Xiaomi's new Sky Nomad marks entry into extended-range SUVs
What's the story
Chinese tech giant Xiaomi has launched a new series of extended-range electric vehicles (EREVs) called the Sky Nomad. The extended-range electric vehicle (EREV) series, known as Xiaomi Pengcheng in Chinese, will include "smart, versatile, spacious" SUVs. The move marks a major expansion for the company beyond battery-powered sedans and crossovers into a segment popularized by automakers like Li Auto.
Business expansion
Response to slowing growth in core smartphone market
Xiaomi's foray into the automotive industry comes as a response to slowing growth in its core smartphone and home appliance markets. The company's SU7 sedan and YU7 crossover have already become major revenue contributors over the past two years. However, it's worth noting that this new venture is still costly due to heavy investments and narrower profit margins associated with auto manufacturing.
Market competition
Competing with Tesla's Model 3 and Model Y
Xiaomi is positioning its cars as a high-tech Chinese alternative to Tesla models. The company's SU7 and YU7 lines directly compete with Tesla's Model 3 and Model Y. As of June-end, Xiaomi had delivered over 258,000 units of the YU7 crossover in China since its June 2025 launch. However, this number still falls short of the nearly half a million Model Y vehicles sold in the same period.
Expansion strategy
Plans to launch vehicles in Europe next year
Despite having locked-in orders for existing models, Xiaomi is facing a slowing domestic market and hasn't exported its vehicles yet. However, the company has plans to launch vehicles in Europe next year. "They (car owners) want their car to be a second home. For them, a car is not merely a means of transport but another moving space," said Lei Jun, CEO of Xiaomi.