Xiaomi CEO Lei Jun had a straightforward reason for why the YU7 wasnt outselling the Tesla Model Y in China: the base model wasnt cheap enough.

At just 10,000 yuan ($1,450) less than Teslas Model Y, the price gap simply wasnt compelling enough. On the evening of May 21, at Xiaomis Human x Car x Home launch event, Lei did something about it (via CarNewsChina).

　　Introducing the Xiaomi YU7 Standard Edition

The new True Standard Edition is priced at 233,500 yuan, about $34,300, which makes it 30,000 yuan ($4,350) cheaper than the standard rear-wheel-drive Model Y.

Recommended Videos While that price gap should be enough, the more interesting number is the range figure. The YU7 lasts up to 399 miles on a single charge, compared to 368 miles for the equivalent Model Y variant.

To put it simply, Xiaomi is offering more range for substantially less money, which, in Chinas super-competitive EV market, is as direct a challenge as a company can issue.

Destroy Tesla is what the internet loves to demand from Xiaomi. At the event, Lei Jun pulled out the YU7s sales numbers from launch up to April. As he put it, taking on the Model Y and walking away with a two wins, eight losses outcome is honestly impressive for a brand new pic.twitter.com/yGThJ8OyAg

ChinaEV Home (@CNEVhome) May 21, 2026

　　What changed under the hood?

The YU7 True Standard Edition sports a rear-wheel-drive single-motor setup that produces 235kW, with a CATL-supplied lithium iron phosphate battery.

As for why Xiaomi is doing this right now, the company wants to regain lost sales momentum. The YU7 arrived on June 18, 2025 at prices below $48,500 and secured over 200,000 orders within three minutes, creating a waitlist that stretched nearly a year.

That backlog has since cleared, and with it, the sales momentum. The company sold fewer than 10,000 units last month, a significant drop from the launch frenzy, and, as a result, the company has launched the new Standard Edition.