CEO Lei Jun said this week that the Speed Ultra 7 (SU7) will be priced under 500,000 yuan (2 million 235 thousand TL).
This move will allow the tech giant to take on rivals like Tesla and BYD.
Xiaomi's entry into the electric car market came as sales growth slowed globally, triggering a price war.
The firm hopes the operating system shared with the SU7's phones, laptops and other devices will attract existing customers.
Xiaomi is the third-largest smartphone vendor worldwide, with a market share of about 12 percent, according to research firm Counterpoint.
The SU7, which Xiaomi has been promoting since last year, has been compared to Porsche's Taycan and Panamera sports car models.
Xiaomi said it will invest 10 billion dollars in the vehicle business over the next 10 years.
