Over the past few years, the Tesla Model Y has dominated the global market as the best-selling electric vehicle.
However, it now faces a powerful new rival in China, its most important market: the Xiaomi YU7 electric sedan, which has surged onto the scene and is setting a trend that directly threatens Elon Musk and his company’s leadership.
A shift that signals a new era
In recent weeks, sales of the Model Y have dropped significantly, while the YU7 has maintained steady growth with more than 3,000 weekly deliveries.
This contrast highlights a shift in Chinese consumer preferences, with many now viewing Xiaomi’s vehicle as a competitive alternative in terms of price, design, and performance.
According to data published by ThinkerCar, a comparison between the two models underscores the magnitude of the market shift.
Retail sales figures in China, covering weeks 23 through 34 of 2025, show the YU7 climbing rapidly while the Model Y loses ground.
Xiaomi has officially launched the YU7 SUV in China
It starts at 253,500 yuan ($35,320 USD)
Xiaomi secured 200,000 pre-orders, breaking all previous records for a car launch in China
Xiaomi’s strategy: taking on Tesla head-on
This phenomenon is no coincidence. From its launch, Xiaomi made it clear that the YU7 was designed to compete directly with the Model Y.
The company compared technical specifications, range, and pricing, successfully positioning its sedan as an option as appealing—or even more so—than Tesla’s.
Lei Jun, Xiaomi’s CEO, warned that demand could pose a problem for buyers, with orders already exceeding 200,000 units and wait times stretching beyond a year.
In a rare move for the industry, he even advised potential customers to consider other brands due to the heavy backlog of reservations.
The rise of the Xiaomi YU7 not only challenges Tesla but could also redefine the balance of power in the electric vehicle market.
With China standing as the world’s largest consumer of EVs, it is becoming the stage for the industry’s next major battle.
