Published 02 July 2025, 3:46 PM BST Share on Facebook — Luca Greco (@lucagrecoita) April 29, 2025 The YU7, only the company's second offering, enters the market starting at 253,500 yuan (£26014.35). This pricing positions it almost 4% below Tesla's Model Y, a move analysts believe will likely lead to further market share erosion for the American carmaker. At a Xiaomi car showroom in Beijing, the YU7 drew a crowd of dozens. Among them was Otto Shi, a 26-year-old finance professional and current Tesla Model Y owner, who mentioned that he was considering getting a YU7 for his father, who currently drives a Mercedes-Benz. 'We could take turns to drive the Model Y and YU7,' he remarked, noting his admiration for Xiaomi's supply chain expertise. He added that the SU7's success convinced him that Xiaomi is the perfect Chinese brand to choose next. Xiaomi's shares initially surged by 8% in early trading, reaching an unprecedented peak, though they later stabilised to close up 3.6%. Their value has climbed by over 70% throughout this year, pushing the company's valuation to approximately $190 billion (£139.78 billion) and making it the top-performing large-cap stock in the Asia Pacific region, according to LSEG data. How Can Tesla Regain Ground? As local competitors increasingly captivate Chinese buyers with innovative features, Tesla's presence in the Chinese electric vehicle market has notably diminished, shrinking from a high of 15% in 2020 to 10% last year and further to 7.6% during the initial five months of 2025, according to The Post. According to a client note from Citi analysts, Tesla may need to implement additional price reductions, offer its 'Full Self-Driving' (FSD) driver assistance software at no charge, and introduce more attractive financing options to rival Xiaomi effectively. Tesla, which counts China as its largest market based on first-quarter sales figures, has yet to issue a statement. Last year, the Chinese market accounted for approximately one-fifth of the company's total revenue. A Feature-Packed Rival While Xiaomi CEO Lei Jun heaped praise on Tesla's driving assistance software, he highlighted numerous other features where he claimed the YU7 surpassed the Model Y. The YU7's entry-level variant boasts a 96.3 kWh battery, enabling an impressive driving range of up to 835 km (519 miles) on a single charge and supporting rapid, high-power fast charging capabilities. Everything you need, turned all the way up. Delivers up to 835 km (CLTC) on a 96.3 kWh battery, and recharge 465 km in just 15 minutes. #XiaomiYU7 is ready. #NewBeginnings pic.twitter.com/vIBqw2Ei5O