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Xiaomi (XIACY) just dropped its boldest moves yet. At its 15th anniversary showcase, CEO Lei Jun introduced the YU7a five-meter electric SUV that could outrun Tesla (NASDAQ:TSLA) Model Y in a 0100 sprint, and possibly go 760km on a single charge. That wasn't all. He also pulled back the curtain on the Xring O1, Xiaomi's first self-developed 3nm chip, aimed at competing with Apple (NASDAQ:AAPL) and Qualcomm (NASDAQ:QCOM) in premium mobile processing. Together, they mark a turning point for the company once known for budget phones and rice cookers.
But this splashy product reveal came with baggage. Just weeks ago, Xiaomi was under fire after a fatal crash involving its SU7 sedan sparked doubts about its self-driving system. Orders plunged. Trust wavered. Many wondered if its $10 billion EV dream was at risk. Lei didn't dodge itin fact, he leaned in. "Yes, we have flaws," he said, promising a five-year surge in achievements. The YU7 won't launch until July, and there's still no pricing or pre-order date. But make no mistake: this is Lei's moonshothis final startup mission, and a direct shot at Tesla and BYD (BYDDF)
What's different this time? It's not just about hardware. Xiaomi is now positioning itself as a full-stack tech contender. Beyond the $28 billion pledged for R&D over five years, the company also confirmed a $7 billion decade-long investment in chip development. It even introduced MiMo, its own large language modelXiaomi's answer to the AI arms race. If successful, this shift could mark a breakout moment for the company's long-running pivot from low-cost electronics to strategic tech dominance. Investors are watching closely. Because if Xiaomi delivers on even part of this vision, the next five years might not just be redemptionthey might be reinvention.
This article first appeared on GuruFocus.