Will Chinese electric vehicles ever make it to the U.S.?

Xiaomi Corporation (OTCPK:XIACF) (OTCPK:XIACY) is expected to make a significant impact on the electric vehicle market this week with the unveiling of its YU7 electric SUV. Scheduled for a formal debut on May 22, the YU7 is already generating substantial buzz as a direct competitor to the Tesla (TSLA) Model Y in the high-volume electric SUV segment in China and potentially beyond.

The YU7 is larger than the Model Y, measuring just under 5 meters in length, nearly 2 meters in width, and with a 3-meter wheelbase. Under the hood, the YU7 can be configured with either a single or dual-motor setup, delivering a combined output of up to 508 kW (691 hp) and a top speed of 253 km/h (157 mph). The vehicle will be powered by CATL-supplied lithium-ion ternary batteries, with two capacity options: 96.3 kWh and 101.7 kWh, which translates to a range of 670 km to 820 km.

While final pricing details are expected to be revealed at a launch event, early reports suggest a competitive price bracket of $35,000 to $40,000,

The YU7’s launch coincides with Xiaomi’s (OTCPK:XIACF) (OTCPK:XIACY) 15th anniversary and underscores the company’s broader ambitions in integrated technology.

Notably, Xiaomi’s (OTCPK:XIACF) (OTCPK:XIACY) first sedan, the SU7, has outsold the Tesla (TSLA) Model 3 in China since late 2024.

On Wall Street, Morgan Stanley thinks the YU7 launch is another indication that China may have already won the EV battle. In an interesting take, analyst Adam Jonas thinks China EVs will eventually come to the shores of the U.S.

“Add Xiaomi to the list of capable China auto/tech firms that may represent attractive collaboration candidates as Western legacy auto firms look for ways to achieve higher re-shoring scale, improved capital discipline and lower execution risks. We are not aware of any auto CEO who believes tariffs will be successful in keeping Chinese EV technology fully out of the US market.”