Xiaomi (小米) absorbs most of the cost jump on new SU7 — material bill up ~20,000 yuan, price raised only 4,000

Pricing and cost trade-offs

Xiaomi (小米) founder and CEO Lei Jun (雷军) said the new-generation SU7 carries more than 100 upgrades versus the first-generation model, and that its material cost has risen by “almost 20,000 yuan.” Yet Xiaomi raised the SU7’s retail price by only 4,000 yuan across the range. Why the small increase? Lei said the company did not want buyers to feel the new model would push them over budget after changes to the vehicle purchase tax policy, it has been reported.

Lei framed the decision as customer-first. Absorbing most of the material-cost rise cushions early adopters and keeps the new SU7 competitively priced in a crowded Chinese EV market. But it also squeezes margins, a deliberate bet on volume and brand trust as Xiaomi scales its auto business.

Orders, deliveries and wider context

On deliveries, Lei reportedly emphasized the need to balance orders with the company’s ability to deliver. “Last year’s YU7 made people wait more than a year and we were heavily criticized,” he said, arguing that more reasonable order volumes and wait times improve the overall purchase experience. It has been reported that Xiaomi’s official account said the new SU7 locked over 15,000 orders within 34 minutes of launch.

For Western readers: Xiaomi began as a smartphone maker and has rapidly expanded into electric vehicles, pitching data-rich hardware and aggressive pricing against incumbents and startups. The company’s decision comes amid broader supply-chain cost pressures and geopolitical headwinds — from export controls on advanced chips to fluctuating battery-material prices — which have pushed many automakers to reassess pricing, inventories and delivery timetables. Whether Xiaomi can sustain margin compression while meeting delivery expectations will be a key industry watchpoint.