Xiaomi, the first Chinese Tesla killer after its SU7 sedan outsold Model 3, is now aiming to unseat Model Y, China’s bestselling SUV, with its upgraded YU7 due to its low-cost advantage.

This followed the firm’s first-quarter net profit missing market estimates, as rising memory chip costs continued to drag its smartphone businesses, leaving its electric vehicles (EV) – Xiaomi’s second-largest revenue contributor – to keep growing.

Xiaomi’s shares dived to a 12-month low of HK$28.24 on Wednesday afternoon, before recovering slightly to finish 4.6 per cent lower for the day at HK$28.40. The stock has lost more than 29 per cent this year and stands roughly 54 per cent below its 52-week high.

The Beijing-based tech giant said on Tuesday that it had started deliveries for the standard edition of the Xiaomi YU7, priced from 233,500 yuan (US$34,400), 30,000 yuan lower than the refreshed rear-wheel-drive Tesla Model Y.

“In terms of configuration, driving range and technology, I think we have won (Model Y) across the board,” Lu Weibing, partner and president of Xiaomi, said at an earnings call on Tuesday evening. “Therefore, I also believe that the introduction of this standard version will give us a very significant advantage in competing against the Model Y.”

Notably, Xiaomi’s new SU7 recorded April sales of 26,826 units, dragging down Tesla’s Model Y to become the second bestselling model across all power trains, trailing only the Geely Xingyuan at 34,727 units, according to data from automotive content platform Dongchedi. In contrast, Model Y sales for April plunged 42 per cent month-on-month to 22,990 units.

For the first quarter, Xiaomi’s EV deliveries rose 6.6 per cent year-on-year to 80,856 units and the company maintained its full-year delivery target of 550,000 vehicles for 2026.