Xiaomi has launched a seven-year low-interest financing plan for its YU7 electric SUV, mirroring a recent offer from Tesla amid fierce competition in China's EV market. The incentive, announced by CEO Lei Jun, applies to all YU7 variants and targets orders placed between January 16 and February 28. This move comes as both companies vie for dominance in the popular SUV segment.
Xiaomi, the Chinese tech giant, is intensifying its rivalry with Tesla by offering ultra-long-term financing for its YU7 model, a direct competitor to the Model Y. On January 15, 2026, founder, chairman, and CEO Lei Jun announced during a livestream that customers can finance any YU7 variant over seven years at low interest rates. This responds to Tesla's similar initiative unveiled on January 6, 2026, which marked the first such extended plan in China.
For Xiaomi's offer, Chinese buyers ordering the YU7 from January 16 to February 28 can make a down payment as low as RMB 49,900 ($7,160), with monthly installments starting at RMB 2,593. The YU7, Xiaomi's first electric SUV, launched on June 26, 2025, and starts at RMB 253,500 ($35,390)—undercutting the Model Y's base price of RMB 263,500. In December 2025, the YU7 achieved record deliveries of 39,089 units, contributing to a full-year total of 153,673 units, according to CnEVPost data.
Tesla's financing allows purchases of the Model 3, five-seat Model Y, or six-seat Model Y L by January 31, with down payments of RMB 79,900 for the Model 3 or five-seat Model Y (monthly payments from RMB 1,918 and RMB 2,263, respectively) and RMB 99,900 for the Model Y L (RMB 2,947 monthly). Compared to the standard 2.50% annualized rate, Tesla buyers can save up to RMB 33,479. The Model Y saw strong performance in December 2025 with 65,874 retail sales in China, pushing its annual total to 425,337 units.
This escalation highlights the cutthroat competition in China's EV sector, where domestic brands like Xiaomi are challenging Tesla's stronghold through aggressive pricing and incentives. ($1 = RMB 6.9672)
