Xiaomi’s new electric sport utility vehicle (SUV), the YU7, has received exceptionally strong initial orders, sparking concerns for Elon Musk and his company, Tesla. In its first 18 hours after launch, Xiaomi took 240,000 pre-orders, with buyers paying hefty deposits for ready-to-deliver cars or smaller deposits for those yet to be made.
The YU7’s aggressive pricing, undercutting Tesla’s Model Y by nearly 4%, has analysts predicting further market share loss for Tesla. Priced at 253,500 yuan ($35,360), the YU7 offers more range and features than its Tesla counterpart.
Chinese consumers are snapping up the new SUV in droves, with sales rivaling those of Tesla’s Model 3 in China since December. Xiaomi’s shares surged to a record high on Friday before paring gains, marking a significant milestone for the company.
Tesla faces a daunting task in competing with the newcomer. Analysts suggest that the company may need to cut prices further, offer its “Full Self-Driving” software for free, or provide more financing incentives to combat Xiaomi’s growing market share.
With Tesla accounting for nearly 20% of its revenue from China, this is a concerning development for Elon Musk and his team. As the Chinese EV market continues to shift in favor of domestic rivals like Xiaomi, it remains to be seen how Tesla will respond to this challenge.
Source: https://nypost.com/2025/06/27/business/chinese-customers-snapping-up-xiaomis-suv-in-bad-sign-for-elon-musk