Xiaomi will challenge Tesla with Model Y rival set for 2025 debut

Tech giant Xiaomi isn't just about smartphones anymore – it's charging full speed ahead into the electric vehicle market with a new SUV designed to compete directly with Tesla Model Y.

Whispers from within the company reveal that Xiaomi has been diligently benchmarking its upcoming SUV against Tesla's popular model. This isn't just a passing fancy; the SUV has been in development since Xiaomi CEO Lei Jun announced his EV ambitions back in 2021.

Initially, the plan was to focus on the production of the SU7 sedan, to reach 100,000 units this year. With the SU7 already in production, Xiaomi has shifted gears, aiming to launch the SUV in late 2025 or early 2026. This timeline aligns with the completion of the second phase of Xiaomi's new assembly plant in Beijing.

For now, details of the future SUV are scarce, but industry insiders hint at a vehicle designed to capture the mainstream market. It's rumored to build on Xiaomi's first EV, the SU7 sedan, fixing any issues the first-gen model has.

Price is a significant factor in the highly competitive EV market, and Xiaomi has its sights set on affordability. While the SU7 sedan starts at RMB 215,900 (just under $30,000), the upcoming SUV is rumored to have a more budget-friendly price tag, potentially targeting RMB 150,000 (around $20,600). If true, this could appeal to a broader range of consumers and shake up the Chinese EV landscape.

With an annual production capacity of 300,000 vehicles in the pipeline at its Beijing plant, Xiaomi is poised to become a significant player in the rapidly growing electric car market.

Via