Xiaomi's Electric Vehicle Ambition Faces a Critical Test

Xiaomi's new SU7 EV sees strong early orders, but declining demand for its older YU7 model forces an aggressive multi-vehicle strategy to hit 2026 delivery targets.

As the technology conglomerate marks its founding anniversary, it is showcasing robust early sales for its latest electric vehicle, the SU7. However, a closer examination of the automotive division reveals a company walking a tightrope. The relentless expansion of its global ecosystem, now encompassing over 1.03 billion connected AIoT devices, contrasts with emerging challenges in its nascent car business. A declining order book for an older model is prompting an aggressive multi-model strategy to defend ambitious annual delivery targets.

Core Business Provides a Robust Backdrop

Beyond the automotive segment, Xiaomi continues to demonstrate operational strength. Its Smart Home division, with that vast network of connected devices, provides a substantial foundation. The smartphone pipeline also remains active, with industry observers anticipating the launch of the Xiaomi 17 Max in May. This device is expected to feature an 8,000 mAh battery and exceptionally fast charging capabilities. Further out, ambitious projects for the second half of 2026, including a modular optical smartphone, are on the agenda.

This core stability is crucial as the company pours resources into its automotive venture. To hit its stated goal of delivering 550,000 electric vehicles in 2026—a significant jump from the approximately 412,000 units delivered in 2025—Xiaomi cannot rely on a single successful model. The company's auto unit consequently plans to launch four to six new vehicles spanning a broad price range. A key personnel move underscores this push: the appointment of former Tesla manager Kong Yanshuang as the new head of sales, signaling an intent to secure its expansion in China's fiercely competitive EV market with seasoned expertise.

New EV Model Shows Promise Amid Shifting Demand

The company's electric vehicle division is reporting a strong start for its refreshed SU7 model, timed with its global "Fan Festival." Initial deliveries began just four days after the official unveiling on March 19th, a rapid pace necessitated by high early demand.

Yet, this promising launch is juxtaposed against clear signs of saturation for the previous flagship model, the YU7. The division's key metrics for March paint a bifurcated picture:

• SU7 Momentum: The new sedan secured over 40,000 firm orders, with 7,000 units already delivered to customers within the first nine days of shipments.
• March Deliveries: Total vehicle deliveries across all models surpassed 20,000 units for the month.
• YU7 Slowdown: Waiting times for the older model have plummeted dramatically, falling from a previous range of 33-56 weeks down to just 7-14 weeks.

This sharp contraction in YU7 demand highlights the critical imperative for Xiaomi: it must sustain the initial surge of the SU7 to fully offset the volume now retreating from its predecessor. The company's automotive success currently hinges on maintaining this delicate balance.