Chinese technology giant Xiaomi Corp. has unveiled a high-performance version of its popular YU7 electric SUV, marking a major step in the company’s effort to expand its automotive business as rising chip costs continue to pressure its core smartphone division.
The new YU7 GT delivers up to 1,000 horsepower and offers a driving range of 705 kilometres on a full charge. It is priced from 389,900 yuan (about US$57,310), Chief Executive Officer Lei Jun said during a launch event in Beijing on Thursday.
By comparison, Porsche’s Cayenne Turbo Electric, a similarly sized high-performance SUV, starts at around 1.12 million yuan in China. The YU7 GT is also about 140,000 yuan cheaper than Xiaomi’s SU7 Ultra, the performance version of its first electric sedan.
Lei said the model has already demonstrated strong performance in testing, setting a new SUV record at Germany’s Nürburgring circuit after being modified for track conditions.
“Our ambition is a pure machine with the performance and appearance of a race car,” Lei said. “But at the same time, it is luxurious, offers strong range, and can take families on long-distance travel.”
The YU7 GT represents Xiaomi’s second attempt at launching a sport-focused variant of its vehicles, with the company hoping for stronger market reception than its SU7 Ultra model.
Sales of Xiaomi’s high-performance electric vehicles have weakened in recent months following lawsuits from customers over alleged exaggerated marketing claims. Only 80 units of the SU7 Ultra were sold in March, down sharply from more than 3,100 units in the same period a year earlier.
At the same event, Lei also introduced a new entry-level version of the YU7, priced from 233,500 yuan, around 20,000 yuan lower than the previous base model. The move signals that price competition in China’s electric vehicle market remains intense.
Lei said the price adjustments are aimed at strengthening competitiveness against Tesla Inc.’s Model Y, as Xiaomi seeks to capture a larger share of China’s best-selling SUV segment.
The company’s aggressive expansion into electric vehicles comes as its core smartphone business faces growing challenges from global chip supply constraints and rising costs.
Major suppliers such as Samsung Electronics Co. have prioritised advanced memory chips used in artificial intelligence data centres, creating shortages of conventional memory products and driving up costs across the industry.
As a result, Xiaomi’s global smartphone shipments fell nearly 20% in the first quarter, compared with a 2.9% decline in the overall market, according to IDC data. The company has strategically reduced low-end device volumes due to shrinking margins caused by higher input costs.
However, China’s EV market is also facing headwinds, including weaker sales following reductions in government subsidies. While exports remain a bright spot for the sector, Xiaomi is not expected to begin overseas EV sales until 2027, potentially missing out on international demand driven by rising fuel prices.
Despite these challenges, Xiaomi continues to position its automotive division as a long-term growth engine alongside its consumer electronics business, betting that its software expertise and ecosystem integration can help it compete in China’s increasingly crowded EV landscape.
