• Xiaomi's YU7 SUV received nearly 300,000 orders in its first hour, undercutting Tesla's Model Y by 4%.
• The YU7 boasts a longer driving range and advanced features compared to the Model Y, intensifying competition.
• Xiaomi's stock surged by over 70% this year amid strong EV sales, positioning it as a serious rival to Tesla.

Xiaomi has launched its YU7 electric sport utility vehicle (SUV), which received an astonishing 289,000 orders within the first hour, significantly exceeding expectations. The YU7 is priced at 253,500 yuan (approximately $35,322), positioning it nearly 4% cheaper than Tesla's Model Y. Xiaomi CEO Lei Jun expressed confidence in challenging Tesla's dominance, asserting, "We have set an unreasonable goal of beating the Model Y," during the launch event. The YU7 showcases impressive specifications, including a driving range of 835 kilometers, far surpassing the Model Y's 593 kilometers on a single charge, according to SCMP and Reuters.

The initial response from consumers indicates a robust demand for the YU7, with reports confirming over 200,000 pre-orders in just three minutes after bookings opened. Analysts predict that Xiaomi will continue to gain traction in the EV market, potentially siphoning consumers away from Tesla, which has seen its market share decrease from a peak of 15% in 2020 to just 7.6% early in 2025, as noted by Channel News Asia and Business Insider.

Xiaomi's YU7 features advanced technology such as a preliminary self-driving system and a high-performance battery, raising questions about Tesla's competitive edge. With nearly three times the orders of the SU7 electric sedan launched previously, the YU7 disrupts the traditional sales model for EVs in China, according to SCMP and Business Insider.

The competitive landscape indicates that Xiaomi could emerge as a major player, particularly in a market where price wars have intensified among domestic EV manufacturers. Analysts from Jefferies pointed out that the YU7's specifications significantly outperform those of Tesla’s Model Y, suggesting that ongoing innovations and pricing strategies may deepen the competition further. In light of these developments, Tesla may need to rethink pricing and incentives to maintain its market position, as pressures mount from well-established Chinese competitors like BYD, according to Reuters, Channel News Asia, and SCMP.