Is Xiaomi Set to Dethrone Tesla in China?

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Taking a look at the very best promoting electrical vehicles in China throughout the primary 11 months of 2024, the Tesla Mannequin Y was the highest promoting full electrical automobile, and the Tesla Mannequin 3 was the eighth finest promoting pure electrical automobile. BYD has dominated plugin automobile gross sales and pure electrical automobile gross sales in China, but it surely has roughly 1,000,000 fashions. Tesla has simply two in China, and because the second most desired — or at the very least most purchased — EV model within the nation, the fashions do exceptionally nicely there. Nonetheless, the market is probably the most aggressive, sees probably the most innovation, and is altering probably the most quickly of any main auto markets on the earth.

The most popular new model on the EV market in China is Xiaomi, the second largest smartphone producer on the earth. I’ve written about its wonderful EV rise a handful of occasions, so for those who missed these, simply go forward and catch up right here:

The most recent information on Xiaomi is that its sedan, its first and at the moment solely mannequin, the SU7, is now outselling the Tesla Mannequin 3 there. Right here’s a chart from CnEVPost on this:

The model is extraordinarily robust in China, and its EV arrival has been past spectacular. It’s the most important launch I keep in mind for the reason that Tesla Mannequin 3 or Mannequin Y.

Xiaomi EV vice chairman Li Xiaoshuang just lately shared on social media that the SU7 was doing higher than the Mannequin 3 in China already.

Whereas by itself that is an fascinating achievement and noteworthy for the corporate, it might say one thing extra essential about what’s to return.

As famous above, the Mannequin 3 is the eighth finest promoting pure electrical automobile in China, whereas the Mannequin Y is #1. Xiaomi’s subsequent mannequin is the YU7, a crossover. In different phrases, the Mannequin Y competitor is on the best way. It’s anticipated to reach in June or July of this yr. As soon as the Xiaomi is right here and manufacturing ramps up, will it surpass the Tesla Mannequin Y identical to the SU7 has surpassed the Mannequin 3? And if it does so, does that imply it should grow to be the very best promoting pure EV within the nation? (Or will BYD maybe take the spot again?)

Additionally, except for bragging rights and sports-like gross sales rankings, the larger implication could also be what the YU7 does to Tesla Mannequin Y client demand. Will it steal a substantial variety of clients from Tesla? Tesla depends on the gross sales of simply two fashions. If one mannequin begins doing worse, it doesn’t have an enormous lineup of different fashions that would fill within the gaps (like BYD does). And the Chinese language market is totally essential for Tesla. Might Xiaomi and its YU7 and SU7 do actual harm to Tesla in China? We’ll have to attend to see, but it surely’s a risk I’m actually maintaining a tally of.

Tesla’s resolution for now could be the model new refresh of the Mannequin Y. Maybe that can maintain of the canines for some time. Maybe it should enable the Mannequin Y to retain its #1 place in 2025. We will see.