Xiaomi has rolled out ultra-long-term, low-interest financing for its YU7 electric SUV in China, following a similar move by Tesla as competition intensifies in the country’s crowded EV market.
Xiaomi founder and chief executive Lei Jun announced during a livestream on Thursday that the company is offering a seven-year financing plan across all YU7 variants. The incentive applies to orders placed between Jan. 16 and Feb. 28 and allows buyers to make a minimum down payment of 49,900 yuan ($7,160), with monthly instalments starting from 2,593 yuan.
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Lei described the offer as a rapid response to recent changes in the competitive landscape, after Tesla introduced extended financing terms earlier this month. Xiaomi launched the YU7 on June 26, 2025, marking its first entry into the electric SUV segment and positioning the model as a direct rival to Tesla’s Model Y.
The YU7 is priced from 253,500 yuan, undercutting the Model Y’s starting price of 263,500 yuan in China. Despite the lower list price, Xiaomi faces stiff competition from Tesla and other domestic brands as demand growth moderates and manufacturers turn to incentives to sustain volumes.
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On Jan. 6, Tesla announced ultra-low-interest financing of up to seven years for Chinese customers purchasing the Model 3, Model Y or Model Y L by the end of January. Tesla said the offer could save consumers up to 33,479 yuan compared with its standard annualised interest rate of 2.5%, making it the first automaker in China to introduce financing terms of that length.
Under Tesla’s programme, buyers can purchase a Model 3 or five-seat Model Y with a down payment of 79,900 yuan, resulting in monthly payments starting at 1,918 yuan and 2,263 yuan respectively. The six-seat Model Y L requires a minimum down payment of 99,900 yuan, with monthly payments starting at 2,947 yuan.
See also: Everything You Should Know About Updated Xiaomi SU7 Specifications
Tesla’s aggressive financing push comes after strong sales momentum. Model Y retail deliveries in China reached a record 65,874 units in December, lifting full-year 2025 sales to 425,337 vehicles.
The parallel incentives from Xiaomi and Tesla underscore how leading EV makers are increasingly using financing terms, rather than headline price cuts alone, to compete for buyers in China’s largest and most contested vehicle segments.
Source: CnEVPost
