China’s electric vehicle market saw a major shift in January, as Xiaomi’s newest electric SUV overtook Tesla’s Model Y to become the country’s best-selling vehicle.
The development marks a key moment for Xiaomi, which entered the auto industry only recently after establishing itself as a leading smartphone maker.
Sales data released by the China Passenger Car Association and Autohome showed Xiaomi’s rapid rise came even as overall electric vehicle demand slowed.
Tesla, which has long dominated China’s premium electric segment, experienced a sharp fall in rankings, underscoring growing pressure from domestic competitors in the world’s largest automotive market.
Xiaomi YU7 leads China auto rankings
Xiaomi’s YU7 SUV sold 37,869 units in January, securing the top position among all vehicles in China.
Tesla’s Model Y sold 16,845 units during the same period, placing it far behind Xiaomi’s offering.
The figures, published late Thursday by online car sales platform Autohome using China Passenger Car Association data, include both electric and gasoline-powered vehicles.
Tesla’s Model Y, which had ranked first in December, dropped sharply to 20th place overall in January.
Among new energy vehicles, which include battery electric and hybrid models, Tesla’s Model Y also declined significantly, falling from first position in December to seventh place in January.
Xiaomi began selling the YU7 SUV in the summer of 2025. The vehicle is Xiaomi’s second electric model and was launched roughly six months before the latest sales figures were released.
Tesla loses ground as domestic rivals advance
Tesla’s Model Y had maintained strong momentum in China’s electric vehicle market for much of 2025.
Analysts had expected Xiaomi’s YU7 to capture some market share, but Tesla remained among the top sellers throughout the year.
In December, Tesla’s Model Y was China’s best-selling vehicle, ahead of BYD’s Qin Plus, while Xiaomi’s YU7 ranked third.
Monthly rankings have fluctuated. Xiaomi’s SUV also outsold Tesla’s Model Y in October, though it did not take the overall top position at that time.
For full-year 2025 sales excluding gasoline vehicles, Tesla ranked fifth in China, while Xiaomi placed tenth.
BYD led the market with more than 3 million vehicles sold, followed by Geely with 2.6 million units, according to China Passenger Car Association data.
Pricing advantage and performance claims support demand
Xiaomi introduced the YU7 at a starting price 10,000 yuan, or about $1,450, below Tesla’s Model Y in China, making it more competitive among buyers.
The company also said the YU7 exceeded Tesla’s Model Y on key performance measures, including driving range on a single battery charge.
The strong January performance came despite slower growth in China’s electric vehicle market in recent months, indicating continued demand for Xiaomi’s newer model.
Xiaomi’s earlier SU7 sedan has faced scrutiny after fatal accidents linked to driver-assist features and electrically powered door handles.
Beijing has since banned hidden door handles, and carmakers have begun installing external lights to show when driver-assist systems are active.
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