for the SU7 sedan in April and those intial orders were far higher than expected. The company sold nearly 5 times as many units as predicted, which has led to long waits for some customers. Deliveries have started, however, and Xiaomi is moving on to the next big thing – an SUV to go up against the Tesla Model Y, according to Bloomberg.

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There are currently over 100,000 orders for the SU7 sedan, in large part due to its low pricing with the company losing money on every unit it sells. Stiff competition in China makes pricing a key selling feature and leaves plenty of room for Xiaomi to repeat its success with an SUV.

Low Pricing, High Sales

It’s a struggle for EV startups to balance price with demand. Early adopters who were willing to pay a premium to get the latest and greatest electric vehicle have already made their purchases. Not everyone who wants and EV can afford a Tesla Model Y or the Lucid Air, no matter how beautiful the car.

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CEO Peter Rawlinson says the new crossover will have an approximate starting price of $48,000 and be hugely efficient.

There are more affordable options out there, like the Hyundai Ioniq 5 or the Kia EV9, but they aren’t exactly cheap for those on a tight budget. It doesn’t matter where in the world you are, pricing is an issue when it comes to selling EVs.

Cheapest Car Wins?

Xiaomi is benchmarking its upcoming SUV against the Model Y. This unnamed SUV was at one time supposed to be its first vehicle. It shifted to the SU7 sedan, but an SUV was always part of the plan. Production all depends on completion of its EV facility in Beijing.

Here in the US, we don’t have access to the cheap EVs on the market in China. If those vehicles do make their way to our shores, they would provide significant competition for US automakers. It’s enough of a concern that President Biden is planning to raise tariffs on Chinese EVs and effectively double their prices in the US should they make their way across the border.