Tesla has dominated the market since the launch of its SUV (Model Y) in 2020. These were the most demanding cars until 25 June. But the game flipped here; on 26 June 2025, Xiamo took over the rule. The company launched its first SUV, Xiamo YU7, and sales went through the roof. The company closed 289,000 sales in its first hour of release, CEO Lei Jan said.
Tesla’s SUV (Model Y) held the title of the best-selling car in the world in 2023. However, due to Xiaomi’s latest model, Tesla saw a drop of about 7.9%, according to reports. In addition, Tesla’s pricing has made it seem even more of a strange buy. Xiaomi targeted this point smartly and launched the YU7 in a price range of 253,500 yuan ($35,360), with technical features and better performance, as reported by a Jefferies analyst. Its sales exceeded those of SU7, also a model released by Xiaomi in March last year.
Xiaomi is not just providing us with an SUV, but it is also making an EV more affordable for average buyers. Middle-class buyers were struggling before, but now they’re excited. Why pay more when you can get the same at a lower price?. Tesla has not officially commented on this yet. The company is no longer the leader in EVs; there’s a competitor now. If Tesla does not counter Xiaomi with a bold move, such as an attractive price cut or a next-level feature, it risks losing not just sales but also the emotional connection it has built with consumers.
Exceptionally strong initial orders for Xiaomi’s YU7 electric sport utility vehicle sent shares in the automotive newcomer to a record high on Friday and fanned speculation that Tesla may have to cut prices to fight back. The company received 289,000 orders for the YU7 – only its second vehicle and one that undercuts Tesla’s Model Y in price by nearly 4% – in its first hour on sale, according to CEO Lei Jun.