China’s electric vehicle (EV) market is entering 2026 with financing incentives emerging as the latest battleground. Just days after Tesla introduced a low interest rate offer for its best-selling models, Xiaomi has rolled out a matching seven-year financing offer for its YU7 electric SUV.
The move was confirmed this week by Xiaomi founder, chairman, and CEO Lei Jun, who announced during a livestream that all variants of the YU7 will qualify for the financing offer. Under Xiaomi’s new program, customers who order a YU7 between January 16 and February 28 can put down as little as RMB 49,900 (about $7,160).
Monthly payments start at ¥2,593 (C$516/US$372), making the YU7 one of the most aggressively financed electric SUVs currently available in China. Xiaomi is also offering a shorter 3-year 0% interest plan, which increases monthly payments to ¥4,961 (C$989/US$712).
The YU7 itself starts at ¥253,500, undercutting the base price of Tesla’s Model Y, which begins at ¥263,500.
Xiaomi officially launched the YU7 in mid-2025, its first entry into the electric SUV segment and its most direct challenge yet to Tesla’s Model Y. On launch day the electric SUV racked up 20,000 orders, and since then demand has remained high with 2025 deliveries totaling 153,673 vehicles and an order backlog reaching beyond a year. (via CnEVPost).
Despite that growth, Xiaomi is clearly responding to Tesla’s offers in China. Last week Tesla announced low interest financing for up to seven years on purchases of the Model 3, Model Y, and the six-seat Model Y L, available to customers who place orders by January 31, making Tesla the first automaker in China to introduce financing terms this long.
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