Xiaomi CEO Is Asking Customers To Buy Teslas: Here's Why
In a rare move that shook up the global electric vehicle conversation, Lei Jun, CEO of Chinese tech major Xiaomi, openly advised some of his customers to consider buying Teslas instead of waiting for his company’s new electric SUV. The statement came in August 2025 and quickly made headlines, not only because of its candour but also because it revealed the challenges Xiaomi faces in transitioning from electronics to automobiles.
Xiaomi’s second electric vehicle, the YU7 SUV, launched in June 2025 and became an instant sensation. Positioned as a direct rival to the Tesla Model Y, the YU7 pulled in an astonishing 240,000 orders within the first 18 hours. For a company only in its second attempt at building cars, this was a remarkable achievement.
But the overwhelming demand has created a massive delivery backlog. New buyers of the YU7 face waiting times of 56 to 59 weeks, effectively stretching deliveries into late 2026. The long queues have not gone down well with customers, many of whom voiced frustration online. The pressure grew so intense that Lei Jun felt compelled to respond publicly.
Instead of sticking to a typical corporate reassurance about boosting production, Jun admitted the company could not keep up with demand in the short term and suggested those unwilling to wait should consider alternatives, including rivals.
Jun’s public note listed several options for customers seeking immediate availability. He mentioned domestic competitors such as the Xpeng G7 and Li Auto i8, both of which already enjoy a strong position in the Chinese EV market. The real surprise, however, was his endorsement of Tesla’s Model Y.
Jun wrote that the Tesla SUV was an excellent product and pointed out that Tesla had just announced new promotions. It was an unusual gesture for a CEO to direct attention toward the flagship model of his company’s biggest rival. In the ultra-competitive world of electric vehicles, such openness stood out. It showed both confidence in Xiaomi’s own product and recognition of customer needs over brand rivalry.
The YU7’s success can be traced to a combination of pricing, technology, and Xiaomi’s reputation for delivering value in its consumer electronics. The base variant of the SUV is priced at 253,500 yuan (about $35,300), which undercuts many established players in the premium electric SUV space.
Its features back up the hype. The car uses advanced 800-volt charging architecture, allowing the battery to hit 80 percent charge in just 13 minutes. That’s a benchmark most rivals cannot match. With a driving range of 835 kilometres on a single charge, the YU7 reduces the range anxiety that still haunts potential EV buyers. Performance is another draw: the entry-level variant packs 315 horsepower, while the top-spec Max pushes 681 horsepower with a 101.7 kWh battery pack.
The Pro and Max trims add dual-motor setups, all-wheel drive, and rapid acceleration, yet Xiaomi has kept pricing competitive. The Max, even with its high output, comes in at around $46,000, positioning it as a bargain compared to similar premium SUVs.
Despite its product strengths, Xiaomi’s struggles underline the complexity of car manufacturing. Unlike smartphones, where the company built its name on rapid scaling, car production demands vast supply chains, capital-intensive factories, and rigorous quality control. These cannot be scaled at the same pace as consumer gadgets.
The waiting list has already led to unusual secondary market behaviour, with buyers attempting to sell their booking slots at a premium. Xiaomi had to limit purchases to two vehicles per customer to curb such speculation.
For now, the company remains focused on the domestic market, but global expansion is on the horizon. When Xiaomi does enter international markets, it will face not only Tesla but also legacy automakers and regional players with established dealer networks. Its ability to maintain its value-driven positioning while ramping up production capacity will decide whether it can replicate its success outside China.