Xiaomi plans to consider selling its EV outside China starting in 2027, CEO Lei Jun said during a livestream on July 2.

The company will prioritize domestic demand first, focusing on its SU7 sedan and newly launched YU7 SUV.

The SU7 has outsold Tesla’s Model 3 in monthly sales since December.

The YU7 SUV received substantial orders within its first 18 hours on sale last week.

Xiaomi has warned buyers that YU7 waiting times may exceed one year, leading to complaints.

Lei said the company is working to boost production capacity but gave no specific details.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ Chinese EV expansion reflects calculated global market entry strategy

Xiaomi’s decision to delay international sales until 2027 follows a historical pattern among Chinese EV manufacturers who first establish domestic dominance before expanding globally.

This mirrors earlier strategies from companies like GAC Motor and NIO, who in 2019 announced plans to enter the US market only after securing their position in China’s highly competitive landscape1.

The company’s approach demonstrates the maturation of Chinese tech firms’ global strategy: build scale domestically, perfect the product, then expand internationally once production capacity and profitability are established.

Xiaomi’s production capacity at its Beijing factory currently stands at 150,000 units annually for Phase 1, with Phase 2 expected to double that capacity. These numbers need significant scaling before supporting global ambitions2.

This cautious approach reflects the lessons learned from previous Chinese companies that attempted premature international expansion without sufficient domestic foundation.

2️⃣ Production capacity emerges as critical bottleneck in EV competition

Despite receiving over 240,000 orders within 18 hours of the YU7’s launch, Xiaomi’s delivery timelines stretching to 60 weeks highlight the production challenges facing new EV manufacturers3.

The company is rapidly scaling production, having increased monthly output from just 4,000 units in March 2024 to 28,000 in May 2025, but still faces significant capacity constraints relative to demand3.

This production bottleneck mirrors Tesla’s own early challenges, where the company struggled with what Elon Musk famously called “production hell” during the Model 3 ramp-up.

The manufacturing constraints create a delicate balance for Xiaomi between maintaining quality, which is crucial for brand perception, and increasing production speed to satisfy customer expectations and prevent order cancellations.

The situation shows how manufacturing expertise has become as important as technological innovation in determining success in the EV market.

3️⃣ Direct-to-consumer pricing strategy reshapes competitive dynamics

Xiaomi’s aggressive pricing of the YU7 at approximately $35,300, about $1,460 less than Tesla’s Model Y, demonstrates how Chinese manufacturers are leveraging cost advantages to challenge established players4.

The strategy has already proven effective with Xiaomi’s SU7 sedan, which has outsold Tesla’s Model 3 on a monthly basis since December 2024, signaling a significant shift in consumer preferences5.

This competitive pricing approach is being replicated across the Chinese EV market, with companies like BYD offering models such as the Song Plus at around $21,000, substantially undercutting international rivals6.

The price competition has intensified as the Chinese government plans to phase out EV purchase tax breaks, pushing manufacturers to absorb costs rather than pass them to consumers in an increasingly crowded market6.

Xiaomi’s ability to maintain this pricing advantage while expanding internationally will be crucial to its global ambitions, as it attempts to replicate its domestic success in markets where established players have deeper roots.

Recent Xiaomi developments

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