BEIJING, May 29 (Reuters) - Xiaomi ( XIACF ) rolled out

its new sports utility vehicle in Beijing on Thursday, as the

firm best known for smartphones and consumer electronics gears

up to further challenge Tesla in the world's largest

auto market.

Xiaomi ( XIACF ) launched the YU7 at 13 of its Beijing showrooms and

will start taking orders for the vehicle in July. It is keen to

repeat the success of the sporty SU7 sedan, which launched last

year and has outsold Tesla's Model 3 on a monthly basis since

December.

Analysts have said the YU7 could pose a major threat to

Tesla's best-selling Model Y but its launch comes at a time when

Xiaomi ( XIACF ), a relative newcomer to China's highly-competitive EV

market, has seen new EV orders fall after a series of

controversies.

Chinese authorities have been investigating a fatal highway

crash at the end of March involving an SU7 in driving-assistance

mode and Xiaomi ( XIACF ) has apologised for "not clear enough" marketing

after customer complaints of false advertising.

Liu Jiaxing, a 34-year-old tech worker, was among the first

visitors to Xiaomi's ( XIACF ) flagship showroom in Beijing Oriental Plaza

on Thursday morning, eager to catch a glimpse of the emerald

green YU7.

Liu said he was fond of the styling and colour as well as

the fact that Xiaomi ( XIACF ) vehicles connect with the firm's personal

gadgets and smart home products, which he felt pointed to how

local brands understood Chinese consumers better than their

foreign counterparts.

"I used to be more prone to U.S., German and French car

marques, but the fast progress of China's EV sector prompts me

to focus more on the products rather than brands," he said.

Another visitor was Tom van Dillen, managing partner at

German management consultancy Greenkern in Beijing, who said he

was not a fan of some of the YU7's intelligent features, which

he described as "unnecessary", but said the YU7 was a formidable

challenger to the Model Y.

He cited a "physical ecosystem advantage in the showroom

where there is a dedicated area with accessories that only fit

into Xiaomi ( XIACF ) cars" and their competitive price.

Xiaomi ( XIACF ) has said that it will only announce the YU7's pricing

in July.

HSBC Qianhai estimated in a note last week that the new SUV

will be priced between 230,000 yuan and 330,000 yuan

($31,989-$45,898) and that Xiaomi ( XIACF ) could ship 100,000 YU7 units

this year and 249,000 units in 2026.

The Model Y is priced from 263,500 yuan in China.

($1 = 7.1899 Chinese yuan renminbi)