rewrite this title Xiaomi takes aim at Tesla’s bestselling car in China with its longer-range YU7

BEIJING — China’s Xiaomi, known for its smartphones, only recently entered the electric-vehicle space. It is now taking aim at Tesla’s bestselling car in China.

Less than a year after launching its first electric car, Xiaomi late on Thursday revealed its YU7 SUV and claimed it would have a driving range of at least 760 kilometers (472 miles) on a single charge.

That’s well above the 719 km advertised for Tesla’s extended-range Model Y. Driving range has been a selling point for consumers worried about frequent battery charging.

“We expect Yu7 would significantly erode Tesla Model-Y’s China market share,” Citi analyst Jeff Chung said in a report Sunday.

Citi expects the YU7 to be priced around 250,000 yuan to 320,000 yuan ($34,700 to $44,420), and forecasts monthly sales of about 30,000 units. Once sales pick up, Citi predicts annual sales of 300,000 to 360,000 units.

That price range pits the YU7 against Tesla’s Model Y, which starts at 263,500 yuan in China. Xiaomi plans to announce the YU7’s price at the car’s official launch in July.

Xiaomi plans to announce the YU7’s price at the car’s official launch in July.

Tesla’s Model Y was the second most sold new energy vehicle in China in the six months through April, according to Autohome, an online platform for consumer information on cars in China. BYD’s far cheaper Seagull ranked first, while the budget Wuling Hongguang Mini ranked third.

For April alone, Geely’s Geome Xingyuan topped the new energy vehicle bestsellers’ list, followed by BYD’s Seagull and the Wuling Hongguan Mini, Autohome data showed. Xiaomi’s SU7 sedan ranked fourth, followed by three BYD models, while Tesla’s Model Y ranked eighth.

The YU7 is positioned as a “luxury SUV” and its sales could outperform that of the SU7, Elinor Leung, managing director of Asia telecom and internet research at CLSA, said in a note.

Last year, Xiaomi released its first electric car, the SU7 sedan, priced $4,000 lower than Tesla’s Model 3 at the time. Tesla subsequently reduced Model 3 price to 235,500 yuan as of May 26 — although it is still more expensive than the SU7 sedan at 215,900 yuan.

Xiaomi delivered more than 28,000 units of its SU7 car in April, down from its record of more than 29,000 during the previous month. That comes after the crash of an SU7 vehicle in China that left three people dead. China has since mandated automakers to be careful with the language when advertising driver-assist systems.

Xiaomi revealed the YU7 on Thursday at the end of a launch event for a premium phone using a new chip that the company claimed beat Apple’s on certain metrics. CNBC was not able to independently verify the claims.

Rival electric car company Xpeng is due Wednesday to release the Max version of its relatively popular Mona M03 car. The Max version includes more advanced driver-assist capabilities. The company previously said the Max would begin deliveries after the Lunar New Year holiday in February.