Xiaomi Auto Faced Internal Strategy Clash, Ultimately Chose to Take on Tesla and BBA Head-On

Pan Jiutang, Partner at Xiaomi’s Industrial Investment Division, recently revealed that when Xiaomi initially launched its automotive project, there was intense internal debate over its strategic direction. One faction advocated entering the market with a mid-to-large-size SUV, pursuing a Toyota-style cost-effective and practical approach to avoid direct competition with premium brands. The other faction argued that since Xiaomi had entered the market relatively late, it should instead concentrate its resources on tackling the most challenging segment. Ultimately, Xiaomi opted to “take on TBBA head-on”—referring to Tesla, Benz, BMW, and Audi—and launched the SU7 series, positioned as a C-segment high-performance smart electric sedan. Since deliveries began in April 2024, Xiaomi Auto has sold over 600,000 vehicles. Its first SUV, the YU7, went on sale in June 2025 with a starting price of RMB 253,500. The next-generation SU7 is expected to debut this April.