A surge in early demand for Xiaomi’s (1810.HK) new YU7 electric SUV sent the company’s shares to a record high on Friday, intensifying pressure on Tesla (TSLA) to respond with pricing and feature changes.
Within just 18 hours of the YU7 going on sale, Xiaomi reported receiving approximately 240,000 locked-in orders. These included both large deposits for vehicles ready for delivery and smaller deposits for upcoming builds.
The launch marks another milestone for Xiaomi, which made waves in China’s EV market with the debut of its SU7 sedan in March 2023. That model has consistently outsold Tesla’s Model 3 in China on a monthly basis since December and even earned high praise from Ford CEO Jim Farley.
The YU7, Xiaomi’s second model, starts at 253,500 yuan ($35,360), undercutting Tesla’s Model Y by nearly 4%. Analysts believe this price advantage will further chip away at Tesla’s market share in China.
At a Xiaomi dealership in Beijing, dozens of customers crowded around the YU7. “We could take turns to drive the Model Y and YU7,” said Otto Shi, a 26-year-old Tesla owner who works in finance and is considering buying a YU7 for his father, who currently drives a Mercedes-Benz. He added that Xiaomi’s strong supply chain capabilities and the SU7’s success convinced him the company is the right Chinese brand to switch to.
Xiaomi shares surged as much as 8% during early trading Friday, hitting an all-time high before closing up 3.6%. The stock has soared over 70% this year, giving the company a market valuation of roughly $190 billion, making it the best-performing large-cap stock in Asia Pacific, according to LSEG data.
Tesla’s market share in China has slipped significantly—from 15% in 2020 to 10% last year, and down to just 7.6% in the first five months of 2025—as domestic competitors continue to attract buyers with advanced features and competitive pricing.
Citi analysts wrote in a note that Tesla may need to cut prices again, offer its “Full Self-Driving” (FSD) software for free, and introduce more financing incentives to stay competitive with Xiaomi.
Tesla, which recorded China as its largest market in Q1, did not respond to a request for comment. In 2024, China made up about one-fifth of Tesla’s revenue.
While Xiaomi CEO Lei Jun acknowledged Tesla’s superior driver assistance technology, he emphasized features where the YU7 leads. The base model includes a 96.3 kWh battery with a driving range of up to 835 km (519 miles) and fast-charging capabilities—compared to Tesla’s redesigned Model Y, which offers up to 719 km using a smaller 78.4 kWh battery.
He also pointed out additional perks: “Its backseats have drawers for storage under them and the YU7’s driver assistance software comes at no extra charge while Tesla charges 64,000 yuan for its smart driving software,” he said.
Xiaomi announced Thursday night that the YU7 received 289,000 orders within the first hour of sales—more than triple the number logged by the SU7 during its debut.
However, Lei noted that scalpers likely contributed to that volume. On the Chinese resale platform Xianyu, hundreds of users were seen trying to sell their spot in the YU7 order queue.
To deter scalping, Xiaomi has now limited buyers to two cars per customer.
Pump Radar
Stock Alerts
