Xiaomi‘s co-founder and CEO Lei Jun has ruled out entering China’s sub-100,000 yuan ($14,700) vehicle segment, saying the company’s ambitions lie firmly at the premium end of the market.
Speaking on a livestream this Friday, Lei Jun said that the tech giant’s EV unit will likely stay out of the budget segment for at least five years, and possibly as long as a decade.
“For cars priced under 100,000 yuan, I think we probably won’t have plans to enter that segment within the next five years — maybe even ten years,” he said.
The comments reflect a strategy Xiaomi has pursued since announcing its automotive ambitions — positioning itself alongside Porsche and Tesla in the premium segment, rather than competing on price with volume-driven domestic brands.
“When Xiaomi decided to build cars five years ago, we had an ambition: we wanted to become one of the top five automakers globally, to build cars comparable to Porsche and Tesla, and to help push China’s auto industry forward — toward the high-end,” Lei said.
Tesla Rival
That ambition is already producing results against the very benchmarks Lei cited.
The SU7 sedan, Xiaomi‘s debut model, outsold Tesla’s Model 3 in China in 2025 — the first time any vehicle had dethroned the American sedan in the premium electric segment since Tesla began local production in 2019.
Xiaomi delivered 258,164 units of the SU7, nearly 30% more than the Model 3’s 200,361 deliveries, according to data from China’s Passenger Car Association (CPCA).
The SU7 has also retained the highest resale value among sedans in the segment at 86.1%, above the Model 3’s 75.3%.
Xiaomi‘s second model, the YU7 SUV, was designed as a direct competitor to Tesla‘s Model Y.
It launched in June 2025 starting at 253,500 yuan (around $37,000) — 10,000 yuan below the refreshed Model Y — and broke all previous records for a car launch in China, registering over 289,000 firm orders within one hour of going on sale.
The model achieved over 150,000 deliveries in its first six months.
Contrast to BYD
One of China’s largest automakers is BYD, which currently produces both plug-in hybrid and fully electric models.
BYD‘s lineup starts as low as 56,800 yuan ($8,300) for the Seagull hatchback and extends to over 1.6 million yuan ($234,500) for the Yangwang U9 supercar — one of the widest price spreads in the industry.
BYD does not break down its automotive revenue by individual brand, making it difficult to determine the true average selling price (ASP) across its main BYD-branded lineup versus its premium sub-brands Denza, Yangwang, and Fang Cheng Bao.
The three brands combined accounted for less than 10% of BYD‘s total sales volume in 2025.
Analysts estimate the Chinese giant’s overall average selling price per vehicle dropped to approximately 119,200 yuan ($17,500) last year.
According to a Gasgoo report in late March, Xiaomi‘s models have granted it an ASP above 260,000 yuan ($38,100) in 2025.
Lei’s comments suggest he sees no competitive advantage in chasing that end of the market.
The Chief Executive was, however, diplomatic about the budget segment he is choosing to avoid, praising the domestic manufacturers already competing there.
“As for the sub-100,000 yuan segment, there are already many domestic manufacturers doing an excellent job,” he said. “I’d recommend people consider cars from those companies.”
The Cost of ‘Smart’
Lei pointed to the cost of delivering genuinely smart vehicles as a key constraint.
Hardware alone for intelligent cockpit and driver-assistance systems runs above 20,000 yuan (nearly $3,000) per vehicle, he said, before accounting for the additional sensors, connectivity, and AI features Xiaomi bundles into its cars.
“Smart capabilities are extremely expensive,” Lei said. “Just the hardware for the smart cockpit and driver assistance systems already costs more than 20,000 yuan.”
He added that Xiaomi‘s vehicles include multiple microphones, Wi-Fi, NFC, external voice interaction through its Xiao Ai assistant, and a broad sensor suite — features that would be difficult to sustain at lower price points.
“For Xiaomi Auto, the priority is to push the upper limit of smart technology—to truly do it well,” Lei said. “Only then can we help drive the overall progress of China’s automotive industry.”
Lineup
Xiaomi‘s existing product range underscores the strategy.
The original SU7 sedan launched in March 2024 with prices ranging from 215,900 to 299,900 yuan ($31,600—44,000) across its Standard, Pro, and Max trims.
The SU7 Ultra, a 1,526-horsepower performance variant that set the four-door lap record at the Nürburgring, launched in February 2025 at 529,900 yuan ($77,700) — pushing into supercar territory.
At the time, Lei Jun himself compared its pricing favorably to the Porsche Taycan Turbo GT, which starts at nearly 2 million yuan ($293,200) in China.
The second-generation SU7, which launched in March 2026, brought prices to a range of 219,900 to 303,900 yuan — around $32,200 and $44,600.
Even the base model now comes standard with LiDAR, a 4D millimeter-wave radar, and an Nvidia Thor chip delivering 700 TOPS of computing power — hardware that most competitors reserve for top-tier trims.
The refreshed sedan sold 15,000 units in its first 34 minutes on sale, and locked orders surpassed 40,000 within weeks.
The company plans to launch four to six new vehicles this year, with prices expected to range from roughly 200,000 to 550,000 yuan ($29,300—80,600) — including extended-range SUVs and an executive version of the SU7.
Scaling
The strategy is backed by aggressive growth targets.
Xiaomi set a delivery target of 550,000 vehicles for 2026, after delivering 410,000 units in 2025 across just two models.
If the company meets its 2026 target, it is widely seen as being on track to become one of the fastest automakers to surpass one million cumulative deliveries.
The company delivered more than 79,000 vehicles in the first quarter as it began rolling out the second-generation SU7.
Beyond product, Xiaomi has been reinforcing its premium positioning through brand partnerships.
The company recently sponsored a Maison Margiela fashion show as part of a deliberate effort to court high-end buyers.
On the design front, its Vision GT concept was spotted in Spain ahead of its MWC 2026 unveiling—a collaboration with the Gran Turismo racing game franchise and the first from a Chinese automaker.
Earlier this week, Spanish Prime Minister Pedro Sánchez visited Xiaomi during an official visit to China.
The Prime Minister shared on X that he has visited “together with Lei Jun an exhibition of the most innovative products from their brand.”
“I conveyed to him that Spain offers a competitive industrial and logistical ecosystem for high-level technology cooperation projects between Chinese and Spanish companies,” the Government chief noted, adding that Spain has “talent, reliability, and future opportunities.”
Xiaomi — which already has an established presence in Europe through its smartphones and home appliances — is planning to expand its electric vehicle (EV) business to the continent by 2027.
The company has already set up an R&D center in Germany, with employees including industry veterans from established German automakers.
At the group level, Xiaomi announced plans to invest over €24 billion in research and development over the next five years to accelerate its “Human x Car x Home” ecosystem strategy, with the automotive business as a central pillar.
