The SUV That’s Cheaper Than A Tesla Model Y That Everyone Is Going Crazy For

If you can’t be first to something, be a fast follower. The Nissan Leaf was the first mass-produced electric car for sale in the United States, but it’s fast-follower Tesla that’s worth all the money. The Model Y has been around for a while, and many companies have tried to copy it with mixed success, but it might finally have a true competitor, at least in China.

That’s right, The Morning Dump is going to talk about the YU7 from Chinese smartphone maker Xiaomi. The company has already proven it can build a car with the extremely popular SU7. Now it’s showing it can design an SUV that’s competitive with the Model Y at an even more competitive price. Just don’t ship too many at once! That’s the advice from an expert on shipping following the sinking of another car carrier.

This comes as Elon Musk’s breakup with the Trump Administration means it’s unlikely he’ll have any sway to help save the tax credit. You know who might? Car dealers. Specifically, Carvana and Carmax are trying to get the Senate to kill the killing of the EV tax credit. One automaker that’s probably a little less impacted by the change is Toyota, which is currently kicking butt thanks to hybrids.

The Xiaomi YU7 Will Cost Just $35,300, Compared To $36,760 For A Model Y

Let’s assume that, tariffs aside, the politics of Elon Musk and his connection to President Trump are currently meaningless to Chinese consumers. That means that the issues they’ll judge a car on are the usual ones: Design, cost, performance, prestige, et cetera. Unlike Europe or the United States, it gives us a much clearer view of how well Tesla’s products will perform. So far, sales are down this year in China, both due to a factory switchover and some new competition.

There are cars like the Geely Star Wish, which Tesla simply has no car to compete with, and homegrown hybrids and EREVs from BYD that, again, show where Tesla lacks a fighter. The one place where Tesla has long ruled is in the mid-sized crossover space, thanks to its wildly popular Model Y. While there are a lot of cars roughly in that bracket, including the BYD Sealion 7, there’s nothing that’s quite had the verve of a Model Y.

That’s changing this week, as four different Model Y competitors launch almost simultaneously. While many of these are interesting, the one that I care about is the YU7.

As you’ll remember, Chinese smartphone company Xiaomi made waves with the SU7, a sporty sedan in the mold of a Model S that captured the imagination (and wallets) of the country. Even Ford CEO Jim Farley was kind of obsessed with his. But Chinese consumers, like all consumers, enjoy an SUV, and the reveal of the YU7 showed that Xiaomi may have an answer for the Model Y.

Now it looks like the company is going for the jugular, per Nikkei Asia:

Xiaomi’s Hong Kong-listed shares opened 8% higher at an all-time intraday high of 61.45 Hong Kong dollars before investors pared back some of the gains. It closed up 3.6%, achieving a record closing price of HK$58.95. The company’s shares are up more than 70% this year, giving it a market capitalization of HK$1.53 trillion ($194.9 billion).

On Thursday evening, Xiaomi Chairman and CEO Lei Jun announced that the new SUV, called the YU7, will start at 253,500 yuan ($35,300). That is lower than the 263,500 yuan price tag for Tesla’s popular SUV, the Model Y.

Within the first hour, Xiaomi received 289,000 pre-orders for the YU7, according to a social media post by the company. It later said 240,000 orders were confirmed.

CMB International, a Chinese brokerage, said in a report on Friday that the starting price was “largely in line” with what market watchers anticipated, but that the scale of the pre-orders “exceeded expectations.”

Why people like the YU7 is that it looks great, comes loaded with technology, is from a local Chinese automaker, and seems to just be fresher than even the refreshed Model Y. It’ll also have a longer driving range and more space.

Car Shipping Disasters Have Cost $1.8 Billion

There have been three massive car shipping disasters in as many years and, while we can’t quite say the most recent one was precisely due to the shipping of electric cars, that does seem to be a constant in all these major fires.

Earlier this month, the Morning Midas was carrying a load of cars from China to Mexico, including hundreds of electric cars, when something started a fire. The ship eventually sank and, while thankfully no lives were lost, the total cost of the accident is going to be about $560 million. WHy does this keep happening?

Automotive News spoke to a marine risk consultant who said what we’re all sort of thinking:

When it comes to shipping EVs, there’s always the risk of fire, explosion or thermal runaway, Capt. Randall Lund, senior marine risk consultant at Allianz Commercial, told Automotive News. Even if an EV is not the cause of a fire, it increases the chance of a fire turning disastrous. And if a fire starts, there’s not much that the ship’s crew can do.

“They are not professional firefighters,” Lund said.

While all crews receive basic firefighting training, it’s very broad, and EV fires generally require firefighting expertise, Lund said. Most crews aren’t even aware where EVs are stored on the vessel.

[…]

The industry needs to work with automakers to help them “understand that maybe they can’t ship 400 EVs at one time,” or that “cargo ships require additional spacing,” Lund said.

This seems like a fixable problem.

Carmax And Carvana Want To Keep The EV Tax Credit

There have been a lot of automakers pleading to keep the tax credit, arguing that the companies were incentivized to build electric cars by previous generations and that not doing so will risk competitiveness with China. Now, some major dealer groups are becoming involved, again from Automotive News:

Carmax, Carvana and other auto retailers are urging the Senate to preserve electric vehicle incentives in the budget bill, arguing that abruptly axing the tax credits would threaten dealerships that have invested in EV sales and service.

Automakers have required many dealerships to make large investments in EV infrastructure, including on-site chargers and service bay equipment.

“Dealerships like ours have invested billions of dollars as small businesses to serve our communities, to improve EV education, and offer exceptional service,” dealers said in the June 26 letter. “We need a stable and consistent market for our dealerships to plan, invest, and grow.”

The dealers said tax credits for new and used clean vehicles, the Advanced Manufacturing Production Tax Credit meant to incentivize battery production, the Alternative Fuel Vehicle Refueling Property Credit and others “must continue, even in a reduced form, for at least the next several years.”

The retailers are also opposed to a new fee for registering EVs meant to counter the fact that they don’t contribute to road building via the gas tax

Toyota Hits Another Record, Because Hybrids

I promise an update is coming on our cross-country trip, which was a surprising success. I just got home late last night and traveled home from the airport in a Toyota Highlander. Was it a hybrid? Of course, it was a hybrid. They’re all hybrids now, basically.

That’s helping propel Toyota to even bigger sales.

Per Bloomberg:

Toyota Motor Corp.’s sales reached a third straight monthly record in May on strong demand for hybrid vehicles in the US, Japan and China, even as global automakers braced for big losses triggered by President Donald Trump’s tariffs on imported cars.

Toyota’s global sales — including subsidiaries Daihatsu Motor Co. and Hino Motors Ltd. — reached 955,532 vehicles last month, up 8% from a year earlier, the company said Friday. Worldwide production came in at 906,984 units.

Toyota and its Lexus brand vehicle sales rose more than 4% in Japan, 7% in China and 11% in North America.

The world’s biggest carmaker will raise the prices next month of some vehicles it sells in the US by more than $200, as part of a regular revision based on factors that include market conditions and competition, a spokesperson said last week.

I’m thinking people will pay the extra $200.

What I’m Listening To While Writing TMD

It feels like I was on that trip for 10 months, so it’s nice to be “Home Again” as Michael Kiwanuka points out above.

The Big Question

What’s the best example of a car (or any product, really) that came out second, but absolutely killed it?