Xiaomi has received record orders for its new SUV. It's a direct competitor to the Tesla

Xiaomi's new YU7 electric SUV, which the company unveiled only the day before, has already collected nearly 250,000 confirmed orders. This has increased pressure on Tesla, for which China is the most important market and its share there continues to decline, and caused speculation that Ilon Musk's company will have to cut prices - the car from Xiaomi is cheaper than the Model Y. 

Chinese electronics and car manufacturer Xiaomi has received an exceptionally high volume of orders for the new electric SUV YU7, which it unveiled the day before, reports Reuters. In the first 18 hours after the launch, the car was ordered 240,000 times, and we're talking about confirmed orders: buyers bailed out. In just three minutes after the launch, the company received over 200 thousand inquiries.

Xiaomi is a relatively new player in the electric car market. This is only its second car, and there are already three times as many orders as there were when the first model, the SU7 electric sedan, launched last March, was launched, the company said.

Pricing for the YU7 starts at 253,500 yuan ($35,322), which is 10,000 yuan cheaper than the Tesla Model Y, the best-selling SUV in China. At that price, Xiaomi's car offers much better features and performance, Jefferies analysts noted, their quotedTipRanks.

Even before the launch of the YU7, Citi predicted that monthly sales of this electric car would be around 30,000 units and annual deliveries would be 300,000-360,000, CNBC recalls.

According to analysts, the release of a new Chinese SUV may entail a further loss of market share on the part of Tesla, which is gradually ceding its position in the PRC to local manufacturers with their spectacular models. The SU7 from Xiaomi, for example, has overtaken the Tesla Model 3 in sales in China every month since December, Reuters notes.

Ilon Musk's share of the Chinese electric car market, which brings it a fifth of its revenue, has fallen from a peak of 15% in 2020 to 10% in 2024, and in the first five months of this year has already dropped to 7.6%, the agency writes. Deliveries of Model 3 and Model Y cars made in China, which include both domestic sales and exports, were up 15% year over year in May, data from the local passenger car association, published in early June showed.  

Tesla may now have to cut prices further, install its autonomous driving software for free to assist drivers (Full Self-Driving, FSD, and offer additional financial incentives if it wants to successfully compete with Xiaomi, Citi analysts said.

Xiaomi shares soared 8% in early trading on June 27, hitting an all-time high, but then pulled back to remain up 3%. Since the beginning of the year, the company's value has jumped more than 70% to nearly $200 billion, making Xiaomi the best-performing large cap stock in the Asia-Pacific region, agrees LSEG data cited by Reuters.

Tesla shares were up 0.5% at the premarket on June 27. They have lost nearly 20% this year. 

This article was AI-translated and verified by a human editor