Xiaomi doesn’t slow down: new SUV to debut by the year-end, to take on Model Y

Xiaomi will unveil a new SUV in the last quarter of the year. According to sources, Xiaomi’s second car will be a mid-to-large SUV with an all-electric powertrain and an electric range extended vehicle (EREV) option, a concept popularized by Li Auto.

Xiaomi launched its first car – an electric sedan SU7 – on March 28 in China for 215,900 yuan (29,900 USD), undercutting the price of the Tesla Model 3 by 30,000 yuan (4,100 USD). The base model of Model 3 has a range of 606 km under CLTC conditions and is equipped with a 60 kWh battery from CATL. The base model of Xiaomi SU7 has a 700 km CLTC range with a 73.6 kWh LFP blade battery from BYD. More comparisons can be found here. The SU7 got 50,000 firm orders in 27 minutes following launch.

MyDrivers reported that Xiaomi has two platforms: Modena, which we already know, and the yet-to-be-released platform supporting EREV. The new Xiaomi SUV will compete with Porsche Cayenne, its benchmark, but mainly with Li Auto, the current sales king among large luxurious SUVs in China.

Li Auto has been selling only SUVs, all of which are EREVs. This strategy worked as Li Auto grew in 2023 to nearly 400,000 sold cars in China and planned to double it in 2024 to 800,000 units. EREV means the EV is equipped with a small ICE engine not connected to the wheels but can charge the battery or support an electric motor.

However, on March 1, Li Auto launched its first all-electric car and first non-SUV. It was a Li Mega MPV (multi-purpose vehicle) with a futuristic design and lots of marketing noise. However, the market acceptance wasn’t so exciting, and early order book and sales reports were disappointing. As a result, Li Auto lowered its 2024 sales target to 560,000 – 640,000 units.

The report argues that Xiaomi learned from Li Auto Mega’s underwhelming market performance and will offer an EREV version of its SUV. Looking at the competitors, it is quite common for luxurious SUVs to have an EREV powertrain in China – for example, YangWang U8 or Fang Cheng Bao Bao 5, Li 9, or Aito M9, which received over 60,000 firm orders since its launch three months ago.

The report also discusses if it was the right decision to launch the first car with a sedan body type. The 200-300k yuan sedan segment is overcrowded in China, with dozens of competitors offering good quality products, while SUV popularity is rising in China. Looking at Tesla, the majority of their sales in China are done by Model Y SUVs as Model 3 sales plummet under the pressure of competition from BYD Seal, BYD Han, Zeekr 001, Zeekr 007, Nio ET5, Xpeng P7, and others.