What can Tesla do? As domestic rivals increasingly win over Chinese consumers with snazzy new features, Tesla’s share of the Chinese EV market has fallen from a peak of 15% in 2020 to 10% last year and then again to 7.6% for the first five months of 2025. Citi analysts said in a note to clients that it may have to cut prices further, offer its “Full Self-Driving” (FSD) driver assistance software for free and offer more financing incentives if it is to compete successfully with Xiaomi. Tesla, which counts China as its biggest market according to first-quarter sales numbers, did not immediately respond to a request for comment. Last year, China accounted for roughly a fifth of its revenue. Analysts said Elon Musk’s Tesla may have to cut prices further, offer its “Full Self-Driving” (FSD) driver assistance software for free and offer more financing incentives if it is to compete successfully with Xiaomi. AFP via Getty Images While Xiaomi CEO Lei Jun acknowledged that Tesla’s driving assistance software was superior, he touted a range of other features where he said the YU7 outperformed the Model Y. The YU7’s base model is equipped with a 96.3 kWh battery pack, offering a driving range of up to 835 km (519 miles) on a single charge and supporting high-power fast charging. That compares with a maximum range of 719 km for the redesigned Tesla Model Y, which uses a smaller 78.4 kWh battery. The YU7’s base model is equipped with a 96.3 kWh battery pack, offering a driving range of up to 519 miles on a single charge and supporting high-power fast charging. ZUMAPRESS.com Its backseats have drawers for storage under them and the YU7’s driver assistance software comes at no extra charge while Tesla charges 64,000 yuan for its smart driving software, he added. On Thursday night, Xiaomi said it had received 289,000 orders for the YU7 in the first hour after it went on sale, more than three times the level for its SU7 when it launched. Lei has said, however, that a portion of orders was likely being placed by scalpers. On Chinese secondhand platform Xianyu, there were hundreds of people on Friday looking to sell their position in the order queue to others. Aiming to mitigate such scalping, Xiaomi is now limiting each customer to purchasing two cars at most. Filed under