Xiaomi attacks delivery challenges, local competition facing new YU7 electric SUV

Xiaomi Corp. is ramping production of its new YU7 electric SUV after delivering more than 40,000 units in just over two months, highlighting booming demand and underscoring delivery challenges.

CEO Lei Jun said YU7 deliveries began on July 6 and quickly surpassed 40,000, though the figure still falls short of customer expectations. He acknowledged a “large gap” between orders and deliveries and pledged to accelerate output to close it.

The YU7 industry benchmark record on the day of its debut was immediately established, with 289,000 orders locked in within the first hour. Additionally, more than 240,000 firmed-up orders were received within 18 hours. Even though most were deposit-backed reservations, the spike indicates a strong consumer interest in Xiaomi’s new EV.

Xiaomi is pressing factories to do more to meet demand

Xiaomi is working to boost production of the YU7 after a massive influx of orders strained its factories. The SUV has quickly become one of China’s most sought-after new cars, and meeting customer demand is now the company’s biggest challenge.

The company shipped 16,548 YU7s in August, almost triple that of July. This includes sales of its first model, the SU7 sedan, and monthly total deliveries once more, which surpassed 30,000. That performance puts Xiaomi among the fastest-growing EV makers in the country, where veterans like BYD, Nio, and Tesla dominate.

New YU7 buyers still face a long wait, but things look better. The delivery window now stands at 45–48 weeks. As of last month, it came in at 56–59 weeks. According to analysts at Goldman Sachs, Xiaomi is scaling up production. They estimate that the company’s weekly run rate for production could soon hit 10,000 units — an important milestone in competing against larger rivals.

Part of the problem is that the YU7 is such a complex machine. Unlike the SU7 sedan, it took 230 days before rolling off the first batch of 100,000 units. YU7 is a relatively large SUV with more parts demanding longer assembly. Nevertheless, Xiaomi has picked up speed, which indicates the company’s ability to learn rapidly from a grueling first effort.

Industry watchers say that this rapid scale-up will prove critical. China’s EV market is hypercompetitive, with Tesla cutting prices to hold on to share and BYD expanding aggressively at home and abroad. The YU7’s fate beyond headlines could rest on Xiaomi’s ability to keep its production lines humming and delivery systems running without too many delays or disappointed customers.

Behind the scenes, Xiaomi is in close contact with suppliers to lock down steady supplies of batteries, semiconductors, and other key components. It is also investing in automation and more production lines to alleviate bottlenecks.

Xiaomi doubles down on its EV ambitions

Xiaomi is doubling down on electric vehicles to diversify its business and challenge established players in the sector, after being best known for smartphones and consumer gadgets.

In terms of size and price, the YU7 is squarely aimed at Tesla’s Model Y, which gets a similar range from a more expensive base price — around 253,500 yuan ($34,900). Aggressive pricing enabled Xiaomi to capture the imagination of price-conscious Chinese customers. Analysts say the SUV could turn into a hit if production bottlenecks subside.

However, the company is facing glaring challenges. Xiaomi’s fledgling car division is expected to scale up production without sacrificing quality. Supply chains for batteries and chips also feel the pinch of broader industry shortages. Investors are watching closely to see if the company can keep up without costly delays.

For Lei Jun, the goal is clear. He has pledged to ramp up production, reiterating that Xiaomi needs to convert overwhelming demand into reliable, on-time shipments. Whether the YU7 can gain local traction may determine the company’s standing in China’s brutally competitive EV race.

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