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Xiaomi to take on Tesla's best-selling EV with YU7 SUV
The Xiaomi YU7 will debut on Thursday

Xiaomi to take on Tesla's best-selling EV with YU7 SUV

May 19, 2025
04:26 pm

What's the story

Xiaomi is all set to unveil its highly-anticipated YU7 electric sports utility vehicle (SUV) on Thursday. The event will also see the launch of other products such as the XRING O1 mobile chip and the new Xiaomi 15S Pro smartphone. The YU7 has been tipped to be a potential rival to Tesla's best-selling Model Y in China, the world's largest auto market.

EV journey

Xiaomi's foray into electric vehicles

Xiaomi's foray into the EV space started last year with the launch of the SU7 sedan. It was a major shift for a company that had been focusing on smartphones, household appliances, and smart gadgets for 15 years. Since its December release, the SU7 has continued to outsell Tesla's Model 3 on a monthly basis, even after a dip in orders after an SU7 accident in March.

Chip investment

Xiaomi's commitment to chip development

Xiaomi's founder and CEO, Lei Jun, recently took to Weibo to announce that the company has invested 13.5 billion yuan ($1.87 billion) in developing its advanced mobile chip XRING O1. He also revealed plans for an additional investment of at least 50 billion yuan in chip design over the next decade. A Xiaomi representative confirmed to Reuters that this investment timeline starts in 2025.

Chip evolution

Xiaomi's chip development journey

Xiaomi started designing chips in 2014 and released its first mobile processor, the 28-nm Pengpai S1, in 2017. It debuted in the Xiaomi 5C smartphone. However, owing to "various setbacks," Lei said the company focused on less complex chips such as battery management and image chips. In 2021, along with its decision to manufacture cars, it also resolved to resume mobile phone chip development.