Billionaire founder Lei Jun unveiled the YU7, a sport utility vehicle similar to Tesla’s Model Y, in a Weibo post. The 5m long car is a pure electric SUV, fitted with a nickel-cobalt-manganese battery to be made by Contemporary Amperex Technology Co Ltd.
The motor will have a peak power of 220kW or 288kW, according to a separate notice from China’s ministry of industry and information technology.
Xiaomi’s shares rose as much as 3.9% in Hong Kong before paring gains. The stock had surged more than 90% since Xiaomi’s maiden vehicle — the SU7 sedan — went on sale in March.
An SUV would mark a big expansion of Xiaomi’s US$10 billion EV endeavour, spearheaded personally by Lei. The company is trying to reduce its reliance on a volatile smartphone market dominated globally by Apple Inc, though with EVs it’s getting into a crowded arena and taking on established rivals Tesla and BYD.
Apple Inc nixed its own long-incubating EV project after failing to overcome challenges in adapting its expertise to a new field of manufacturing.
But Xiaomi, known for making everything from smartphones to rice cookers and luggage, is prioritising growth of the EV business over margins for now, chief financial officer Alain Lam told Bloomberg Television in August.
Xiaomi is preparing a second model just months after entering the market with the SU7. It aims to deliver 130,000 units of the sedan this year, up from a previous target of 120,000. The Beijing-based company has already bought land near its existing EV plant, intending to expand production following the early success of its maiden vehicle.
It’s unclear what specifications and pricing Xiaomi envisions for the SUV — a type of larger vehicle gaining in popularity across China.
Discussions about an SUV began as far back as when Lei announced in 2021 that EVs represented his final major entrepreneurial effort. But the company eventually decided to move first on the SU7, a US$30,000-plus sedan with a design aesthetic similar to Tesla’s Model 3.
Citigroup analysts including Kyna Wong held out the possibility that Xiaomi might exceed 2025 shipment estimates on the strength of the new model.
“We see upside to our estimates of 273k for 2025 shipment, which depends on how soon phase 2 production facilities could come online,” according to the Citigroup report.