Xiaomi Launches Flagship Car and New Smartphone on the Same Day, Lei Jun Warns Memory Prices Will Continue to Rise

Facing the reality that the global core business of smartphones is under pressure due to soaring chip costs, Chinese tech giant Xiaomi is increasing its investment in the automotive sector.

On Thursday, at a new car launch event held in Beijing, CEO Lei Jun officially unveiled the high-performance version of their popular sports utility vehicle (SUV) - the YU7 GT.

Key Specifications and Pricing: Focusing on Racing-Level Performance and Cost-Effectiveness

According to Lei Jun's disclosure at the event, the YU7 GT's performance and pricing are highly aggressive:

• Power and Range. The YU7 GT boasts up to 1000 horsepower, with a range of up to 705 kilometers (approximately 438 miles) on a full charge.

• Price Advantage. The starting price of the YU7 GT is 389,900 RMB (approximately $57,310). For comparison, the high-performance SUV Porsche Cayenne Turbo Electric starts at a staggering 1.12 million RMB in China. Additionally, the GT version is also 140,000 RMB cheaper than Xiaomi's first electric sedan's track version (SU7 Ultra).

Lei Jun stated that Xiaomi's vision is to create a purebred performance machine that not only possesses racing performance and styling but also luxury and excellent range, capable of meeting the long-distance travel needs of the whole family. It is reported that after being modified for track conditions, the model set a new record for SUVs at the Nürburgring circuit in Germany.

Countering the SU7 Ultra Waterloo: Launching a New Entry-Level Model to Directly Compete with Model Y

The YU7 GT is Xiaomi's second attempt in the high-performance sports car segment, and the company is clearly pinning its hopes on it for a better market response than the SU7 Ultra. The previous SU7 Ultra suffered a significant blow to sales due to consumer lawsuits against Xiaomi for alleged exaggerated marketing - in March of this year, the performance electric vehicle's sales were only 80 units, a cliff-like drop from over 3100 units in the same period last year.

To capture market share in the fiercely competitive Chinese electric car market, Lei Jun also introduced a brand-new entry-level model for the YU7 at the event, with the starting price reduced to 233,500 RMB. This is a full 20,000 RMB lower than the previous base version. Lei Jun bluntly stated that this price adjustment is specifically to compete more directly with Tesla's Model Y to contend for the throne of "China's Best-Selling SUV".

Smartphone Business Hit Hard by Shortage of Memory Chips, Lei Jun Says Memory Prices Will Continue to Rise

One of the core reasons Xiaomi is accelerating its transition to the automotive business is to hedge the serious challenges faced by its main smartphone business.

Amid a new round of memory chip shortages globally, Xiaomi has become the biggest victim among top-tier mobile phone manufacturers. Upstream suppliers, including Samsung Electronics, are focusing all their efforts on producing high-end memory chips for AI data centers, leading to a severe shortage of conventional memory products and skyrocketing procurement costs.

Market data tracking agency IDC's figures show that, due to Xiaomi's strategic reduction in shipments of low-end smartphones with extremely low profit margins that are unable to absorb the rising costs, Xiaomi's global smartphone shipments dropped nearly 20% in the first quarter compared to the same period last year, while the global market's decline was only 2.9%.

At this event, Xiaomi also released the large-screen flagship smartphone Xiaomi 17 Max, with a price starting from 4299 RMB after national subsidies,,featuring an 8000mAh super-capacity Jinsha River battery and a 200MP Leica main camera as the core selling points. Lei Jun stated,he expects memory prices to continue to rise in the next two years, and therefore strongly recommends replacing your phone now if you have plans to do so within the next two years.

In an interview following the Xiaomi YU7 GT launch event, Lei Jun also stated that over the past five years